[rlucas]

Just ask yourself, what productive use of USD reliably yields 8.88% plus a spread for the intermediary? (For regulated boring banks, net interest margin historically is around 3%.)

Banks doing C&I lending to modest risk (but still not "rated bond issuer") companies are charging mid-single-digit rates. Those banks are generally paying depositors way under 1%.

There do exist loan portfolios legitimately producing these kind of yields, but they are not trivial to produce. Actively managed and monitored specialized portfolios -- where you would really want to diligence the track record and underwriting/origination methodology of the lender.

Don't get me wrong: dislocations do happen and arbitrages do open up, sometimes for far longer than you might think. But fundamentally, if this is non-Ponzi finance, someone must be using those funds for a productive enterprise that yields enough to cover the cost of capital. What is that in stablecoin lending??

(Source: I am an investor and former operator in specialty lending company, having sourced/raised capital in > 100 debt and equity deals.)