Interest rate will probably be 4.5% a week. The risk is if pirate defaults, you will lose your bitcoins. Of course there's also risk of me running away with your coins. But I hope people trust me enough not to do that.
Why wouldn't someone just invest in a PPT that pays >6.5%/week, then turn the BTC dividends into LTC?
What might be useful is if you accepted deposits in LTC.
And paid out in LTC as well...
I would love to accept deposit in LTC. Problem with that is if LTC appreciates in value with respect to BTC, and then if you wanted to withdraw in LTC, I would have to take a loss to buyback those LTC.
To me the obvious solution to that problem is to just keep the user's balance in BTC. The simplest (but not best, most likely) solution is to just take the most recent price for BTC/LTC and use it to convert a deposit into BTC. This is susceptible to a user running up the price by buying a lot of LTC, then depositing it all before the price stabilizes, causing you to take a loss. A better solution would be to use the same average exchange rate that you are finding when paying interest, such that deposits of LTC are pending until the end of the interest period, at which point they are converted and put into the balance.
I feel like accepting LTC would make your PPT really stand out among the ones available, and it would help reduce the number of LTC you have to buy on the open market. Essentially what you would be doing is cutting out the share that the trading website takes, because instead of investors selling their LTC for BTC, then you converting BTC to LTC to pay interest, you just pay out some of the LTC sent to you.
