Right now, the best interest rate you can get with a traditional bank tops out somewhere around the 1% p.a. mark – in what the big banks still laughably call a “high interest” savings account.
This widespread shortage of interest-bearing savings products has left a pretty substantial gap in the market – a gap that a new wave of crypto-savvy fintech companies like Block Earner, are rushing to fill.
Block Earner is an Australian fintech startup that harnesses the power of Decentralized Finance (DeFi) to offer Aussies a minimum 7% interest rate on their savings. For most people that don’t have a vested interest in cryptocurrency, navigating the technical world of DeFi isn’t exactly the easiest thing to do.
That’s why the team at Block Earner wanted to streamline that process and create a product that allowed everyday users to deposit regular Australian Dollars onto their platform and take care of the complex lending process in the background.
In an interview with DMARGE, Jordan Momtazi, the co-founder of Block Earner, said that Australia’s current economic climate makes products that offer even the smallest of yields on savings attractive, especially when it’s literally impossible to get the same returns in the world of traditional finance.
Comparing the difference between interest rates in traditional finance and DeFi, Momtazi said: “The best returns Australians can get from a traditional savings account ranges from 0.1-0.3% – compare that to a stable 7% product like Block Earner, it’s easy to see where people are going to end up.”
Momtazi added that Block Earner was designed to take the “heavy lifting” out of accessing the benefits of cryptocurrency, so that anyone can grow their savings over time.
While Momtazi promises that investors will receive a guaranteed 7% return until July of this year, he added that Block Earner’s variable interest rate product could see new users receive up to 18% p.a. returns on their savings.
While Block Earner is one of the first fintech companies in the world to offer mainstream, direct access to the world of DeFi, other crypto-based companies are also expanding their horizons when it comes to offering Australians higher interest rates.
Earn offers Australian and New Zealand residents the ability to earn interest on 21 different digital assets, including large-cap cryptocurrencies such as Bitcoin (BTC) and Ether (ETH) as well as stablecoins like Tether (USDT) and USD Coin (USDC).
Swyftx CEO Ryan Parsons said that the exchange’s Earn feature was one of the most competitive in the crypto industry, offering investors flexible, zero-fee yields of up to 6.7% on stablecoin deposits.
“Very few global exchanges are offering crypto users the level of interest rates that we are without also having lock-in periods.”
“You’ll start to see many more Aussies using crypto wealth services as they become more familiar with digital assets,” Parsons added.
Swyftx states that the amount of interest that can be offered to investors depends on the volatility of the underlying asset. Large-cap crypto assets like BTC and ETH will offer interest rates of up to 5.1%, while riskier assets like Polkadot (DOT) can offer returns of up to 12.7%
It goes without saying, but lending crypto to earn yields does carry some risk, but Swyftx is fully insured against any potential losses, meaning that investors’ funds are always safe.
If you currently own cryptocurrency that’s just sitting there, putting them into a yield-bearing account can be a great way to get your digital assets making gains while you sleep.
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