It was revealed that Tether, a "traditional" stablecoin, had lent billions of dollars to other crypto companies, with BTC as collateral, and one of them is Celsius Network. Tether says these loans are low-risk because borrowers have to put up BTC worth more than what they borrow.
Why this is important:
Some people in crypto want volatile assets because they are gamblers. Others want no risk, which can be achieved through stablecoins.
There is another way to get stable crypto, which is typically the "main move" in normal finance (which is basically what Tether is doing):
Get a bunch of BTCs and slice them into junior and senior claims.
Sell the junior claims to people who want levered BTCs (the gamblers).
Sell the senior claims as stablecoins.
There are pros and cons of this method over the traditional stablecoins:
Pro: There is no nexus between this stablecoin and the traditional financial system, so regulators can’t shut down its access to banks because it doesn’t rely on banks.
Con: BTC is unpredictable, and if it goes to 0, this method would completely fail.
Real estate lender Walker & Dunlop became the first company to shift away from Libor, announcing a US leveraged loan sale that fully embraces regulators' preferred replacement for the London interbank offered rate, which will be benchmarked on the SOFR.
There's a small problem: SOFR is a bit lower than Libor, so you need to add basis points to make the pricing correct, or else it could confuse investors.
E.g., L+225 is the same price as SOFR+235.
This is a problem right now because most loans are still indexed to LIBOR.
Jacob Claerhour, the founder of Visionrare, has built a crypto marketplace where users spend real money buying fake shares, in NFT form, of real startups.
A big problem in finance is that many can't buy shares of private companies/startups because they are only for accredited investors and because there is just not enough stock for sale.
A potential solution is selling a derivative on the stock on the blockchain, which Claerhour is trying to do with Visionrare.