VOA慢速英语--繁荣还是萧条?加密贷款的疯狂世界

Boom or Bust¹? The Wild World of Crypto Lending

It sounds like a bet you cannot lose. You lend money to a borrower who provides collateral² of higher value than the loan, and then you earn interest of about 20 percent. What could possibly go wrong?

That is the idea behind "DeFi," or decentralized finance. These are cryptocurrency platforms that let one person, a lender, deal directly with another, a borrower, without involving banks.

DeFi has grown a lot during the COVID-19 health crisis.

Loans on such platforms have risen more than 600 percent since March to $3.7 billion, says DeFi Pulse, an industry website. It says investors³ are seeking higher returns since central banks have cut interest rates to support economies hurt by the COVID-19 coronavirus.

The DeFi platforms operate on free code services. They use information systems that process interest rates in real-time based on supply and demand. Some industry experts say the ease and effectiveness of these platforms are the future of borrowing and lending.

But others warn that DeFi operations carry high risks.

Lawyers and observers say the websites can have weak security that leaves them open to computer system problems and attacks. They also say most platforms are untested and operate without any governmental supervision⁴. As a result, they offer few if any legal protections to users.

In 2017, investors put billions of dollars into ICOs, or initial coin offerings, a way to buy cryptocurrency. Many crypto companies raised money by making new "virtual" coins. But most of the companies failed to get enough investors and those that did invest lost a lot of money.

"These are experiments in finance," said Preston Byrne of the law office Anderson Kill in New York. He added that most of the projects are not truly legal, but may become legal in the future.

However, DeFi continues to grow in popularity.

Seven years ago, Brice Berdah made plans to retire in his mid-30s through traditional investment methods. He knew he would need to save 1.7 million euros.

"My plan was to make 5 percent on my capital," he said.

But low interest rates do not permit such a rate of return.

"By 27, I had only saved only about 0.5 percent of the required amount," said Berdah. He works at a new company that makes online storage centers for digital coins. "It was an obvious failure."

To restore his dream Berdah has turned to DeFi. He has changed his retirement⁵ plans again.

Berdah has bet 90 percent of his money on DeFi. "Returns are about 20-25 percent over the last six months ... and I'm on track just now," he said.

DeFi is rooted in an industry hostile to traditional financing. But some of DeFi's aims, like lower business costs, have caught the attention of traditional financing companies.

For their part, major banks are looking at how the new technologies can be used with traditional finance processes. Goldman Sachs, for example, appointed a new chief of digital assets to look at how it can exist on blockchain technology, a spokesman said earlier this year.

There is "an actual value" on what is being built on these websites, said Maya Zehavi. She is a blockchain expert and board member of an Israeli blockchain industry group.

Most DeFi platforms are based on the ethereum blockchain. It is the second largest cryptocurrency after bitcoin.

Loans are recorded, the money is released and controlled by contracts. Borrowers must often sign collateral, also in cryptocurrency, usually worth more than the loans they take out.

DeFi is not for those easily frightened.

One such borrower is Antoine Mouran, a computer science student at university in Lausanne, Switzerland.

"My portfolio⁶ is a couple of thousand dollars," the 18-year-old told Reuters news agency. She added "I trade for fun, to discover new technologies, such as decentralized finance."

I'm Susan Shand.

Words In This Story

collateral - n. the security for a loan

cryptocurrency - n. money that exists only on the internet

platform - n. a website, twitter or another specific site on the internet

code - n. the organization of the information of ones and zeroes that make up the software that controls the development of websites and other content

virtual - adj. not real, existing on the internet only

capital – n. the money one has to invest

digital – n. made up of ones and zeroes on the internet

blockchain – n. a technology that protects money by combining thousands of websites

ethereum - adj. a specific type of cryptocurrency

portfolio – n. the list of places where one invests one's money

1 bust   

vt.打破；vi.爆裂；n.半身像；胸部

参考例句：

• I dropped my camera on the pavement and bust it. 我把照相机掉在人行道上摔坏了。
• She has worked up a lump of clay into a bust.她把一块黏土精心制作成一个半身像。

2 collateral   

adj.平行的；旁系的；n.担保品

参考例句：

• Many people use personal assets as collateral for small business loans.很多人把个人财产用作小额商业贷款的抵押品。
• Most people here cannot borrow from banks because they lack collateral.由于拿不出东西作为抵押，这里大部分人无法从银行贷款。

3 investors   

n.投资者，出资者( investor的名词复数 )

参考例句：

• a con man who bilked investors out of millions of dollars 诈取投资者几百万元的骗子
• a cash bonanza for investors 投资者的赚钱机会

4 supervision   

n.监督，管理

参考例句：

• The work was done under my supervision.这项工作是在我的监督之下完成的。
• The old man's will was executed under the personal supervision of the lawyer.老人的遗嘱是在律师的亲自监督下执行的。

5 retirement   

n.退休，退职

参考例句：

• She wanted to enjoy her retirement without being beset by financial worries.她想享受退休生活而不必为金钱担忧。
• I have to put everything away for my retirement.我必须把一切都积蓄起来以便退休后用。

6 portfolio   

n.公事包；文件夹；大臣及部长职位

参考例句：

• He remembered her because she was carrying a large portfolio.他因为她带着一个大公文包而记住了她。
• He resigned his portfolio.他辞去了大臣职务。