Any Institutional Borrowers of CeFi (Celsius, Nexo, APYHARVEST, BlockFi) Here?

[cryptosmartmoney]

Can you provide some insights as to why you are borrowing from these CeFi platforms? (instead of from DeFi or exchanges directly?)
What are your experiences with them?
Which of them provide the best deal and services?


Your answers will be very helpful for retail lenders who are lending to these platforms

[1715122558]

1715122558

[1715122558]

1715122558

[DarkStar_]

I would be surprised if there were institutional borrowers using BlockFi (and probably the other 3 you listed as well). BlockFi, as well as many other CeFi companies such as Ledn gives most of their deposits to Genesis, which is where institutional borrowers would likely borrow from. Genesis gives depositors a 2% return on their Bitcoin, so I'm assuming the interest rate for borrowing Bitcoin from Genesis will be much cheaper compared to any of the retail offerings you've listed and will be competitive with DeFi/exchange offerings.

[cryptosmartmoney]

Thanks so much for the information.

From the information I saw, these firms increase their yields through a process called rehypothecation (this is a bit like money multiplier...)
e.g. by the CFO of Celsius Network  https://celsiusnetwork.medium.com/what-we-do-how-we-do-it-9a82124f7159

From my understanding, US has a cap of 2x rehypothecation while UK (where Celsius and ApyHarvest are based) has no such caps (in the traditional space, not sure if cryptos fall into such restrictions) .. The UK ones claim to be doing it at 4x to 5x (which potentially suggest that they can offer higher yields on deposit than BlockFi due to regulatory differences)....

I am just curious how this actually works...  does the custody partner (like Genesis) provide such services or they have to do it on their side? Most of them claim to be doing mostly collateralized lending... but why would institutional borrowers put some cryptos as collateral and borrow some other cryptos?  Which cryptos are mostly used as collaterals? BTC or stablecoins such as USDT/USDC?