The interest rates for lending stable-coins on some of these platforms can be extremely high...I'm old enough to know that with returns like this there has to be a catch :) I'm trying to understand what risks of being a lender are. I'm specifically looking lending via fulcrum (which may or may not be relevant). As far as I can understand it:
- I don't have counterparty risk in the way I would if I deposited on an exchange and made some capital available to margin traders. The counterparty is the Ethereum network.
- There is no leverage involved so I cannot be liquidated...?
- For stable-coins, as long as I believe in the peg there is no exchange rate risk.
I understand that the contract itself can be attacked and my capital could potentially be drained that way. What are the other risks involved with DeFi lending that I'm overlooking?