What’s with all these Ponzi type APR on Stablecoins?
What’s with all these Ponzi type APR on Stablecoins?
So I know there are a few places where you can be a LP and gain about 4% APR for your stablecoins like USDC and USDT.
You can also just keep it in your US savings account or buy bonds and get 5-6%. This I understand.
But I keep seeing these protocols like Mute.io which is KOI now and Zk Finance and they claim they pay 20% for staking your stable coins.
You need to add it to the pool and then add it to some farm. And you get 20%. My question is where is this 20% coming from?
On many LP you only get 3-4%. And they are paying 20%. I would understand if this was some memecoin which gave 20% APR because those are at risk of going -90% but for a stable coin, paying 20% almost sounds Ponzi like.
What is going on here ?
Yes you guys are right. The APR rewards is not in the stablecoin but it’s paid in the native token. So for ZK finance you are paid in ZF. Looking at the chart of ZF it’s declining but not that much.
So I guess it makes sense. They pay these huge APR but issue it in their native Token and hope most people don’t sell the token and use it instead.
Ok makes sense. I assumed it was some scam going around.
Thanks for the replies.