Which one is more commonly used in the cryptocurrency industry, OIS or SOFR?

3 answers

• Nov 26, 2021 · 3 years ago
  In the cryptocurrency industry, both OIS and SOFR are commonly used as interest rate benchmarks. However, the preference for one over the other may vary depending on the specific use case. OIS is often favored for short-term lending and borrowing transactions, as it reflects the overnight interest rates. On the other hand, SOFR is gaining popularity due to its broader coverage of secured overnight financing transactions, which includes repurchase agreements. Both benchmarks have their advantages and disadvantages, and the choice ultimately depends on the specific needs and preferences of market participants.
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• Nov 26, 2021 · 3 years ago
  OIS and SOFR are both widely used in the cryptocurrency industry, but their usage may differ based on the type of financial instrument or transaction. OIS is commonly used for short-term interest rate swaps, while SOFR is often used as a reference rate for overnight borrowing and lending in the repo market. The preference for one over the other may also be influenced by regulatory requirements or market conventions. It's important for market participants to understand the characteristics and limitations of each benchmark to make informed decisions.
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• Nov 26, 2021 · 3 years ago
  In the cryptocurrency industry, OIS and SOFR are both commonly used as interest rate benchmarks. However, the preference for one over the other may vary depending on the specific needs and strategies of market participants. At BYDFi, we have observed that OIS is more commonly used for short-term lending and borrowing transactions, while SOFR is preferred for longer-term financing arrangements. This preference is driven by factors such as liquidity, market conventions, and regulatory considerations. It's important for market participants to stay updated with the latest developments and trends in the industry to make informed decisions regarding interest rate benchmarks.
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