My understanding is that the bond market is highly efficient and there is no free lunch. An interest bearing security yielding 8% is a junk bond in today's territory because risk free rate is 0%, and stable corp bonds like Apples are like 1%. 8% is like the price of Argentinian bonds, meaning there is a relatively high chance of default to incentivize capital there compared to the safe 0-1%.
Default meaning, the Gemini coin will be worthless when you try to withdraw. You could try to ride 8% junk bonds for 3-24 months too.
Yes definitely it could be because of risk. There is also a risk that the GUSD isn't returned (with Gemini it's not actually defi, there is no smart contract mandating its return, there is counterparty risk). I'm not saying it's 8% risk free when the risk free rate is 0%. But the article indicates that there is an actual inefficiency here due to institutional restrictions on cryptocurrencies and an institutional demand for products that approximate them.
Default meaning, the Gemini coin will be worthless when you try to withdraw. You could try to ride 8% junk bonds for 3-24 months too.