So recently I found out about the Lending feature that multiple exchanges seem to be offering. I read about a few of them, and I must say, its quite attractive. For example Bitfinex and Poloniex, they are both reputable exchanges who have been running for multiple years. Ofcourse, Bitfinex has alot more liquidity though. I saw they both offered about 0.03% interest per day on your Bitcoin-investment. (On Polo even higher, up to 0,04xx%) So after doing some math, I found out that if a person would store 65 Bitcoins in there, he would earn about 2.6BTC per day if his loan offers were taken?! I understand the chances of your loan being picked by a margin trader are not 100%. But on Bitfinex, with all their liquidity, it would come pretty close to 100% right? And the only real danger here is the exchange owner running with your funds, or some other hack-scandal right?
This seems to good to be true. Anything im missing here?
You pretty much figured out the implied risk. The risk free rate of return is a lot less than these exchanges offer. The reason, as you pointed out, is that people don't trust them like they do major central banks.
