, 6 tweets, 1 min read Read on Twitter
In cryptocurrency’s continuing quest to reinvent everything in the financial universe but do it worse, we now have the crypto “deposit account” which bears 6.2% APY.

blockfi.com/earn-bitcoin-i…
“But Patrick, that’s a lot more than you’d get at a bank.”

This *is not a deposit*. It is a loan to a counterparty with full counterparty risk, *in crypto.* The comparable is not a savings account at Chase (takes losses never), it is probably Chase preferred stock.
Chase preferred stock has no material upside and takes losses relatively early (before bonds and depositors).

Deposits at a crypto counterparty may theoretically be senior to equity but this is, ahem, not something that the cryptocurrency economy routinely delivers on.
And because crypto what savings account would be complete without it actually being an exotic currency derivative.
“Earn interest on crypto, in crypto.” Fine print: well actually earn interest in the dollar-denominated amount of a loan whose payins and payouts happen to be on crypto fails at then-prevailing prices (as determined by us).
Darn autocorrect: “crypto rails.”

(“Rails” in this context is a bit of financial industry jargon/shibboleth referring to a system which moves money, inclusive of technical, legal, and relationship parts of that system.)
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