Topic: BlockFi Interest? (Read 545 times)

BlockFi has entered into a partnership with the investment company Neuberger Berman to develop a line of products and strategies for managing digital assets, according to both companies, they plan to launch products for managing crypto assets, including ETFs and other traditional tools. https://blockworks.co/blockfi-to-launch-new-product-suite-with-private-firm-neuberger-berman/

check out the follow resources:

https://www.cefirates.com/
https://www.coininterestrate.com/
https://coinlenders.net/

Well good luck, i hope it works out for you, if not kindly chew it down with a glass full of water and don't come back to the forum and open a thread of being scammed
besides, i don't think if they have such review that will be of concern, so far from what i read it seems many people are satisfy with their service, or a little satisfy, but you know what they say, not your keys not your money, if whatever you will get back from lending is worth the risk, then carry on

It's still banned for you in that case. They do verification. Just look up Bitmex to understand how far your government will chase you if you bypass this restriction:)

Your only hope now is to "wrap your Bitcoins" so you can stake them in one of the defi earning pools but this still needs you to trust some defi algorithm. Which I think isn't a great move in any case judging from MakerDAO people losing all their money during extreme market crashes.

Yea im aware of this.  They do verification right... blockfi?


So what other sites can i use where there is no restriction?  Im from the US but from a restricted state... but im abroad basically almost all year though.

You can read their terms regarding this here (emphasis added):


Being abroad does not mean you are no longer resident in the US, unless you predominantly live abroad and take up residence in the country you are residing. If you haven't done this, then you are still a US resident and are banned from using their service, regardless of your physical location at the time.

Their terms are also quite clear that if you breach these rules, they can close your account and may not return any coins they are holding for you at the time.

So I cannot use blockfi because im in a restricted state in the US.  Is there a way to use blockfi though if im abroad which i am at?

The BlockFi platform has issued a Visa credit card with 1.5-2% cashback in bitcoin for customers in the United States. To date, the waiting list has exceeded 400 thousand people. BlockFi CEO Zach Prince expects that the company will have time to fulfill its obligations to them by the end of July. https://www.newswire.com/news/blockfi-announces-launch-of-the-blockfi-rewards-credit-card-to-us-21437194

That's what they offer you or me if we go to their website and apply for a loan. That's not what they offer institutions, investment trusts and funds, and other big players, who as we are particularly seeing at the moment with the GME hilarity, can get themselves tied up in bad positions and end up losing significant amounts of money.

Have a read of their Terms of Service i quoted on the first page:
Emphasis added. There is no requirement for BlockFi to hold any collateral whatsoever. They will quite happily take your coins, lend them out, and keep nothing in reserve.

Proceed at your own risk.

but Blockfi only offer collateral backed loans at a 50 loan to value rate.

You want to borrow 1BTC, you will have to deposit 2BTC

I understand they have introduced centralised services into a realm which was
designed to be decentralised and that Bitcoin offers everyone the possibility
to be independent.

There are definitely risks.

Why? Because they are a big name? Big names can scan or go bankrupt too. Mt Gox was the biggest name in the business when they lost 850,000 BTC of their customer's money. Binance lost over $40 million of customer's money in a hack. Cryptopia was a pretty big name when they were hacked. Outside of exchanges, look at BitConnect. It had a marketcap of $3 billion at its peak before everyone lost everything. Outside of crypto, look at the Lehman Brothers. $600 billion in assets when they filled for bankruptcy.

There is no such thing as "too big to fail", an there is no such thing as "risk free". I put very little trust in centralized exchanges at the best of times, and I put even less trust in centralized services who are going to hand out your money to random strangers without even telling you where it is going or who is getting it. Even if you trust Gemini and BlockFi 100%, they aren't the ones holding your money. The unknown third parties they give your money to are the ones holding your money, and if these unknown third parties don't pay up, as per their terms of service you can wave goodbye to your money and you have zero recourse available.

You have to worry about the massive ongoing inflation and devaluation of the dollar.

oeleo i get what you mean with your last paragraph...


But if you are speaking about blockfi here... and they are associated with gemini... then isn't it almost risk free?


And to that person that said if you had million dollars... buy btc at the price now... and you could possibly double it in a bull market.  I get what you mean by that... but that isn't a guarantee.  If you have it all in stablecoin as in the usdc or gemini coin... then isn't that as safe as you can get?  How much percentage were ppl getting on lending on bitfinex a while back?


But surely there are ppl that do this on blockfi?


I mean... imagine someone with a million dollars.  Put the whole thing and buy stablecoin... earn 86k a year without worrying about any fluctuation of that coin since its pegged to the dollar.


Has there been any disaster or bad stories of anyone doing this on blockfi though?  Of course you have other scam sites which can do that... but blockfi ... isn't it as legit as you can get?  I read they give this much interest because they lend to others at a even higher rate... so there is no concern etc.

If you accept that risk that you are handing over a million dollars worth of crypto to a bunch of anonymous internet strangers, who are then going to take your million dollars worth of crypto and hand it out to even more anonymous internet strangers, but it is OK because they totally promise they will pay you back, although if they don't pay you back then you have already forfeited all rights to hold them accountable. Oh well.

Yes, theoretically, if you had a million dollars worth of a stablecoin then you could make $86,000 a year in interest, but the risks are huge.

Doesn't really prove anything. Scammers often lure in victims by paying out interest/winnings/profits on small deposits to entice users to deposit larger sums of bitcoin. If the company lends out $5k and doesn't get it back, they might be able to absorb that loss and you are none the wiser. It is more doubtful whether they could absorb a loss of $1 million. Or maybe the people they lent your $5k to all happened to be trustworthy and able to pay it back on time. There is no guarantee that the people they lend your $1 million to will be equally trustworthy.

I've got a better idea: put that million bucks into BTC at $30K and double your money inside a month or two off this bull market. These interest rates are pitiful compared to BTC's gains.

And the best thing? I can hold BTC in my own wallet. I don't need to trust Blockfi and Gemini.


People used to say the same thing about lending on Bitfinex in 2016. I mean yeah, if you're comparing to cash in a savings account or holding blue chip stocks, the income is pretty good.

In my view, the gains don't justify the risks.

Okay so if someone here had a million dollars  in crypto or in the bank... wouldn't it make sense for someone to put it all in blockfi and buy the stablecoin of usdc or gemini coin or paxful coin?  Then earn interest from it then?  At end of month, you going to earn more than 7000 usdc or gemini dollars... do it for the year... then you have l,086,000 usdc/gemini coin.... then sell it all for fiat... cash out to your bank account... and you make like 85000 dollars usd that way... is my math correct?  Im discounting l,000 dollars in fees because if you sell l,086,000 usdc on blockfiat to fiat... how much fees you pay?



I gotta wonder... for someone who put that much money in it... when blockfi processes the withdraw... they are extremely careful with it right?  Like imagine the entire process of when a person wire a million in cash or crypto to them... then sell it all for stable coin of usdc or gusd? 



I mean... someone could test it out by sending say smaller amount... then putting the big amount to do it right?  Thus imagine someone with million dollars worth of crypto.  Send 5k there.  Then trade it all for usdc or gusd?  Then wait a minute... earn some money for the month.  Then send the rest of the million dollars there.  Sell it for stablecoin/gusd... then wait a year... make over 86000 dollars?  I mean... thats a lot of money a year in passive income for doing nothing if you have a million dollars in crypto... or the bank... dont most of you agree?  I have to assume there are ppl that are doing this with big amounts?  Of course i dont mean like a million... but imagine some with 6 figures.  Thats a lot of money in 8.6% interest if you do it all in stablecoin since you can immediately sell it for fiat.

Well I'm gonna give them the benefit of the doubt.
We all did getting into crypto.
Might as well let it work for me it may not be idea for all given their situations and history.


It's a bit risky on the lending aspect your absolutely right on that. No explanation needed.

I'm a risk taker. What can I say.

That's the main issue. All you can do is hope that they are taking the necessary measures and care. You have no way of knowing, no way of verifying, regardless of what they say.

The 4 day withdrawal is because they do not have your funds to return to you, and certainly not in cold storage. Your funds are loaned out to third parties or invested in high risk vehicles. It takes them time to either cash out or collect the necessary funds from various loan payments or what have you so they can process your withdrawal.

Disagree. These nuisances are a risk to your coins. Better to hold your coins and keys in your own wallet.

The way I see it, it is a lot of trust in technically 2 parties (Gemini being one and blockfi being the other.) I could argue the risk given historical circumstances in crypto but i choose to be a little more optimistic with this and have seen results.

Given the structure of the service I think I can write out scam potential. They have pretty lucrative revenues via fees. especially if you use there dashboard swaps.

I just got to hope they are taking necessary security measures with my coin.(4 day withdrawl makes me feel like majority of funds are cold,it also gives review time for suspicious activity.
I've been around long enough to know these are nuisance's but in my best interest.
 I dont personally use the stablecoin feature much as the fees make me hodl. That's kinda why I like blockfi it forces your hands to be stronger haha.

Same here. I've consistently heard about smart contracts flaws in the news. I just can't trust one that hasn't stood the test of time. Also as far as I've seen the yield rates are significantly lower for WBTC than on centralized platforms.

Maybe if we would have a respected audit company that could certify and insure the solidity of the code, I would use it. Until then it is too big of a risk for me.

I'm a tad paranoid about smart contracts malfunctioning, or unexpected results due to network congestion. MakerDAO's "Black Thursday" comes to mind.

If you want to lend bitcoins, I don't think there are any non-custodial options. The closest thing would be lending WBTC on a decentralized platform like Fulcrum.

What about non-custodial lending platforms?
There's no risk of them running off with your assets.
Other risks still involved.

How much trust can you put in a company? Gemini is a trusted institution in the crypto space and they are a licensed business with quite a lot of security credentials, but that does not mean it is fail-proof. As long as your deposit is not covered by FDIC you can't consider it as being 100% safe. That's why I encourage you to practice good risk management and don't put your whole net worth into the savings account.  Can you afford to lose the whole hypothetical $1M in the case of a hack or in the unfortunate situation Gemini goes bankrupt?

I get what oeleo is saying here.  Had you kept the btc as oppose to sell it for say GUSD... the value you have now with btc will be higher than the interest you earn with just buying the stablecoin gusd.  But the thing here is you have to look at the price of btc.  With Gusd... its a constant 8.6 percent.  So if someone is risk averse... why not take that?  I mean 8600 dollars on l00,000 usd is a lot of money in a year.  Again if someone had a million dollars... thats 86000 usd dollars. 



Like if you want constant income stream coming in... wouldn't it make sense to put it in a stable coin like Gusd?  Like imagine having a million dollars in the bank... send it to gemini... buy a million in stablecoin... gusd... then make 86000 usd a year. 

Yea... i was more referring to these coins as oppose to tether.  USDC and GUSD... i mean these are pretty much as safe as you can get for a stablecoin right?  I mean unless gemini gets bankrupt... isn't having GUSD pretty safe?



Yea... so if someone has a million dollars and put it in gemini and buy Gusd for example... well they are going to earn 8.6 percent interest or 86000 usd a year right and they don't have to be concerned of fluctuations... but being custodial... isn't it still safe since well its with gemini?

Well the thing is i heard about tether for years.  People say its not safe... but right now if you have a lot of tether... well you can just sell it for fiat.  I mean... tether has always been around a dollar correct?  I think once saw it a while back at 0.98?  So wouldn't that mean there should be no concern though?

I see what you were referring to now. But then again it all resumes to managing risk:

• In terms of historical returns, nothing beats Bitcoin for sure.
• Perhaps it is wiser to have some fiat compounding as well and not keep everything in BTC.
• I think a % based portfolio allocation strategy should be employed. For me these lending platforms are somehow similar to P2P lending where you lend money to different projects, so I think even a 30% allocation in any of these digital finance platforms (as long as they are not insured by a financial authority, is too aggressive)

These might not be insolvent like Tether is, but they can still be frozen by the token issuers. Remember in this case your coins aren't just sitting in BlockFi's wallets - they are handing them out to unknown third parties. If one of these third parties does something which raises suspicion, then the stablecoins could be frozen, and as per the Terms of Service I linked above, you will not be refunded and you will have no recourse.

You can make better fiat returns if you are comparing holding bitcoin to "investing" a stablecoin, as jerry0 did in his example.

If a year ago I bought $100,000 of GUSD at $1 each, I would have 100,000 GUSD. If I then gave them to BlockFi to gamble "invest" on my behalf, then today (assuming nothing went wrong) I will have 108,600 GUSD worth $108,600.
If a year ago I bought $100,000 of bitcoin at $8,000 each, I would have 12.5 BTC. If I then held them in my own wallet, then today I would definitely still have 12.5 BTC worth $437,500.

again , blockfi does not use teether

Agree with you regarding Tether. Holding a stablecoin whose backing is insured by a third-party exposes you to unnecessary risks - why not just hodl the fiat instead...

You can't really make better fiat returns by just holding BTC. Blockfi pays interest in-kind so you actually get a surplus of 6% annual return on top of the against-fiat appreciation.
Yes, there are risks involved and everybody needs to decide for themselves if this type of investment is for them. Although they are not regulated by FDIC, a lot of investment firms allocated capital in this venture. So you can't look at like at a Seychelles island, off-shore bucket shop. They're also properly licensed in U.S. for providing money transmitting services so they have to respect certain regulations regarding who they work with.

The have
Usdc&
Gusd
Not teether.
They also have paxg
@OP aim for a million on GUSD @8.6% and make about 7.1k a month if your not worried about the service being custodial.

And $100,000 is a ton to lose when one of the many, many intermediate steps or third parties messes up.

Especially if you are using a stablecoin like USDT, then you have just added a bunch of additional risks on top of all the risk I explained above. USDT is centralized and coins can be frozen at will, and there is nothing you can do about. Tether is likely insolvent, as they printed $700 billion out of thin air to bail out the other arm of their company - Bitfinex - which are yet to pay them back. Tether is not backed up 1-to-1 with USD like they claim. I wouldn't even hold $1000 of USDT in my own wallet, let alone $100,000, and let alone $100,000 in someone else's wallet.

Now, take all the risk that Tether itself brings, and add that to the all the risks of holding a large amount of money with a third party (scams, hacks, phishing, frozen accounts, etc.), and then add all that to all the risks of this third party lending out your money to any number of unknown third parties (scams, hacks, phishing, theft, insolvency, misplaced/lost keys, non-repayment of loans, poor investment decisions, etc.) and the fact that if any one of these things goes you have zero recourse whatsoever and your funds will be lost.

If you are happy with all those risks and potentially losing $100,000, then go ahead. I for one wouldn't touch it, especially when you can make better fiat returns just by holding bitcoin securely yourself.

Yea i know if you lend btc in blockfi... interest is btc and not fiat.


But isn't it better to invest in stablecoin since when you get it... you sell it for fiat?


Example someone with l00,000 dollars and buy stablecoin or usdt of that amount would earn 8600 dollars... that is a ton.

Obviously we must be mindful of the term "only invest what you are willing to lose"

I have Bitcoin, Ethereum and Litecoin on Blockfi for the last week, small amounts
initially to get accustomed to the workings of it.

Bitcoin ROI currently is in its own league but the Bitcoin amount isnt growing only
its FIAT value. Blockfi offers an avenue into passive earning.

For those who lend Bitcoin to Blockfi the interest generated is paid in BTC, not FIAT

Ask yourself, can you take a risk to loss all your money for $860 in a year? If you can, go for it.

BlockFi is some third parties that can control your money, if you send/deposit your money to them... they can use it for whatever they want. Or if they got hacked, your funds can be loss too.

IMO I don't think why you need to earn interest by invest in third parties while Bitcoin can give you better ROI.

Yes
Simply put , yes.
They also give you adjusted %on swaps, interest accumulated displays in usd amount. But is based on whatever coin you pick, they offer gusd,btc,ltc,eth and paxg (gold)

You can only borrow half of what you own.

Withdrawls take 4 days.

They are a custodial coin holder there is risk.
 And honestly , they have a very limited and simple dashboard.

I've been testing them out. But not a year. Few weeks in.

Okay.  But has anyone here gotten the stablecoin and then kept it there for a year... then cashed out?  So someone with I0,000 dollars... put that there... end of year have a l0,860 in stablecoins.  Then immediately sell that l0,860 stablecoins for l0,860 usd fiat?  Then withdraw to their bank?


If thats the case, wouldn't it make sense to do this with bigger amounts?  Again someone with a million dollars could earn 86000 dollars this way a year? 

There is more risk for the borrower though, Blockfi only offer 50% loan
to value Collateral backed loans. If you want to borrow .5BTC you have
to give them 1BTC if the value of you borrowing goes down you would
have to increase your collateral or risk losing your 1BTC

Blockfi charge the borrower 4.5% interest on that .5BTC and they are
also lending out the 1BTC collateral at 4.5%

They also make a nice revenue from their fees > https://blockfi.com/fees/
by having a lending account the fees for Bitcoin are as below:

Withdrawal Limit: 100BTC per 7-day period   FEE: 0.0025 BTC

The risk. Take a look at some excerpts from their Terms of Service below:



First of all, you have to leave your coins in the complete control of a third party. History has shown us time and time again how well that usually turns out. Platform hacks, account hacks, poor security, exit scams, insolvency, leaks, you name it. Not only are you giving your coins over to BlockFi, but they are then giving your coins out to any number of third parties without any notice to you, or even telling you who they are giving your coins to. There are no requirements for BlockFi to hold a similar amount of collateral. If any of these third parties make bad investment decision, fail to repay their loans, lose your coins, etc., then the unknown third parties and BlockFi will bear no responsibility whatsoever and you can wave goodbye to your coins.

Yes the interest as advertised is real, for BTC the interest is 6%. the interest is accumulated every day
and added to the balance after 1 month, then you earn 6% interest on that also.

So its like compound interest but only compounded per month.

There is no catch because they also offer loans to people wanting to borrow and afaik they are at a rate of 9%.

So someone told me about this site as they buy btc/eth there.  They told me you could get 6 percent as interest if you put btc there.  And around a bit less if its ETH.  But if you have the stablecoin there... you get 8.6%.
I checked the site and see that... but what is the catch here?  I see its not fdic insured by backed by gemini.



So that means if you have one btc... leave it there instead of a wallet... you going to get 0.06 btc by the end of the year?  Do they pay it weekly?  Monthly?  Daily?  And it compounds obviously right?



Now the thing im more curious about is the interest on the balance.  It says you get 8.6%.  First off... you need to convert your btc to the stable coin first?  Or you deposit usd from your bank to blockfi?  So example, let say you want to have I0,000 in the blockfi account.  Then if you keep that amount there for whole year... you get 860 dollars?  So if someone has a million dollars and put it there... you going to earn 86,000 usd in interest?  Or does that interest rate change daily/weekly?  That doesn't make sense since well banks pay you almost nothing for interest... u might one percent at almost if you are lucky.  So what is the catch here?  I read its a stable coin so USDC and GUSD always stays around a dollar right?  I see they offer usdt tether at 9.3%.  This seems ridiculous with the rates since tether is always around a dollar.  So its not like you get interest but say the coin drops down in price... sure you get interest but if the coin drops in price a lot... you actually lose money.



Can someone explain all this?



Because this seems way too good to be true?  I do see its backed by gemini.  But couldn't someone with a million dollars just have that there and make 86000 usd a year?  Like at end of year... sell all that usdc or gusd and converted it to fiat and pay that small fee and thats its?



Because couldnt someone with a decent amount of money in the bank just put their money in blockfi and buy the stablecoin and make interest since theres in fluctuations as compared with altcoins?


But what really shocks me is you getting interest on btc with more btc.  Like if you put a btc there... u get 0.06 btc a year... as oppose to keeping it in a wallet.  Imagine someone had ten btc... then they going to earn
0.6 btc a year risk free?