It comes from shorts who borrowed the BitAsset into existence and it comes from transaction fees on that asset.
I still find this explanation of interest confusing, and I doubt its helpful for beginners.
I prefer this simpler explanation: shorts are super bullish on BTS, so they are willing to pay interest to whoever takes the opposite side of their trade, which bribes/incentives them not to dump their shares.
Thank you for replying.
So, primarily its from Shorts and some transaction fees. How high are these fees associated with Bitshares? Fractions i would assume.
The bitUSD transaction fee was about half a cent, last time I checked.
In the long run, the lion's share of interest will probably come from the interest paid by shorts. Source: my intuition.
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