Much has been said about
attractive interest rates offered by popular crypto lending platforms
like BlockFi, Celsius Network and Nexo. However, there are two sides to
every coin. Paying out high interest rates requires charging even higher
rates to the borrowers. 

Yet, Nexo co-founder Antoni Trenchev
disagrees that crypto lending rates are high. In an interview with
Cointelegraph, he said that this reflects the “Western” view, where the
prevailing interest rates tend to be low. But it is not the case in the
developing world, he said:

“But for people in Third World
countries or even emerging markets, such as Asia, we get as low as
5.99% APY. So this is still very, very low, no matter how you compare it
with the traditional financial sector. And the reason why it is like
that is that it again has to do with the risk of the underlying assets
and the collateral and the fact that we do not do credit checks on you.”

Everything
is relative. Although the rates offered by the lending platforms may
look relatively high when compared to bank savings accounts or even
money market instruments, they pale in comparison to the yields offered
by DeFi projects. When asked if he views DeFi projects as competition,
Trenchev said Nexo does not see DeFi as direct competition. He said that
though he likes the concept of DeFi, having a traditional finance
background, he finds the space too risky for his personal taste. He has
not participated in any yield farming either. He added:

“In
order for it to be decentralized, it has to be all on blockchain and
not fiat related. Right now, Nexo is positioned as a bridge between
traditional financial markets and the crypto space. And we just see
ourselves doing something slightly different.”

But does
this mean most of Nexo's borrowers come from the developing world? 
Trenchev did not have precise numbers at his disposal but noticed that
they typically see an influx in demand from countries that have
experienced inflationary pressure like Turkey.

source link :  https://cointelegraph.com/news/crypto-lending-rates-are-low-and-defi-is-not-competition-says-nexo-co-founder