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Gemini Earn

gemini.com

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Re: Gemini Earn

#21

Post by quickthrowman »

rootsudo wrote: post #5
kylebenzle wrote: post #4

Earlier quoted context omitted.

Awesome! So I can get a 7% return and all I have to do is trust random strangers with ALL of my money.

Which is..exactly the same when compared to a bank, a brokerage account, or index fund.

Bank accounts are FDIC insured up to $250,000 each.

If your broker lends out your stock to short sellers, it will always return your shares, even if the short seller gets margin called and doesn’t have the money to pay back their broker.

I’m not sure what you mean by “index fund”, but securities/stocks are protected by SIPC insurance, up to $500,000 per account. You will get your stocks back if a brokerage fails.

Re: Gemini Earn

#22

Post by rootsudo »

passwordis1234 wrote: post #9
rootsudo wrote: post #5

Earlier quoted context omitted.

Which is..exactly the same when compared to a bank, a brokerage account, or index fund.

those institutions are not lending your money out in uncollateralized loans.

Yes they are, banks operate on fractional reserve. Banks do signature loans all the time. A popular one is known as a credit card.

https://www.investopedia.com/terms/f/fractionalreservebankin...

It does not protect if the asset invested in goes down in value.

FDIC is protection against the bank being insolvent.

SIPC does not protect customers against losses from the rise and fall in the market value of investments.

https://www.sipc.org/for-investors/what-sipc-protects

Re: Gemini Earn

#23

Post by rootsudo »

quickthrowman wrote: post #21
rootsudo wrote: post #5

Earlier quoted context omitted.

Which is..exactly the same when compared to a bank, a brokerage account, or index fund.

Bank accounts are FDIC insured up to $250,000 each. If your broker lends out your stock to short sellers, it will always return your shares, even if the short seller gets margin called and doesn’t have the money to pay back their broker. I’m not sure what you mean by “index fund”, but securities/stocks are protected by SIPC insurance, up to $500,000 per account. You will get your stocks back if a brokerage fails.

A bank does not mean bank account, banks offer many different investment vehicles.

A savings or checking account is covered by FDIC. If your broker lends out your stock and can not recoup it, then you are also not protected by SIPC.

https://www.investopedia.com/terms/f/fractionalreservebankin...

Re: Gemini Earn

#24

Post by greyface- »

rootsudo wrote: post #17
greyface- wrote: post #6

Earlier quoted context omitted.

A bank, brokerage account, or index fund would have FDIC or SIPC insurance coverage.

It does not protect if the asset invested in goes down in value. FDIC is protection against the bank being insolvent. SIPC does not protect customers against losses from the rise and fall in the market value of investments. https://www.sipc.org/for-investors/what-sipc-protects

There's no disagreement here. FDIC/SIPC protect against insolvency. The context of this discussion is borrower credit risk, i.e., the risk that the borrower becomes insolvent.

Re: Gemini Earn

#25

Post by comboy »

rawrmaan wrote: post #11

Poor interest rates compared to other more established competitors like https://celsius.network/

This "established competitor" (which I have never heard of, but I'm not very up to date) has domain registered on 2020-06-08 ...

Many popular exchanges have been offering staking for years.

Re: Gemini Earn

#26

Post by Acrobatic_Road »

bdcravens wrote: post #10

This is just crypto p2p lending, which is hardly new. Fraud is rampant in this space.

it's not, this is either overcollateralized lending like compound finance or dharma, or it's flash lending. You don't have to worry about fraud.

edit: this line sheds some light: "Gemini is partnering with vetted and accredited third party institutional-grade borrowers including Genesis Capital". So they are lending your money to accredited parties, not random people on the internet.

Re: Gemini Earn

#27

Post by piercebot »

I may have missed this on the page; is the interest paid in USD or in the asset you're lending? The examples only show USD.

It says interest compounds daily; keep in mind (US Residents) that every day is another line item you need to report to the IRS.

Re: Gemini Earn

#28

Post by piercebot »

What's the market for borrowers? What are people borrowing cryptocurrency for?

With fiat interest rates at record lows, why not borrow fiat instead and use it to buy crypto? Surely not all of the demand is coming from the unbanked?

EDIT: My question was answered while I was typing it up :)

https://news.ycombinator.com/item?id=25996264

Re: Gemini Earn

#29

Post by JumpCrisscross »

rootsudo wrote: post #23
quickthrowman wrote: post #21

Earlier quoted context omitted.

Bank accounts are FDIC insured up to $250,000 each. If your broker lends out your stock to short sellers, it will always return your shares, even if the short seller gets margin called and doesn’t have the money to pay back their broker. I’m not sure what you mean by “index fund”, but securities/stocks are protected by SIPC insurance, up to $500,000 per account. You will get your stocks back if a brokerage fails.

A bank does not mean bank account, banks offer many different investment vehicles. A savings or checking account is covered by FDIC. If your broker lends out your stock and can not recoup it, then you are also not protected by SIPC. https://www.investopedia.com/terms/f/fractionalreservebankin...

> If your broker lends out your stock and can not recoup it, then you are also not protected by SIPC

This is not true. The broker would be in default to you. If that literally pushed the broker under, SIPC would be there to pick up the pieces.

Re: Gemini Earn

#30

Post by formalsystem »

Am I missing something about crypto lending? Your deposit can't be FDIC insured and if borrowers are defaulting that means your deposit disappears. You can't bailout a crypto bank by printing crypto.

The appreciation of Bitcoin has been so staggering that it also makes getting interest back on your deposits seem rather outdated.

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