No. of Recommendations: 4
I am trying to say, indirectly, that the rates are high for even worse reasons than risky loans. What if you can create new currencies that engage in circular finance? How do you prop that up? To Levine's point, this is all based on trust. Do you trust the entities controlling these pools of liquidity? What happens when money flow out of these these systems.
I mean, I certainly don't. I doubt any regular TMF folks would, either.
I agree about the "worse reasons." Many of the institutions like Celsius that Levine wrote about back in 2022 didn't just fail; their officers ended up in jail for fraud. Sometimes it's just risk loans, and sometimes they were able to offer super-normal rates because they're essentially Ponzi schemes.
