Midas Set To Outlast CeFi Crypto Lending Services — Proving Midas To Have The Better Business Model
Midas Proves To Have The Stronger Business Model As Crypto Lending Services Face Liquidity Crisis Brought On By Epic Mismanagement
I remember a time when I wrote my first review of Midas.Investments. People were, at the time, “spooked” by the high interest rates that Midas offered… so much so that many were quick to label the crypto CeDeFi asset management firm nothing more than a scam.
Well, it turns out it wasn’t a scam and the real scams were crypto lending services like Celsius and Voyager that labelled themselves as “safe” and “risk-free” when they were anything but.
Midas was in a privileged position from the outset as, unlike Celsius, it had made no investments in UST and Terra’s Anchor protocol. Furthermore, as it’s not a lending platform, it hasn’t lent anyone money — never mind the fraudulent Three Arrow Capital.
In fact, upon the collapse of UST, Midas’ team took further preventative measures and moved away from Tether’s USDT (in favour of USDC).
Moreover, Midas only have around $200M of assets under management, which is a relatively small amount (compared to Celsius, Voyager etc). This allows it to maximise yield for investors, while maintaining a low to moderate risk profile in the current bear market.
CeFi Crypto Lending Platforms Were Destined To Fail From The Start
However, perhaps the most important element in Midas’ success and why it’s continuing to survive while it’s competitors fail is that it is not a crypto lending service. Why?
CeFi lending services, like Celsius, must operate a highly illiquid business model if they are to generate reasonable yield for their depositors/investors. This is particularly the case if there are significantly more people depositing crypto and other stablecoins than those borrowing them.
The only environment where the CeFi crypto lending business model can operate is one where interest rates are high, demand is strong, and supply is limited.
— if not, then companies like Celsius and Voyager will have to make “risky bets” to continue paying off their investors semi-reasonable interest rates.
Why Choose DeFi?
Midas, on the other hand, has a different model where yield is generated through low-risk liquidity protocols like Convex pools — along with CeFi and DeFi algorithmic strategies.
Though Midas has reduced interest rates over the past few months, they still remain industry leading as Midas continues to offer:
Up to 14.5% on Stablecoins
Up to 9.4% on Bitcoin
Up to 10.6% on Ethereum
Moreover, interest is earned and compounds daily and there are no lock-in periods.
In my opinion, Midas remains the best option for investors looking for a home for their crypto and has proved to have a stronger business model that CeFi crypto lending services.
Gather round and lick the balls of Midas.