It was possible in a market neutral way in crypto and without much risk for a while.
You could provide liquidity for stablecoin swaps, collect the shitcoin rewards and regularly dump them. Withdraw at anytime.
Of course, in that scenario you had good control and the counterparty can't rug you because you could verify what was going on. There was some technical risk, but it never actually occurred.
It was because interest rates were zero, largely, that this was possible.
The mistake here was giving the assets to another party who can do whatever they like and where you can't see directly what they were doing.
Just because people got lucky for a while doesn't mean that risk was actually ever low. The reality is that risk on those trades was always extremely high, but it wasn't apparent through traditional risk metrics such as volatility or credit ratings. And there are more risks to worry about than just market risk and counterparty risk.
These statements are a bit at odds. "But it never actually occurred" is a statement of chance, not risk. I also suspect you are downplaying significant systemic risk. "Withdraw at anytime" could go away quite easily in several scenarios.
You could provide liquidity for stablecoin swaps, collect the shitcoin rewards and regularly dump them. Withdraw at anytime.
Of course, in that scenario you had good control and the counterparty can't rug you because you could verify what was going on. There was some technical risk, but it never actually occurred.
It was because interest rates were zero, largely, that this was possible.
The mistake here was giving the assets to another party who can do whatever they like and where you can't see directly what they were doing.
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