The market interest rate is skyrocketing. Centralized platforms like Celsius, Nexos, BlockFi and exchanges like FTX are offering higher interests from 11-12% to 15-18% to lenders. Meanwhile, they are demanding higher interest rate for borrowers due to high demand of stablecoins. We as an uncollaterised lending platform shall demand for at least similar rate to these platforms that mostly offer collaterised loans. I think 15-16% is still affordable for new borrowers and 13-14% is still mutually beneficial to our early adopters like Wintermute and Alamenda. 11-12% is unsustainable for our long-term growth. Even though we have TRU staking rewards for lenders, higher TUSD rewards is still good for improving TVL. I hope that our dearest borrowers can offer us higher interest rate and our community will give more support and stake more TRU in these requests.
@Raccoon I completely agree we should demand higher rates. We are working on some protocol upgrades that will do this automatically. In the meantime, we could vote ‘no’ on some of the borrowers’ outstanding loan requests and tell them they need to offer higher APY if they want to get a loan.
You bring up a valid point. The rates the borrowers are setting since they set them themselves are as as low as they can be. The only fixed requirement right now is >10%.
In the spec for open term loans there has been some thought about how to set these rates more dynamically. See video
To the extent anyone has input on how to best do that, we’d love to hear it!