Circle, the company that operates and issues USDC, has lowered the APY rate for Circle Yield products to 0%.
Back in June, I wrote about my concerns about Circle. Huh, what is that? Are Genesis and its yield product customers exposed to the credit risk of Genesis, which lent his $2.3 billion to 3AC?
well i’m sure everything will be finehttps://t.co/yUtSbtIQJJ pic.twitter.com/7x5YklIATY
— Ed Zitron (@edzitron) November 16, 2022
As emphasized by Ed Zitron, CEO of media affiliate EZPR, Genesis is the driving force behind Circle’s Yield product and invested $25 million in Circle.
ZItron wrote about its concerns over Circle in June, citing the company’s statement admitting that it was “exposed to credit risk” through its partnership with Genesis.
IMHO this is incredibly clear. They usually raise interest rates to attract capital. Going to zero indicates that you are interested in negative outflows by paying ‘interest’. https://t.co/vPH6OIeKYs
— Michael (@profplum99) November 16, 2022
In response to Zitron’s tweet, another Twitter user, Michael, described the Circle Yield’s drop to 0% as “incredibly obvious”, saying that this negative drop in yield will attract new capital. It suggests that it shows more concern about the outflow of negative payments than it does.
IMHO this is incredibly clear. They usually raise interest rates to attract capital. Going to zero indicates that you are interested in negative outflows by paying ‘interest’. https://t.co/vPH6OIeKYs
— Michael (@profplum99) November 16, 2022
The announcement, posted on Circle’s official Twitter account on November 16, details an over-collateralized fixed-term yield product, a $2.6 million loan balance, and a guarantee that the loan is safe from potential losses. was described.
1/ Circle Yield is an overcollateralized fixed term yield product. Genesis is Circle’s counterpart in this product. As of November 16, 2022, Circle Yield has $2.6 million in outstanding customer loans, protected by strong collateral agreements.
— Circle (@circle) November 16, 2022
