Thread you can share with normies.
(1) borrowers are willing to pay more.
(2) lenders are earning bonus fees on top of what borrowers are paying them.
(bonus) we'll cover later.
In addition to being able to lend out the money they just borrowed from you, their fees are being subsidized.
They are getting paid to borrow.
It would be like if American Express paid you a tiny bit AMEX stock every time you paid interest on your credit card balance.
This means people are incentivized to borrow just to "farm" the cashback.
This increases demand for loans and subsequently increases how much lenders can earn.
Based on current rates, that can get you to around 50%.
Because people are getting paid to borrow, lenders can take the money they deposited and use that to borrow more money. They can then take that money and lend it.
This gets overall APY closer to 100%.
Now with your USD you can earn 100% APY instead of the 0.01%-1.00% your banks are offering you.
Fellas thats a 100-10,000X increase.
People that want to maximize earnings will swap to the flavors with the highest rates.
And there's a way to profit from this activity.
(1) Demand for borrowing is high,
(2) There are big juicy subsidies in the market, and
(3) Lenders can earn additional fees by helping traders exchange their different forms of USD.
Is it 20,000X riskier? Probably not. But please get educated on all the risks before putting your life savings into this.
But these dynamics won't go away altogether either.
If you're new, play around with a few dollars and learn. There's a lot of opportunity here and tons of people looking to help you learn.