zlacker

>>mkeete+(OP)
What's funny about this is that I can recall discussions here and elsewhere from only a few months ago questioning the "guaranteed" super-high returns. I forget who said this but someone awhile ago said in finance said that if someone is promising you consistent above-market returns it's either a scam or there is unknown or undisclosed risk.

And the Crypto Andys were all like "you just don't understand DeFi!" to which the retort is "No, you just don't understand finance".

Finance is the way it is for many reasons. There are thousands of years of lessons that have made the system the way it is. I get the innovator mentality of sweeping away the old but there seems to be a fine line between innovation and ignorance.

I'm just sitting on the sidelines watching people relearn all the lessons of finance the hard way, some because they think they understand finance because because they understand merkle trees and consensus protocols but really most just want to get rich quick.

>>jmyeet+hg
And the Crypto Andys were all like "you just don't understand DeFi!" to which the retort is "No, you just don't understand finance".

If you believe the statement "if someone is promising you consistent above-market returns it's either a scam or there is unknown or undisclosed risk" it might be true that you don't understand DeFi to some degree. DeFi isn't a single market, it's millions of micro markets that are accessible through what amounts to a single API.

So when you have millions of markets with different returns that can be traded in every imaginable way (and some you probably haven't imagined), throw in an insane amount of dumb money, people willing to borrow at high interest rates (relative to the real world), and a laundry list of factors that introduce inefficiencies into the market, it's quite easy to find pockets of above-average returns if you're smart. I have no idea if Stablegains was actually smart, but it's more than possible to achieve above-market gains in DeFi without exposing yourself to outsized risks.

>>downan+vl
> it's quite easy to find pockets of above-average returns if you're smart…

Right, but even then how deep are those pockets (what amount of investment can they absorb without being tapped out), how big a time window will they exist for, how will you know if those limits are being reached, and are you really sure you can quantify all the risks?

By definition if it’s a pocket of opportunity, it’s very constrained opportunity. As soon as those constraints are breached it will suddenly stop being low risk and might collapse completely. A lot of people have lost a lot of money on sure fire pockets of opportunity that were great when they lasted.

>>simonh+2n
Of course there are limits to every opportunity. I make money everyday from opportunities that exist on microsecond timescales. I run arb and loan liquidation bots, so I haven't had a single losing day, ever. The last two weeks were quite profitable for me, actually the best two week period I have ever had. There are other strategies that are easier to pull off, such as market making, that have moderate risks and outsized returns.

The point is that these opportunities exist, and they always will exist, you just have to be smart enough to be able to get into them. If someone needed money for infrastructure to run an arb bot, for example, and offered you above market, risk-free returns, it's at least possible they aren't lying to you. That was my point.