Why is Metapool Able to Offer a Higher APY?
Before we answer the question, we need to know first what happens in the traditional banking system. You see, the traditional banks, like BPI, BDO, East West, and the rest, have what they call overhead expenses.
What are these expenses? Well, if you have been to a bank, you see it has its own office building. If the bank is renting the space, it has to pay the monthly rent. If it owns the land, then it must have spent a lot to construct the building.
Next, the employees. One branch can have at least 8 to 10 staff. Unless those people work there for free, they have to get paid. Then you have the office fixtures such as tables, counters, and cabinets. All those require maintenance.
Don’t forget about the computers, the hardware, and all equipment required to operate the branch. What about the utility? Well, a bank has to have electricity, water, and Internet.
On top of the hardware, you have the software. Each bank may have its own proprietary software that suits the need of the bank itself. Do you think that’s free?
Do you see the point of having to pay for overhead expenses in operating a bank branch. And that is just one bank branch of the hundreds if not thousands of outlets around the country.
With Metapool, it’s just smart contracts deployed on the NEAR Protocol blockchain. All those operating expenses that the traditional banks have to pay means almost zero for Metapool to maintain its operation.
That is why Metapool offers a higher APY.