Reaching for Yield \ stacker news ~bitcoin

958 sats \ 19 comments \ @grayruby 10 Jun 2023 bitcoin

It seems odd to me that ETH stakers are putting up 32ETH (approx $56k) to receive a 4,1% yield (Lido APR). 4.1% doesn't seem like much considering in most jurisdictions you have to pay taxes on that income (like a dividend) and considering the technical, custodial (in most cases), regulatory and let's be honest founder/foundation risk. Granted a big risk has been mitigated now that they can unstake but there is still a queue, so if shit hits the fan good luck getting out in time. Seems to me they are more trying to perpetuate a supply squeeze than actually doing it for the yield, but what do I know.

Anyways, that got me thinking about how much yield I would need to get on my Bitcoin to consider undertaking such risks. I couldn't come up with a sensible number, so I gave up and placed it in the too hard pile but I am curious what other bitcoiners think. What yield would you need to get to lend some of your bitcoin through a centralized custodian?

<5%4.9%

5%-10%4.9%

10%-15%7.3%

15%-20%2.4%

20-25%4.9%

>25%17.1%

Fuck that, I am Mr Freeze58.5%

41 votes \ poll ended

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253 sats \ 5 replies \ @FrickFrickFrick 10 Jun 2023

The security of knowing what the value of Bitcoin will do roughly every 4 years makes risking Bitcoin for yield pointless. I don't even think it is possible to have yield on Bitcoin without it being a scam. Like where does the yielded returns come from? And why do they offer the yield product in the first place?

I will do a small Bitcoin backed loan if the conditions are right. That makes a little more sense to me especially if its a situation where I would need to spend Bitcoin anyways.

243 sats \ 4 replies \ @numbskull 10 Jun 2023

Hey Frick I sent you 100 sats by mistake, can you return 99 sats back please

123 sats \ 1 reply \ @FrickFrickFrick 10 Jun 2023

I sent 222 in error can you return the difference thanks

10 sats \ 0 replies \ @numbskull 10 Jun 2023

I’ll try, my math is not that good

0 sats \ 0 replies \ @OriginalSize 11 Jun 2023

Ha! wtf

0 sats \ 0 replies \ @WeAreAllSatoshi 10 Jun 2023

This made me laugh 😆

32 sats \ 0 replies \ @axzwk 10 Jun 2023

Staking is a scam. The only way I would lend my bitcoin is as an investment to a real world company.

I would only start doing this 20/30 years from now, because storing bitcoin will be much more profitable than anything else during this period.

31 sats \ 0 replies \ @mudbloodvonfrei 10 Jun 2023

I asked a related question on SN, about how credit would work after hyperbitcoinization. If your currency is deflationary, it would be potentially difficult to get paid back in nominal terms.

It was an interesting discussion:

#184704

15 sats \ 1 reply \ @jk_14 10 Jun 2023

"There is no such thing as a free lunch" (Milton Friedman)

Few understand. Even here... :)

20 sats \ 0 replies \ @jk_14 11 Jun 2023

this poll should be corrected:

I wanna tiny free lunch
I wanna free lunch
I wanna nice free lunch
I wanna really nice free lunch
I wanna big free lunch
I wanna f... big free lunch
There is no free lunch? Nonsense!

;)

20 sats \ 0 replies \ @BBitcoinUSA 10 Jun 2023

The results of this poll, if conducted globally, would represent the true market interest rate (ie exposing the FED funds rate and all of the inherent fraudulence). It’s a useful poll for that reason. Another factor is whether the interest income / coupon you receive is payable in USD or BTC.

22 sats \ 1 reply \ @phygit 10 Jun 2023

A few things you got wrong about ETH staking:

. As of today, you can get much better yield than 4.1 from different services (actually close to 8 on some, and close to 5 on some very trusted ones (DYOR))

. Even if they all tend to converge to 4-5ish yield, that was not the case before last Ethereum upgrade. So, many people have been staking for a long time and simply decided to leave their money, since they get a decent average yield over years.

. The thing about "people not being able to unstake" and "being prisoner" is slightly exaggerated. Some services started giving you usable rewards on a daily basis months before the last upgrade (without unstaking). And some allowed you to unstake as well, especially for people who don't have 32 ETH.

Otherwise, your question on Bitcoin is a bit biased. I'm stuck on the words "centralized custodian" that, in my mind, refer to banks, KYC, constraints, and BS. Considering this, I wouldn't stake my BTC, just for privacy sake.

Problem is that there is very little DeFi culture in Bitcoin world. If there were something similar to DeFi on Ethereum, with fully audited staking dApps that don't even know your email address, I would consider staking above 5%.

0 sats \ 0 replies \ @grayruby OP 11 Jun 2023

Thanks for the insights. I just took the current yield from Lido. I know the yield has been higher in the past and I know there is MEV to juice yields etc. Point being it's not a lot of yield to lock up $56k in a high risk asset.

10 sats \ 0 replies \ @OriginalSize 11 Jun 2023

Saylor had a good take on this. Even your biggest option means you think a custodian might last 4 years which I doubt. MR FREEZE IT IS

10 sats \ 1 reply \ @orthzar 11 Jun 2023

The rate of return would need to be over 250% annually to be worth allowing someone else to custody my BTC, because that's the average rate of price increase of BTC. But any investment that promises >250% ROI is either a scam or it's a one-off arbitrage opportunity with high risk.

Holding BTC is far safer and more reliable than any investments right now, especially consider we are going into a global economic depression.

0 sats \ 0 replies \ @grayruby OP 11 Jun 2023

I see where you are going with this but 200% plus past returns doesn't promise 200% plus future returns and custodying with someone and letting them lend out your bitcoin doesn't guarantee 100% impairment but opens the potential for that. I like the framework. I think you are on the right track of how to think about it

10 sats \ 0 replies \ @cryptoquick 10 Jun 2023

Let's see... Reward, 4% in kind, after a year. Risk, earning -100% yield. Sounds like a pretty straightforward decision to me.

lol at the people pushing >25%... Are they not aware of what a ponzi scheme is? ngmi.

10 sats \ 0 replies \ @scottathan 10 Jun 2023

Although I have nothing against lending money out to make interest, my coins are there bc I want something pure, something outside the system, something that can sit and be safe. If I want yeild I'll do it with a traditional asset

10 sats \ 0 replies \ @Undisciplined 10 Jun 2023

This question totally depends on the credit worthiness of the lenders. If the hypothetical custodian is only giving small loans to people with large secure incomes and very low existing debts, then I don't see why you wouldn't lend for a modest return.