Hello everyone, this is Eric with CryptoCoin News and in this video we’re going to be talking about the dangers of the FTX deal with BlockFi.
In case you’re not familiar, BlockFi is a cryptocurrency lending and borrowing platform. They recently announced a new partnership with FTX, a cryptocurrency derivatives exchange. Under this deal, FTX will issue up to $100 million worth of BlockFi’s token (GUSD) to its customers.
The deal looks great on the surface, but there are a few risks that we should consider before jumping in. Firstly, the deal is not backed by any real assets. FTX is essentially just giving away free tokens to its customers, which may not have any real value in the long run.
Secondly, the deal could lead to excessive speculation and manipulation of the GUSD token. With the influx of new tokens, traders may try to manipulate the market and drive up prices. This could lead to a bubble that could crash and cause losses for investors.
Finally, the deal could lead to over-issuance of the GUSD token. If too many tokens are issued, it could lead to inflation and devaluation of the token.
So, while the FTX deal with BlockFi looks great on the surface, it is important to be aware of the risks involved. We should always do our own research and understand the risks before investing. Thanks for watching!
