If I may bring this to your attention, Celsius wallet is now offering a better APY to stake my AAVE (7.5% versus 6.14%). Can we start a conversation about increasing Total Emissions per day to match this? Otherwise, stakers will be incentivized to move their funds to Celsius. Let me know what you all think. Thank you.
Can see it as a premium for the risk of entrusting centralised entity with your funds :)
That’s a very good point. But I should add that Celsius is insured, albeit centralized, so any lost funds will be recovered. Additionally, staking with AAVE is subject to the rare event of a 30% slash, which is why the Total Emissions originally increased from 400 to 550 AAVE/day. But I further posit it would be best to increase >550 and at least match Celsius’ 7.5% so that users are not incentivized to withdraw funds to chase higher (and dare I say safer) yield with Celsius. Thoughts?
TLDR; Celsius is centralized but insured, therefore not subject to a 30% slash. Total emissions of AAVE/day should increase to at least match Celsius’ 7.5% APY.
Insured is a meme. They insure their cold wallet fund but most of the fund are lent to counterparty which are not insured.
I do use Celsius and Nexo, to a relatively small extent, as they offer some useful features. I never took there claims about insurance at face value though. It will take a few actual precedents before I’m convinced it’s not empty marketing.
Same goes for “regulated and compliant”.
Hmm. It’s demand and supply that determines the rates. Even if the daily emission was reduced to 300 aave a day, people will pull out funds until the yield is worth the risk, which is around 6% as per the market.
I see, that makes sense. Thanks for clearing that up.