You’ve probably heard of Compound. They built compound.finance on Ethereum which allows you to lend and earn interest on your ETH, DAI, USDC, and several other ERC20s.
Today, the interest rate offered to DAI lenders is 10%, which is high enough to turn EthHeads’ heads (see cover photo).
As the CEO of SpankChain, it’s my job to manage the company reserves, which also includes nearly half a million DAI. At 10% annual interest, that’s ~$4,000 per month that we’re leaving on the table by not moving our DAI into Compound. That’s quite the opportunity cost. But the thing to remember when investing is that there is no free lunch. All investments have their risks and lending on Compound is no exception.