You are viewing a single comment's thread from:
RE: Proof Bitconnect's Bot it Going Broke!
I agree moeter. It is the compound interest that is key.The interest on interest is what will blow out. Just depends if people keep investing and bitconnect survives long enough ;)
Holding the coin also gives you compound interest. See the calculationgs in the comment I made to Moeter and you can see that over most time periods the token did typically outperfrom the lending.
Charlestines.com is correct. Since the loans are pegged at the initial loan amount in $USD for the term, the lender is paid a percent of the initial dollar value. The staker is paid a percent of BCC. So since if you loaned over $10,000 it would take 120 days for a ROC, the BCC price 120 days ago was about $50 (early July), so $10,000 would be 182 BCC tokens. 120 days later ( early Novemeber) the price of BCC is about $250, so to "return" the lender's capital Bitconnect would pay the user about 40 BCC ($10,000/250{$/BCC}). What happened to the other 142 BCC? The staker would've taken $10,000 worth of BCC in July, which would have been 182BCC. Fast forward 120 days, and they would have a BCC wallet with 182 BCC of principal. So assuming compounding (ignoring the $100 minimum) the lender would total $ 34,000 (($10,000 x 1.0125^120)-1) of interest, wheras the staker has made $14,500 (58BCC x $250{Nov. Price};58BCC = 182 BCC *(.08+.08+.08+.08{monthly stake interest})).
However, the lender's total is $44,000 ($10,000 principal + $34,000 interest), whereas the staker has $60,000( $250 * 182BCC principal + $250 * 58BCC interest). This even ignores the compounding of staking interest ((1.08^4)-1)
TL;DR take away over the last 4 months a staker would have $60,000 whereas a lender would have only $44,000 starting with the same $10,000 initial amount.