“Who said what? »Is a series of articles launched by Coin24 with the aim of interviewing French-speaking players in the world of cryptocurrency and blockchain to enlighten you on concepts or present you solutions or products related to this industry full of ‘to come up.
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Who is Thibaut Boutrou?
Thibaut Boutrou has been working in the cryptocurrency market since 2016 with several companies. He is one of the founding members of Just Mining and the current COO of the company. Just Mining is an investment platform registered as a PSAN with the AMF which offers Staking, Lending and Masternode solutions on the cryptocurrency market.
Just Mining offers a new lending offer with 9.5% interest (APR) on USDT, USDC and DAI stablecoins. Could you explain what lending is?
The decentralized finance sector or DeFi has really exploded lately with more and more concrete application cases. One of them is lending, which generates passive income on the tokens that an investor owns and is willing to lend to other market participants.
Lending is a person-to-person loan / borrowing mechanism through a smart contract or smart contract. In the world of cryptocurrencies, there are certain players who have liquidity needs (traders for example) and conversely, there are players who have available liquidity.
Lending will thus put the two parties in touch: the one who has available liquidity will be able to make it available to the network against remuneration – this is the lender, and the one who needs liquidity and who will borrow on the protocol by placing other cryptocurrencies as collateral to protect the lender – this is the borrower. The interest rate fluctuates depending on the supply and demand on the protocols.
Do you think lending will democratize decentralized finance?
It is in any case a good tool. However, I think that the democratization of DeFi will go more through education and the emergence of new, more accessible and intuitive solutions.
The potential of DeFi is well established. However, there is still a lot of work to be done on its accessibility. It is still a young world, but it is growing and improving day by day.
Should new customers turn to lending?
As Thibaut explains to me, lending is a process that can be done on different platforms such as Aave, Anchor, BlockFi, PancakeSwap or Compound Finance. Depending on the platform or protocol, the risks will not be the same. It is therefore necessary to monitor all the characteristics to make the right decision and minimize the risks.
At present, the use of decentralized finance protocols is difficult to grasp without a minimum of knowledge, often acquired after several in-depth research, trial and error and risk taking. Their accessibility requires understanding and mastering several tools.
This is why it is important to look for a solution that makes this process easier for beginners who are interested in lending to enjoy a passive return on the tokens they hold.
The goal of our solution is to make lending accessible via an offer that does not require any technical skills for our customers. To answer more directly, of course, I encourage readers, beginners or informed, to take an interest in this type of mechanism because there are certain opportunities, but it is also necessary to understand the associated risks.
What are the risks associated with investing in DeFi?
As with any investment, investing in the world of DeFi comes with risks that are important to understand before investing. Beyond understanding them, you need to be sure that this level of risk fits well with your risk tolerance and your investor / trader profile.
The first risk lies in the choice of the platform. Then, as explained previously, depending on the platform, the characteristics and the risks are not quite the same.
To speak more generally, there is a significant risk for humans. As I mentioned, many protocols are still difficult to access and the slightest error can have irremediable consequences. It is necessary for novices to be vigilant at this level.
Then, you have to keep in mind that the protocols themselves present risks. They do not all have the same level of security and are not necessarily analyzed or audited. The risk of hacking is inherent in smart contract platforms and in the world of crypto-currencies in general.
Finally, we can cite the risk linked to the volatility of certain assets, the risk of capital loss and some rarer and more technical underlying risks.
The risk of volatility is limited on the Just Mining lending offer because our offer is for stablecoins and the stablecoins are backed by a legal tender currency, often the US dollar.
Does the intensification of lending offers mean that mining or staking is outdated?
As Thibault explains to me, lending is completely different from mining, associated with proof-of-work or proof-of-work blockchains, or staking, associated with proof-of-stake or proof-of-stake type networks. To learn more about mining, see our guide How to mine cryptocurrencies?
You should not mix everything up, because these are totally different offers that do not have the same objectives.
Lending is booming, yet the demand for mining and staking machines has never been greater. There is no correlation or direct competition between these types of investments. On the contrary, they are complementary offers. Staking and mining work in the structure of the blockchain, while the Challenge takes advantage of the technical evolution offered by blockchain technology for disruptive financial products such as lending.
We can possibly reconcile staking and lending because the investment logic is relatively similar: we immobilize a quantity X of cryptocurrencies against remuneration in said cryptocurrency. But the technical operation and the associated risks are not the same.
Lending will make it possible to generate passive income on stablecoins, it is a good alternative for investors who do not wish to be exposed to the volatility of cryptocurrencies, but also in times of “bear market” [baisse des marchés].
Reverse staking exposes the user to a cryptocurrency and thus allows capitalization in the event of a bull market, but makes the portfolio more vulnerable in a bear market.
As for mining, it is now mainly aimed at professionals, aiming for long-term diversification. It’s a totally different product.
Who Said What? With Thibaut Boutrou – The final word
Finally, I would like to point out that Just Mining is now a company registered with the AMF (Autorité des Marchés Financiers) as PSAN (digital asset service provider) for the activities of custody of digital assets, buying and selling digital assets for legal tender and exchanging digital assets for other digital assets.
I then ask Thibault what this changes for the activities of Just Mining and if new projects are planned for this fall.
Our market is evolving, regulation and systems like the PSAN are proof of this. There are two ways of looking at it. We can highlight the negative points: less agility, more process… but this also allows the ecosystem to structure and become more professional.
The challenge is to find this balance between maintaining the agility necessary to exist in an environment that is going as fast as ours while complying with the requirements of the regulator.
Lots of new projects to come, new features, new products, new partnerships… we have a busy schedule!
Thanks to Thibaut Boutrou for explaining to us what lending is and what are its risks and benefits!
Risk Disclosure: The articles and articles on Arover.net do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies.