“But Patrick, that’s a lot more than you’d get at a bank.” This *is not a deposit*. It is a loan to a counterparty with full counterparty risk, *in crypto.* The comparable is not a savings account at Chase (takes losses never), it is probably Chase preferred stock.
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Chase preferred stock has no material upside and takes losses relatively early (before bonds and depositors). Deposits at a crypto counterparty may theoretically be senior to equity but this is, ahem, not something that the cryptocurrency economy routinely delivers on.
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And because crypto what savings account would be complete without it actually being an exotic currency derivative.
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“Earn interest on crypto, in crypto.” Fine print: well actually earn interest in the dollar-denominated amount of a loan whose payins and payouts happen to be on crypto fails at then-prevailing prices (as determined by us).
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Darn autocorrect: “crypto rails.” (“Rails” in this context is a bit of financial industry jargon/shibboleth referring to a system which moves money, inclusive of technical, legal, and relationship parts of that system.)
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End of conversation
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Curious what your take on Celsius Network is. Is it in the same category as BlockFi?
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