Consider that you invest in the total return of a stock, ROI plus market volatility, as a time series over the last year. You see that it earns the one year rate, as long as you keep a cash balance equal to 30% of its regular gains, then you typically have enough cash to cover the bottoms and return cash at the tops.
You are doing a synthetic put. Instead of buying and selling the stock itself, you are keeping holdings constant, and varying the amount of cash on hand.
In sandbox there is no real safe rate, the core no-arb S&L is asynchronous, adaptable interest charges, directly matching depositors and borrowers, on demand with cash in advance.
The closest thing we have to 'rate; market is the term premium market, just go ahead and buy a chunk of 'interest payments' and assign them to the holder who have long cash floating. In buying a chunk of term premium, the trader is betting on volatility, the dangerous stuff. But sandbox don't care, let's try it out.
We have researchers working this angle, doing good work, I will get back to that. First let us understand the dangerous idea.
The holder of large cash deposits the cash for auction in the escrow net, with recall before timeout of five years, he becoe depositor.
Then the depositor sells term premium, interest charges at the local term premium pit. The depositor lets borrower use cash to hold off on recalling the deposit that it can be used. The buyer says, yea, I will buy the use of money for a certain time period.
Very dangerous because depositors and borrowers are not matched on an ad hoc basis directly in a two color pit, the depositor is making a time bet. Interest over time is always subject to hedging because time to completion remains inside information.
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