Probably this is a very dumb question and can be answered with A-Income coming from somewhere else or with B- It’s not sustainable. The question is what’s the strategy of some lending protocols like for instance Solend to provide lower borrowing rates than the lending rates. I understand that things like this allow to create these infinity loops that provide higher APY , but i don’t know how they can afford that or if it’s something that ultimately will end up making them go into a “bankruptcy”.
On the other hand, other plataforms like AAVE (Which i know is the safest and one of the oldest) have some more reasonable rates.. quite low but logical , higher borrowing rates to pay to the lenders and make a profit..
So, what’s the catch and is possible to have a sustainable plataform without the “right” rates. If so, how?