Replying to Avatar Base Layer Capital

Not that I would do this yet, but very curious why #Bitcoin backed loans have absurdly high APRs.

It hardly makes it seem like pristine collateral from this perspective. Being so easy to liquidate I'd think 1-2% would be more appropriate. Not 11-16%. Who would ever take that deal? Long term capital gains in the USA is only 15%...

Is it perhaps because banks have been kept out so far? Will it change with regulations allowing bank to custody and offer lending services?

Thought?
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mbarulli 1y ago

You are absolutely right.

I believe that competition among liquidity providers will gradually bring interest rates down. Bitcoin is the perfect collateral and it will be acknowledged soon.

Disclaimer: I work for Firefish.io, a marketplace for Bitcoin-backed loans. 😉

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Base Layer Capital 1y ago

Very cool! I'd love to chat you up about Bitxoin financing someday.

The future in this space is bright.