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A comment on Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”. Parent comment

Re:Cryptocurrency scams cost owners $7.7B in 2021, driven by... by reducesuffering on Thursday December 16, 2021 @11:48AM (#29580264)
My understanding is that the bond market is highly efficient and there is no free lunch. An interest bearing security yielding 8% is a junk bond in today's territory because risk free rate is 0%, and stable corp bonds like Apples are like 1%. 8% is like the price of Argentinian bonds, meaning there is a relatively high chance of default to incentivize capital there compared to the safe 0-1%.

Default meaning, the Gemini coin will be worthless when you try to withdraw. You could try to ride 8% junk bonds for 3-24 months too.

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Re:Cryptocurrency scams cost owners $7.7B in 2021, driven by... by pabl8k on Thursday December 16, 2021 @12:13PM (#29580643)
Yes definitely it could be because of risk. There is also a risk that the GUSD isn't returned (with Gemini it's not actually defi, there is no smart contract mandating its return, there is counterparty risk). I'm not saying it's 8% risk free when the risk free rate is 0%. But the article indicates that there is an actual inefficiency here due to institutional restrictions on cryptocurrencies and an institutional demand for products that approximate them.
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