Bitcoin Forum

binance the popular site exchange and some questions on lending
why binance does not add lending for long term?
i think that current strategy of  two weeks (3% annualized) and total subscription cap( 3000 btc) not enought
because 14 days or even 28 days can't control the fear of  investors who want hold bitcoin till end 2019 at latest such crash of current days
if binance creat special box loan fund (100000 million btc or more  )for longterm 3 month or more for (6%or 3% or 1% annualized) .. too little , but the dump will stop?

Binance doesn't makes such scheme because they want people to HODL. When Binance creates a scheme such as of 14 or 28 days there are hundreds of Technical analysts who formulate an idea about where bitcoin could land in next 14 days or 28 days. They create atleast 3 possible projections and then decide to open such scheme. This is because binance doesn't wants to suffer losses due to pumps and dumps in price of BTC. Year long projections are really hard to make and the accuracy degrades drastically. Moreover this thing is more of a trial launched by Binance as they have just started with things who knows in future Binance might launch some term deposit plans.

It is their decision to not create a lending box or anything that can be a scheme by other people to the point that people will lend and vanished to thin air possible but Binance if too cautious to make such transactions, or maybe Binance would not want to tolerate such method of lending and holding people tend to take hope from lending and never work their ass properly, But I got your point because lending can sure save some tight spot when you are in an emergency but I think it is a good thing that Binance doesn't have any lending scheme because sometimes people tend to just feel the result of lending in having that money on your hand but not the responsibility of repaying the loan and I think they are just avoiding credit risk in my opinion.

You realize these loans exist so that traders can short sell BTC, right? Your plan would only create a bigger loanable supply for shorting the market, which would in turn pressure lending rates downward, making it even cheaper to short.

If Binance is lacking in short liquidity, they'll add longer term options or increase the rates. It won't stop the market from dumping though. :P

They know that they can make profit only short term. Long term, they would not be able to liquidate traders as much as they can do now.

There is very little money to be made by lending out BTC. You are better off just selling it and just keep it in your Saving account at your bank and at least it's insured by the government. BTC lending is usually for most hodlers but the gains we get from lending is usually very low that it's better keeping it in cold storage where you know it's secure.

The real money is lending out tether or Fiat. If you lend out tether or fiat depending on the exchange you can get at least 10% a year which is very good. You can also just keep Synthetic USD with a futures broker and get almost 1% a month or so.

Lending schemes are often successful in stable systems that do not experience volatility and thus try to take advantage of price stability to achieve gains by charging more fees.
The fluctuations in the price need to be sufficient guarantee to do this, which means more complex procedures, which require more staff (to get a gain of 3%.) I think Binance is thinking of making a profit smarter.

because it is not profitable for them! binance like any other exchange is aiming to maximize their profitability. that means doing easier things with least amount of effort and sometimes risk to make the most amount of money.
creating their own token (with no cost) and selling it to people to make millions, practically inventing IEO scam and making millions for letting scam tokens to be listed as legit ICOs on their platform.... are so much easier than doing anything else. so they put all their focus on these things instead.

Well said!

Why would they look for other things if there were much simple and profitable for them?
Lending profits do have lesser benefit into their side so they do stick out with that IEO hype.
Millions compared to dust benefits? No brainer on which one they would choose.

10% a year that's shockingly high. I'm pretty sure that this form of business isn't sustainable at all.

It might even be an attempt to get regular fiat savers to buy USDT and hold it on an exchange as Binance just because of that crazy high interest rate. With how regular interest rates on savings accounts have gone far south under 1% a year, this is a smart move from Binance. One more instance of ignorance and greed that will lead to severe losses. It's doomed to fail.

With banks you know that you are dealing with an entity that won't likely run with your money or reduce it to dust, but come one, this is a crypto exchange ffs.