Exactly

Cryptocurrency, ‘decentralized finance,’ and the sweet promise of 8% interest

Good morning. The U.S. economy may be going gangbusters, but for those looking for a return on their savings, the picture is less pretty: Even so-called high yield savings accounts offer a pittance in interest—Goldman Sachs’ Marcus product, for instance, currently offers a measly 1.7%.



Those higher interest rates are possible, DeFi boosters say, because there is no bank or other middleman to profit off consumer deposits. Instead, the system relies on pairing individual borrowers and lenders who rely on automated “smart contracts” to administer loans and pay out interest.

For the mathematicians out there, the shadow bank operates on the lowest rung of the Markov Tree. They are up against central bankers who do not understand the triple entry accounting needed to operate a rung or two up the tree.

In this condition, the no arbitrage condition cam be maintained, automatically, via algorithm. They really just solve the hyperbolic dynamic conditions, with fractional approximation on a necessary basis needed to stay under error bound.

As an automated bank, the ad revenue is going o skyrocket, you are the new google. The bank carries market making risk but that is now a controlled, small number.

There is absolutely no reason Bitcoins cannot have their own S%L, and the run cost always stepwise limited to about an eight of price variation.

This is, at bottom, a congestion management problem, constricted flow.

In fact, I suspect the same theories are behind the proof of turbulent flow conditions, just recently announce, the same principle of gravity as an emergent property, the hologram effect, makes the money velocity equations work.

Central banks can operate a triple entry accounting system, hire an abstract algebra girl. Buty the main issue is to make the siegniorage tax betable. That makes the partial and occasional default priceable, removes the cycles, lets you balance the generational an seigniorage cycle so they balance each other.   We cannot wait for an insider committee to suddenly set those fees. You still meet all your boundary conditions, but the opportunies to fake it are gone, we just live in partial rage.