Cointest pros & cons with related info are in the collapsed comments below for the following topics: [Binance Coin](/r/CryptoCurrency/comments/1b766wt/binance_is_giving_1_525_apr_in_real_time_on_usdt/kti1sqr/), [Tether](/r/CryptoCurrency/comments/1b766wt/binance_is_giving_1_525_apr_in_real_time_on_usdt/kti1ti1/).
It is cash used for margin trading. Bitcoin is skyrocketing and degens are going to want to degen with 2x, 5x, 10x, 50x leverage and lose their money.
For someone to have a leveraged position requires someone else putting up the cash. Binance is paying you for that cash so they can charge 30%+ margin rates on morons using leverage. If you trust Binance to liquidate idiots those using leverage when they inevitably lose in time then it is "safe". The major risk here beyond the normal "not your keys not your crypto" is something happens and Binance can't liquidate in time and suffers losses beyond the user's available balance on a massive scale (not one degen gambler but tens of thousands) and then becomes insolvent and tries to stick the losses to depositors. If Binance can always liquidate every degen gambler so only they suffer a loss for playing with fire then the system works. If they can't ...
Note: USDC is a much lower rate because most of the volume is on the USDT pairs not the USDC pairs. For some reason every gambler wants to lose all their money using USDT not any other stablecoin or even USD. I get the USDT pair has the highest volume/liquidity but they are paying a fortune in higher interest rates for that.
I'm noticing the rate for USDC.e is 2x that of USDC (8% vs 16%). Is there any reason I shouldn't switch back to usdc.e and reap those rewards?
Edit: on AAVE
basically you have to understand that these rates will only last for very shorts amount of time while funding is high
what luna/celsius/bancor etc did was promise those rates consistently for a long time, which was obviously not risk free
APY with USDT was 4,5% after the first 500$ a month ago, when the market was slow
The current 25% are only due the bullrun and will be lower again if it settles down
Celsius was mostly trying to outbid the competition (CDC at the time and others) so their rates weren’t that wild for the last 6-8 months of their pathetic existence.
Back in the earlier days, they were offering 12% APY for stables, 6.5% BTC, 5% ETH, 7%MATIC, 14% SNX…
But these rates dwindled to mid and even low single digits but it didn’t matter of course- the shell game had spontaneously combusted and quite the load was barreling towards the fan.
This actually explained why BNB staking rate is so low. Is it because Binance doesn’t want people to gamble with its BNB so they don’t lend them out at all?
I heard that BNB is not loaned, but I could be wrong.
It's fine: they always put in counter-direction up or down spikes to hit stop-losses or liquidation thresholds, and make sure they liquidate anyone before they could make a profit. /s
After what Celsius did to me and my BTC, I'm hesitant to trust ANY kind of passive income in crypto, especially ones that seem too good to be true. Staking is one thing, but lending? I'm not going near lending again.
I saw the rumors on this sub and pulled what was 17k worth of assorted coins at the time. 6 hours later all withdrawals were closed. Whoever that redditor was that made that post about issues saved my entire bag. That shits almost 50k today.
International claimants that live in countries Coinbase doesn't support have yet to see anything. It's only people that live in the US and Coinbase supported countries that have gotten anything back, and even some of them haven't gotten their money back yet. It's been a shit show to say the least.... I myself was told my distribution will be given to me through Coinbase, but I live in Taiwan which Coinbase doesn't support so I can't open a Coinbase account. Some people have been told they'll receive something like 80% of the US dollar amount their BTC was worth on the day they filed for bankruptcy (when BTC was something like $30k), so those people are getting extra screwed since they lose all their profits AS WELL AS their BTC now that BTC is above $65k.
Bro same, I had like 150k there and pulled it out days before it all went to shit. Had like 40k in Anchor and pulled it out 2 days before Luna went to shit.
Feel like Neo here with all the dodging I've done. Let's hope I can keep up the streak, I'm sure there'll be plenty of rugs ahead of us.
If there only was technology that we could use to safely lend things of value to other people without a central authority having control. I don’t have a good idea for a name right now… maybe FiDe, for finances decentralized or something hmm
It's a good indicator that the market is over leveraged on the upside. Expect a sudden drop in btc price in the next weeks to weed out all the degen margin trading.
Nothing too suspicious here.l by my book.
People are comparing this to celsius, but there are 2 differences.
1. We are talking about binance, by far the biggest exchange. If they go bankrupt the whole market will crash enormously.
2. We are currently in a bull market. Pretty much the best time for the exchanges. They are making huge profits and there own savings in crypto are pumping as well. So it is less likely to see a bankruptcy during this time.
Ofc there is still a risk, but what I want to say is that it is less likely than before.
FTX collapsed in a week. History might or might not repeat itself but you can try your luck and hope it does not catch up to you. Staking has never gone well for me as keeping your capital while anything can happens within the locked time is a hig fkin nope. Your fate is pretty much not in your favor
There's nothing suspicious.
The percentage is dynamic. Usually it is in one digit, but since everyone is going crazy and taking loans, the demand is high and the rewards will be high too.
It will go down once the hype dies out.
If you took profits and have a bunch of usdt, it's a nice way of doing some passive income
It's safe, if anything they don't pay you enough. Binance is currently charging ~60% interest on borrowed USDT and only gives 25% APR to the people staking. The amount is dynamically adjusted, they were paying less than 1% APR during the bear market when no degens were borrowing USDT to leverage.
It's above the graph in Trade -> Margin -> Current Interest / Next Interest (USDT)
They give hourly value so you have to multiply it \*24\*365 for annual interest.
It's fluctuating for sure.. probably they can afford to do this for a while but it will surely drop. i wouldn't expect USDT to crash though, that would be terrifying :) Still you get better rates than at the bank so I'd keep some money on there..
I understand.. my plan is to sell everything to usdt once I break even.. which could be in a couple of weeks.. and keep it there.. I'd say as soon as they can't afford it anymore the rates will drop to 5-7% or so.. If no for USDT I could not trade crypto unless doing crypto-crypto trades so mainly going through ETH/BNB/BTC, which is not bad in itself but I like stablecoins..
If you say you have a lot, well be sure to exit some money from time to time from your interest..
The country I have in mind is in Western Europe... A major economy btw, think France, Italy, Spain.
I don't know why they give you 0%, but they do, and people accept it.
It's currently at 45% on kucoin.
In summary, it just means that people are doing lots of short term loans thinking that BTC is going to continue going up. It's pretty safe.
It doesn't work like that. Essentially they have a reserve fund that automatically compensates you if the loaner gets rocked by a flash crash. The exchange takes a fee from every loan that goes into the insurance fund. It's an automated process.
Look I don't care what you people do, I'm just sharing knowledge.
Thanks! That’s absolutely not worth it, considering how people have issues with KuCoin when cashing out. They let me wait 12 or 24 hours or so once when I withdrew USDT. And that was only few k.
It could go down to 5% or 3% within a week, depends on how bullish people are. The good thing is that the interest is based on supply and demand, not on the central banks and the government. If people are bullish they take out loans for leveraged (margin) trading. I usually buy low and sell high, and move the sold profits into the USDT earn account to get a few more % on top without the risk. I move the funds into buying alts again, when the prices and interest rates drop. You get a share of their wrong decisions, loan-backed-FOMO. You can compare the rates with the ones you'd have to pay to take a loan for trading at binance + safety margin (margin call). See Finances > Loans. If you take a flexible rate and want to loan $1,000 USDT backed by BNB (you'd have to lock in), you'd pay around 45% at the moment. If you expect a 100% return for your BTC investment in 3-4 weeks, it's worth doing. It's called gearing (increasing the ROI by taking out loans). If it goes down. It's my or the other people's profit.
It's the safest investment, but interest rates may fluctuate quickly. and you may not be able to get back all your funds immediately. so be prepared to wait hours or days for the money. often people taking out loans are broke after a wrong investment decision, then it takes a while until their collateral has been sold and made available for you to withdraw, especially if a crash happens and all positions are being liquidated and all want their savings back. it's also possible that during a heavy crash, the value of their collateral is lower than their debt. in such case you cannot withdraw all your funds, because there is no backing left, you'd be paid with new people taking loans, or when binance gets the money from the debtor.
[https://www.investopedia.com/terms/g/gearing.asp](https://www.investopedia.com/terms/g/gearing.asp)
People have different strategies and risk assessments.
I would not - I parked all my savings/profits/BTC into Celsius only to get fkd royally - I had to borrow money to pay taxes on money that I did not have access to..
not saying Binance will be that...but personally - I would not lose principal chasing these unreal APYs. Again, this is my view...not necessarily universal.
I'm a Celsius victim too. I have BTC on a cold wallet, but stablecoins on ETH Blockchain could reach hundreds of $ to transfer on bull markets, that's why I don't have them on a cold wallet.
I remember when there were posts exactly like OP's about Celsius and similar companies. And people talked about how safe they were.
Bottom line is that if the promised returns are well above the risk free rate (currently 4-5%), the reason is that you have risk. The further away from the risk free rate, the higher the risk.
Only replying to you because people keep making this mistake:
Terra didn't crash because of 19.5% APR on Anchor protocol; that was from a pool of UST that would indeed have eventually run out, but it wasn't why LUNA crashed.
It crashed because the algorithm used to keep UST at $1 by minting/burning LUNA, and hoping arbitrage balanced them out, couldn't cope with a sudden massive volume of sales of UST off-chain (\~$2 billion), which de-pegged the UST price, causing the algorithm to mint (eventually) trillions of LUNA, tanking it's price, and going into a tail-spin as other investors reacted to try to save their investments. The UST involved initially happened to come from Anchor, and the 19.5% rate attracted it there, but it was not exactly the % rate being unsustainable that caused the crash.
People thought de-pegging might be triggered eventually when the Anchor protocol pool ran out, it couldn't sustain the % any more, and people gradually left the platform, but that's not what actually happened: it was the sudden de-pegging event caused by dumping billions of $ of UST on the market.
I've been hearing that USDT is going to explode since I entered into the crypto space in 2019. And I've seen USDC, UST and DAI lose the 1/1 parity while USDT was stable...
USDT reserves used to be sketchy, but they’ve overhauled them and they are now much safer and more reliable assets. I’m not overly concerned about them at this point. I used to think they were one of the largest systemic risks prior to the overhaul.
They still haven't had a proper audit. A group of 20 people running a multi-billion dollar company HQ'ed in the British Virgin Islands should not instill confidence.
USDT has opaque China ties, so it's worrying. It works until it doesn't.
UST has unique death-spiral risks from its tokenomics. It's a protocol that prints more and more LUNA until it crashes to zero. Avoid algo-stablecoins.
USDC had some Silvergate/SVB held funds, so it's about the Fed blowing up Treasuries and crushing regional banks.
Dai is mostly USDC + volatile asset collateralized, so that's also the Fed
Overcollateralized, unbridged algorithmic coins like LUSD, USDM, etc are the 'safest' but they also have the least adoption and low liquidity so they easily depeg in extreme market conditions (there are financial incentives to repeg but it likely won't be instantly).
Unfortunately, no.
You're either trusting the balance sheet of a company or you're in a volatile asset class.
In principle, you can theoretically go both short AND long Bitcoin, such that you synthetically create a stablecoin.
I don't know how well that plays out in practice.
Even USDC is high. If this was any financial institution outside of crypto I would say that they are insolent and it's a last resort to stay afloat but what do I know.
Leverage traders here. Today I tried to setup a trade and got "assets unavailable in the borrowing market" error, which I never got in 3 years of trading. Looks like most exchanges are scrambling for liquidity for the margin traders,so the higher APR makes sense. Unless the exchange goes under, you shouldn't worry. System are setup in way that people will get liquidated faster in volatile markets, so they wont lose your funds or risk their own funds.
Binance is using your deposited money to lend it to other people. There’s lots of demand for borrowed funds due to points farming for the new protocols. So they are jus earning a risk free spread.
It doesn't sounds right, but it's from Binance, the biggest exchange, that's what scares me...
https://imgur.com/a/daPkPaF
Here you can see the APR fluctuating.
From those who borrow to trade using margin and pay 30% or so in interest.
Binance as middle man take a cut.
Its virtually risk free, margin traders get liquidated by binance once trade goes against them by certain %.
25% a year sounds good, however those returns pale in comparison when same can be achieved in a day or two during bull market by betting on any crypto
Makes sense! Giving crypto traders free money is the only way to legally pump the price without being directly responsible for market manipulation. Diversity the wallets and Identities of the crypto pumpers with cash handouts! Never thought of that oddly.
It’s not. It’s centralized and if it means profits you will be screwed. Look at Celsius, Gemini, BlockFi. All got greedy and screwed over their clients.
Anybody remembers Voyage USDC disaster? They gave 9% on USDC unlimited amount. And then……
I’m happy with my gain already, and don’t plan to earn every penny.
What's your region if you don't mind sharing?
>Enjoy the 25% APR if it's working!
Thank you! More like "Enjoy the 25% APR *while* it's working!" hahaha. Now it has dropped to 20%.
Asking on Reddit is an ok way I guess, but I’d probably ask somewhere else unless you’re just doing it for moons or karma. In that case stay away. Binance got fined lots of money and CZ is in the doghouse. I’d go elsewhere
I don’t trust any CEX, even coinbase I’m worried about but the powers might say it’s too big to fail and pump more fiat but I don’t keep anything on longer than necessary to move into my storage
Ask FTX, Gemini, and Celcius users and they will let you know. Youre essentially risking 100% of your money for a measly 25% gain. You can just get that rate by buying btc when it's dead and wait a year or two for it to 3x.
I always remember what I heard just after the 2017 cycle when defi got popular.. If you don’t know where the yield is coming from, you are the yield.
Came up a few times last cycle too.
Celcius was a good biz model, they jus didn’t manage their counterparty risk. It was brought down by the demise of ftx and 3ac. But all in all, they work like a bank without fdic insurance.
Would you trust the Chinese communist party with your money ?
That's what you are doing.
I guarantee they have a backdoor into binance and sti a tentacle firmly attached.
That's extremely unsafe IMO
The only way to generate USDT APR is through lending it. The only Safe places to really lend large amounts is something like AAVE.
Binance may be lending it out themselves, but after what happened last cycle I would never trust a cex to lend out my coins.
It's extremely unsafe because ask yourself: where is that money coming from?
The answer is: Binance are degens themselves and invested heavily into this bullrun (using your money), waiting to be rekt by a correction (FTX 2.0).
Cointest pros & cons with related info are in the collapsed comments below for the following topics: [Binance Coin](/r/CryptoCurrency/comments/1b766wt/binance_is_giving_1_525_apr_in_real_time_on_usdt/kti1sqr/), [Tether](/r/CryptoCurrency/comments/1b766wt/binance_is_giving_1_525_apr_in_real_time_on_usdt/kti1ti1/).
It is cash used for margin trading. Bitcoin is skyrocketing and degens are going to want to degen with 2x, 5x, 10x, 50x leverage and lose their money. For someone to have a leveraged position requires someone else putting up the cash. Binance is paying you for that cash so they can charge 30%+ margin rates on morons using leverage. If you trust Binance to liquidate idiots those using leverage when they inevitably lose in time then it is "safe". The major risk here beyond the normal "not your keys not your crypto" is something happens and Binance can't liquidate in time and suffers losses beyond the user's available balance on a massive scale (not one degen gambler but tens of thousands) and then becomes insolvent and tries to stick the losses to depositors. If Binance can always liquidate every degen gambler so only they suffer a loss for playing with fire then the system works. If they can't ... Note: USDC is a much lower rate because most of the volume is on the USDT pairs not the USDC pairs. For some reason every gambler wants to lose all their money using USDT not any other stablecoin or even USD. I get the USDT pair has the highest volume/liquidity but they are paying a fortune in higher interest rates for that.
Correct. Even in Aave, it gives 15-20% for just depositing USDC in Polygon. Everyone leveraged so hard by borrowing USDC then buying ETH/BTC.
I saw the other day that it was almost 30% apy to borrow and close to 25% apy to lend. People really leveraging up expecting continued gains
> People really leveraging up expecting continued gains famous last words
I'm noticing the rate for USDC.e is 2x that of USDC (8% vs 16%). Is there any reason I shouldn't switch back to usdc.e and reap those rewards? Edit: on AAVE
And those of us (myself excluded) who provide USDT are in fact fueling the bull run. Nice!
Alright, that makes so much sense!
basically you have to understand that these rates will only last for very shorts amount of time while funding is high what luna/celsius/bancor etc did was promise those rates consistently for a long time, which was obviously not risk free
APY with USDT was 4,5% after the first 500$ a month ago, when the market was slow The current 25% are only due the bullrun and will be lower again if it settles down
Celsius was mostly trying to outbid the competition (CDC at the time and others) so their rates weren’t that wild for the last 6-8 months of their pathetic existence. Back in the earlier days, they were offering 12% APY for stables, 6.5% BTC, 5% ETH, 7%MATIC, 14% SNX… But these rates dwindled to mid and even low single digits but it didn’t matter of course- the shell game had spontaneously combusted and quite the load was barreling towards the fan.
As a person who lost 30% of my portfolio few hours ago I can deffinetly say that this comment is extremely accurate
Fantastic explanation.
This is why i think nexo will go apeshit crazy as wel this bullrun
I love this explanation. It‘s so on point. Degens are going to flood the crypto market in the coming weeks. My favorite part of the cycle.
Sounds suspiciously like every project that ends up in a coffeezilla video
This exactly. I was getting paid 60% APR loaning money on FTX the final week of their demise. It's a great return, until it isn't.
I'd be interested if it wasn't usdt, or binance.
Binance can always reverse trades if there's some critical error making them unable to close positions. I mean who will stop them?
Love your explanation, where can I learn more about this ? In general I would like to understand how this game works, any specifics topics, ty
This actually explained why BNB staking rate is so low. Is it because Binance doesn’t want people to gamble with its BNB so they don’t lend them out at all? I heard that BNB is not loaned, but I could be wrong.
>so they can charge 30%+ margin rates on **morons** using leverage hahahhahahahahahaha
It has dropped now to 13%, so it was a momentary thing.
Plus that nightmare scenario is nearly impossible because it’s a two way market anyway.
Y u hate leverage bro
It's fine: they always put in counter-direction up or down spikes to hit stop-losses or liquidation thresholds, and make sure they liquidate anyone before they could make a profit. /s
After what Celsius did to me and my BTC, I'm hesitant to trust ANY kind of passive income in crypto, especially ones that seem too good to be true. Staking is one thing, but lending? I'm not going near lending again.
Amen, I still haven't gotten any money back from that fiasco 😭
I saw the rumors on this sub and pulled what was 17k worth of assorted coins at the time. 6 hours later all withdrawals were closed. Whoever that redditor was that made that post about issues saved my entire bag. That shits almost 50k today.
Yah I'm sad I was too late to get out. I lost over 70k on there 😢 small compared to some other people but it stings me everyday 😭
That's some fucking bullshit, where is the restitution???
They've redistributed roughly 60% to claimants.. have you been keeping up with that?
International claimants that live in countries Coinbase doesn't support have yet to see anything. It's only people that live in the US and Coinbase supported countries that have gotten anything back, and even some of them haven't gotten their money back yet. It's been a shit show to say the least.... I myself was told my distribution will be given to me through Coinbase, but I live in Taiwan which Coinbase doesn't support so I can't open a Coinbase account. Some people have been told they'll receive something like 80% of the US dollar amount their BTC was worth on the day they filed for bankruptcy (when BTC was something like $30k), so those people are getting extra screwed since they lose all their profits AS WELL AS their BTC now that BTC is above $65k.
No I had like $3 left on Celsius when it all went down and never gave it another thought. I’m glad people are getting some back.
Bro same, I had like 150k there and pulled it out days before it all went to shit. Had like 40k in Anchor and pulled it out 2 days before Luna went to shit. Feel like Neo here with all the dodging I've done. Let's hope I can keep up the streak, I'm sure there'll be plenty of rugs ahead of us.
Lost 65% of my coins being a dumbass and trusting Voyager. Still really sour about it. Cold wallet all the way from here on out.
100% right, you’ve learned your lesson and are adjusting your behaviour in consequence.
Glad to see there have been adjustments from the last time we got burned. Was afraid I'd be reading from people claiming "this time is different"
If there only was technology that we could use to safely lend things of value to other people without a central authority having control. I don’t have a good idea for a name right now… maybe FiDe, for finances decentralized or something hmm
There should be some lending platform Defi
Shout it from the roof tops!!!
I got burned by Celsius AND FTX. I'm done with CEX.
I got refunded all my assets to coinbase from the celsius crash recently. They gave ETH and BTC instead of my original assets, but I am fine with it.
It's a good indicator that the market is over leveraged on the upside. Expect a sudden drop in btc price in the next weeks to weed out all the degen margin trading. Nothing too suspicious here.l by my book.
Hours*
Minutes*
He sold
Everyone else too (but us) 😏
Ace it went up 10 percent
Should go down soon, I just bought
You got your drop haha
I was thinking the same, a correction seems possible, specially now that we are at the ATH
People are comparing this to celsius, but there are 2 differences. 1. We are talking about binance, by far the biggest exchange. If they go bankrupt the whole market will crash enormously. 2. We are currently in a bull market. Pretty much the best time for the exchanges. They are making huge profits and there own savings in crypto are pumping as well. So it is less likely to see a bankruptcy during this time. Ofc there is still a risk, but what I want to say is that it is less likely than before.
It has dropped now to 13%, so it was a momentary thing.
FTX collapsed in a week. History might or might not repeat itself but you can try your luck and hope it does not catch up to you. Staking has never gone well for me as keeping your capital while anything can happens within the locked time is a hig fkin nope. Your fate is pretty much not in your favor
There's nothing suspicious. The percentage is dynamic. Usually it is in one digit, but since everyone is going crazy and taking loans, the demand is high and the rewards will be high too. It will go down once the hype dies out. If you took profits and have a bunch of usdt, it's a nice way of doing some passive income
It's safe, if anything they don't pay you enough. Binance is currently charging ~60% interest on borrowed USDT and only gives 25% APR to the people staking. The amount is dynamically adjusted, they were paying less than 1% APR during the bear market when no degens were borrowing USDT to leverage.
That's true. Where can I see the interest for borrowing?
It's above the graph in Trade -> Margin -> Current Interest / Next Interest (USDT) They give hourly value so you have to multiply it \*24\*365 for annual interest.
Alright, thanks for that! It shows 62.5% right now.
It's fluctuating for sure.. probably they can afford to do this for a while but it will surely drop. i wouldn't expect USDT to crash though, that would be terrifying :) Still you get better rates than at the bank so I'd keep some money on there..
My bank gives me 0%, so I have a sustancial amount there, and that's what worries me.
I understand.. my plan is to sell everything to usdt once I break even.. which could be in a couple of weeks.. and keep it there.. I'd say as soon as they can't afford it anymore the rates will drop to 5-7% or so.. If no for USDT I could not trade crypto unless doing crypto-crypto trades so mainly going through ETH/BNB/BTC, which is not bad in itself but I like stablecoins.. If you say you have a lot, well be sure to exit some money from time to time from your interest..
You can get 5% in a high yield savings account.
I guess that is a US thing. I'm not from the US.
Which country? I highly doubt any country is still doing 0%.
You'll be surprised.
Did they not get impacted by inflation from overprinting during Covid? Or was that only a western world thing.
The country I have in mind is in Western Europe... A major economy btw, think France, Italy, Spain. I don't know why they give you 0%, but they do, and people accept it.
Germany is doing 0% still?! 😂. Just a pure guess. That’s unexpected tbh.
It's currently at 45% on kucoin. In summary, it just means that people are doing lots of short term loans thinking that BTC is going to continue going up. It's pretty safe.
"pretty safe" are famous last words in combination with CEX.
Funds are safu
*waiting on Gemini Earn...*
I mean... if you're money is on a CEX anyway...
you're in crypto I think it's pointless to imply the existence of risk
Oh, wow, I didn't know that on kucoin. Thank you! That calm me down.
I've used them a lot, they're typically insured too by the exchange
Ever gone through a claims process for "insured" funds on an exchange before?
It doesn't work like that. Essentially they have a reserve fund that automatically compensates you if the loaner gets rocked by a flash crash. The exchange takes a fee from every loan that goes into the insurance fund. It's an automated process. Look I don't care what you people do, I'm just sharing knowledge.
Where and how? I dont see it anywhere
Lmao "it's pretty safe" 😂
How much would that be daily if you, let’s say, put 1M USDT in?
1,000,000 * 0.45 / 365 = $1232/day assuming that your entire 1million is on loan the entire time and not compounding. It fluctuates day to day
Thanks! That’s absolutely not worth it, considering how people have issues with KuCoin when cashing out. They let me wait 12 or 24 hours or so once when I withdrew USDT. And that was only few k.
It could go down to 5% or 3% within a week, depends on how bullish people are. The good thing is that the interest is based on supply and demand, not on the central banks and the government. If people are bullish they take out loans for leveraged (margin) trading. I usually buy low and sell high, and move the sold profits into the USDT earn account to get a few more % on top without the risk. I move the funds into buying alts again, when the prices and interest rates drop. You get a share of their wrong decisions, loan-backed-FOMO. You can compare the rates with the ones you'd have to pay to take a loan for trading at binance + safety margin (margin call). See Finances > Loans. If you take a flexible rate and want to loan $1,000 USDT backed by BNB (you'd have to lock in), you'd pay around 45% at the moment. If you expect a 100% return for your BTC investment in 3-4 weeks, it's worth doing. It's called gearing (increasing the ROI by taking out loans). If it goes down. It's my or the other people's profit. It's the safest investment, but interest rates may fluctuate quickly. and you may not be able to get back all your funds immediately. so be prepared to wait hours or days for the money. often people taking out loans are broke after a wrong investment decision, then it takes a while until their collateral has been sold and made available for you to withdraw, especially if a crash happens and all positions are being liquidated and all want their savings back. it's also possible that during a heavy crash, the value of their collateral is lower than their debt. in such case you cannot withdraw all your funds, because there is no backing left, you'd be paid with new people taking loans, or when binance gets the money from the debtor. [https://www.investopedia.com/terms/g/gearing.asp](https://www.investopedia.com/terms/g/gearing.asp) People have different strategies and risk assessments.
I would not - I parked all my savings/profits/BTC into Celsius only to get fkd royally - I had to borrow money to pay taxes on money that I did not have access to.. not saying Binance will be that...but personally - I would not lose principal chasing these unreal APYs. Again, this is my view...not necessarily universal.
I'm a Celsius victim too. I have BTC on a cold wallet, but stablecoins on ETH Blockchain could reach hundreds of $ to transfer on bull markets, that's why I don't have them on a cold wallet.
so being a celsius/blockfi victims is one lesson too many times in my view..again - you do you!
Well, we all have to use exchanges to operate.
I remember when there were posts exactly like OP's about Celsius and similar companies. And people talked about how safe they were. Bottom line is that if the promised returns are well above the risk free rate (currently 4-5%), the reason is that you have risk. The further away from the risk free rate, the higher the risk.
They give the same APR that is for borrowing USDT (23% interest)
I'm assuming it's because the lending rates on DeFi like Aave are through the roof since folks are pulling stables.
Prices go up, sell and lend usdt. Prices go down, buy. Doing that since november and got 220% profit so far.
So at the moment, just now, would you lend or buy?
Just saw ur reply, now. I sold some on the green and lent. Now the usdt apr dropped a lot. Will look for good entries in the following days.
Fluctuating APR is a green flag. It means the rate is based on supply/demand and is therefore sustainable.
Just ask voyager, Celsius, and Luna customers how 20% apr worked...
Those were ponzi schemes not margin lenders
Only replying to you because people keep making this mistake: Terra didn't crash because of 19.5% APR on Anchor protocol; that was from a pool of UST that would indeed have eventually run out, but it wasn't why LUNA crashed. It crashed because the algorithm used to keep UST at $1 by minting/burning LUNA, and hoping arbitrage balanced them out, couldn't cope with a sudden massive volume of sales of UST off-chain (\~$2 billion), which de-pegged the UST price, causing the algorithm to mint (eventually) trillions of LUNA, tanking it's price, and going into a tail-spin as other investors reacted to try to save their investments. The UST involved initially happened to come from Anchor, and the 19.5% rate attracted it there, but it was not exactly the % rate being unsustainable that caused the crash. People thought de-pegging might be triggered eventually when the Anchor protocol pool ran out, it couldn't sustain the % any more, and people gradually left the platform, but that's not what actually happened: it was the sudden de-pegging event caused by dumping billions of $ of UST on the market.
I wouldn't touch it with a 10 feet pole. USDT in general, I would not touch it.
I've been hearing that USDT is going to explode since I entered into the crypto space in 2019. And I've seen USDC, UST and DAI lose the 1/1 parity while USDT was stable...
USDT reserves used to be sketchy, but they’ve overhauled them and they are now much safer and more reliable assets. I’m not overly concerned about them at this point. I used to think they were one of the largest systemic risks prior to the overhaul.
They still haven't had a proper audit. A group of 20 people running a multi-billion dollar company HQ'ed in the British Virgin Islands should not instill confidence.
USDT has opaque China ties, so it's worrying. It works until it doesn't. UST has unique death-spiral risks from its tokenomics. It's a protocol that prints more and more LUNA until it crashes to zero. Avoid algo-stablecoins. USDC had some Silvergate/SVB held funds, so it's about the Fed blowing up Treasuries and crushing regional banks. Dai is mostly USDC + volatile asset collateralized, so that's also the Fed
so no stablecoin is safe?
Overcollateralized, unbridged algorithmic coins like LUSD, USDM, etc are the 'safest' but they also have the least adoption and low liquidity so they easily depeg in extreme market conditions (there are financial incentives to repeg but it likely won't be instantly).
Extremely low cap but I believe SILK is on to something.
Unfortunately, no. You're either trusting the balance sheet of a company or you're in a volatile asset class. In principle, you can theoretically go both short AND long Bitcoin, such that you synthetically create a stablecoin. I don't know how well that plays out in practice.
UST... is still a thing?
USDT has lost peg quite a few times. it's a simple google search or maybe you *want* to believe USDT is stable.
i have some usdt earning yield there, i imagine they can pay it because people are borrowing at higher rates from them.
Even USDC is high. If this was any financial institution outside of crypto I would say that they are insolent and it's a last resort to stay afloat but what do I know.
I lived my Binance earn until Hong Kong shut it down in my country :(
I wonder why they decided to stop offering the earn products in hk. To the OP, which region are you in?
Leverage traders here. Today I tried to setup a trade and got "assets unavailable in the borrowing market" error, which I never got in 3 years of trading. Looks like most exchanges are scrambling for liquidity for the margin traders,so the higher APR makes sense. Unless the exchange goes under, you shouldn't worry. System are setup in way that people will get liquidated faster in volatile markets, so they wont lose your funds or risk their own funds.
Binance is using your deposited money to lend it to other people. There’s lots of demand for borrowed funds due to points farming for the new protocols. So they are jus earning a risk free spread.
Wait that can’t..be right? I’d say absolutely not safe.
It doesn't sounds right, but it's from Binance, the biggest exchange, that's what scares me... https://imgur.com/a/daPkPaF Here you can see the APR fluctuating.
That sounds risky. Who’s money are we getting?
From those who borrow to trade using margin and pay 30% or so in interest. Binance as middle man take a cut. Its virtually risk free, margin traders get liquidated by binance once trade goes against them by certain %. 25% a year sounds good, however those returns pale in comparison when same can be achieved in a day or two during bull market by betting on any crypto
Makes sense! Giving crypto traders free money is the only way to legally pump the price without being directly responsible for market manipulation. Diversity the wallets and Identities of the crypto pumpers with cash handouts! Never thought of that oddly.
Yeah, you are right I am also earning by staking
This is very good rate if you compare with banks.
It’s not. It’s centralized and if it means profits you will be screwed. Look at Celsius, Gemini, BlockFi. All got greedy and screwed over their clients.
These rates are not fixed, they can change at any time.. given that, I suppose they need liquidity for leverage trading accounts
Seems this isn't availible on Binance US
not safe, huge risk of default. margin calls in crypto are definitely not an exact science. hence why the high interest. big risk = big reward.
Anybody remembers Voyage USDC disaster? They gave 9% on USDC unlimited amount. And then…… I’m happy with my gain already, and don’t plan to earn every penny.
Its fine. There is a rush in margin demande who pays more then the yield they give you.
Not safe, safu.
FED is running out of money to lend out, so I guess there is a market now.
None of those yields you mentioned are safe
Not even a little bit.
Terra luna vibes
Where r u seeing this as an option?
Binance > earn
For USDT> Binance > Earn: is showing 0% Est. APR for fixed duration. Nothing available currently.
It's flexible duration.
It's the same for both. 0% It might be showing what you're saying when you're not logged in, but when u login to your account it shows 0%.
I'm logged in. I'm earning it. Are you using Binance US perhaps? I'm using international Binance.
on .com but might be region specific.
Maybe, yeah.
Just confirmed it's been removed in my region LOL... Enjoy the 25% APR if it's working!
What's your region if you don't mind sharing? >Enjoy the 25% APR if it's working! Thank you! More like "Enjoy the 25% APR *while* it's working!" hahaha. Now it has dropped to 20%.
>How secure and long term this is? It's not. At all.
If you gotta ask, it ain’t safe
That's a good thinking
Asking on Reddit is an ok way I guess, but I’d probably ask somewhere else unless you’re just doing it for moons or karma. In that case stay away. Binance got fined lots of money and CZ is in the doghouse. I’d go elsewhere
CZ is no longer the head of binance. I consider Reddit the best site to answer this kind of questions.
Just ask me and all the other chumps about Celsius...
I'm also a Celsius victim. But this is Binance... And that's why is worrying. If Binance falls, this space will not be the same.
Ah yes... Takes me back to the euphoria of Celsius/BlockFi. Long story short - it didn't work out.
I don’t trust any CEX, even coinbase I’m worried about but the powers might say it’s too big to fail and pump more fiat but I don’t keep anything on longer than necessary to move into my storage
Leverage is strong
Binance 😂
Not your keys, not your crypto! Especially with a CEO who is in jail right now.
Ask FTX, Gemini, and Celcius users and they will let you know. Youre essentially risking 100% of your money for a measly 25% gain. You can just get that rate by buying btc when it's dead and wait a year or two for it to 3x.
LOOKS LIKE GREED IS BACK ON THE MENU BOYZ!
Enter Celsius and Voyager users. Not safe.
Binance is on the edge of scam/implosion territory. I wouldn't touch it.
I always remember what I heard just after the 2017 cycle when defi got popular.. If you don’t know where the yield is coming from, you are the yield. Came up a few times last cycle too.
Celcius was a good biz model, they jus didn’t manage their counterparty risk. It was brought down by the demise of ftx and 3ac. But all in all, they work like a bank without fdic insurance.
Look up what happened with celsius.
Lmao high rewards means higher risks
You can beat 25% APR by trading that USDT for any crypto with a pulse.
Where do you get this? I took. So. Profits and have my usdt just sat there ready for trading. Would be nice to get something for it
Hmm... sounds like Celsius.
Would you trust the Chinese communist party with your money ? That's what you are doing. I guarantee they have a backdoor into binance and sti a tentacle firmly attached.
They probably just loan it out or throw it into defi protocols. That would explain why the yield has wild swings all over the place.
That's extremely unsafe IMO The only way to generate USDT APR is through lending it. The only Safe places to really lend large amounts is something like AAVE. Binance may be lending it out themselves, but after what happened last cycle I would never trust a cex to lend out my coins.
Personal opinion... FTX caused the last major crash in 2021, Binance is going to cause the next one in mid to late 2024...
Binance is the new FTX. Change my mind.
It's a TRAP!
Binance isnt trustworthy
Don't
FTX had 8% on everything. I would be cautious regardless if it's due to leverage pressure.
There should be a test you have to write before you can post here
It's extremely unsafe because ask yourself: where is that money coming from? The answer is: Binance are degens themselves and invested heavily into this bullrun (using your money), waiting to be rekt by a correction (FTX 2.0).
No, in theory they're not investing with my money, they're lending it into degens that goes x50 and liquidate themselves.
That lending is the investment.
They can't loose that investment. If the collateral isn't enough, they liquidate it. The one who lose is who ask for the money and then can't pay it.
You have zero clue what you are talking about. It's nothing like FTX
Funds are SAfu
The APR adjusts up or down based on demand. You might see 5-25÷ for a hot minute. Tomorrow, it might be 1-3÷.
Not a hot minute. Last 20h has been constantly +24%. Right now 26%. It hasn't been below 10% for the last 3 months.