Potential LP: I have a 15% hurdle rate


Me: That’s about what a bond for Zambia yields. Seems high.
LP: Fine. 13% because I always enjoy your tweets.
Me: So you’re saying that LPing into this overcollateralized vault with instant liquidations is as risky as holding a Pakistani bond?
LP: You’re busting my balls here! 12% is best I can do. And I keep any interest earned.
Me: My own credit card is only 11.5%…
LP: Yes, and an unsecured loan to you is safer than LPing into an overcollateralized vault with instant liquidations!
Me: …
LP: …
Me: Are you serious?
LP: Absolutely. Everyone knows you’re not a degen.
Me: …can you lend me $10m, then?
LP: …
Me: …
LP: I was not actually serious. My hurdle rate is 20%.
People in crypto often have a really weird sense of pricing risk, I think.
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