Re:DeFi risks and the decentralisation illusion
by aantix on Tuesday December 21, 2021 @04:28PM
(#29642336)
How do so many coins offer absurd APRs for staking?
[ Parent
| on HN ]
Re:DeFi risks and the decentralisation illusion
by hrhrhrhrhr on Tuesday December 21, 2021 @05:40PM
(#29642994)
The APR is paid in the coin itself, not dollars, so they just inflate the supply to pay the "yield".
Re:DeFi risks and the decentralisation illusion
by reducesuffering on Tuesday December 21, 2021 @04:34PM
(#29642385)
It's the same principle as junk bonds. The less people believe that their principle will be recovered, the higher the APR to incentivize buyers. If some $100 coin offers you 100% APR, you best believe it's not likely that your original coin is still going to be worth $100 at the end of the year. More likely you'll have 2 coins worth $50 each now.