Agreed! I do hold it all in my earning account and if borrowers skip town, then I lose.
I treat it as a low risk/low reward in my portfolio. Coincidentally, my "earnings" I pulled out recently was almost the exact opposite amount of current inflation so it's like a hedge against inflation.
If you're holding it on Gemini Earn, I highly recommend withdrawing, even if only for the next few months.
Gemini Earn deposits into Genesis Trading, and they have admitted to having direct exposure to FTX ($175M [0]). While they can likely weather that loss, I have concerns about other indirect exposure they may have in the coming weeks. I don't think we've seen the end of the FTX story.
If I were you, I'd take the money out yesterday, and hold it in either US Treasuries (6 month pays 4.45%), or put it into a liquid money market while this all blows over. The extra couple of percentage points you'll earn does not at all seem worth the elevated risk right now.
I treat it as a low risk/low reward in my portfolio. Coincidentally, my "earnings" I pulled out recently was almost the exact opposite amount of current inflation so it's like a hedge against inflation.