How to earn high interest from crypto stablecoins

Chad | Gen Zero Crypto
4 min readJun 28, 2021

You can currently earn upwards of 8% Annual Percentage Yield (APY) on stablecoins like $USDC if you hold your money in the right place. This is why you should consider doing so…

The inflation narrative:

Most major economies are experiencing historically low interest rates. Today’s term deposits are earning you ~0.2–1.0% p.a. on your money. 2021’s inflation rate set to be 1.73% in Australia, so your savings will be worth less due to your purchasing power getting weaker. Assuming interest rates stay the same, this inflation will compound year-on-year, devaluing your savings each year for the next 5 years in the current economic climate.

What is a stablecoin?

A stablecoin is a cryptocurrency where the price of the asset is pegged to another cryptocurrency, fiat money, or an exchange-traded commodity. Tether is possibly the most well-known and notorious of all stablecoins (but I won’t be getting into that). Depending on the asset it’s pegged to, 1 unit issuance of that stablecoin will always be worth 1 unit of what it’s pegged to. Take Tether ($USDT) as an example. Tethered to the USD, 1 Tether aims to always be worth 1 USD.

Where to earn interest on your stable coins:

Currently you can earn anywhere from 8–20% p.a. on certain stablecoins if you know where to go and how to do it. Some examples of places you can get a reliable yield on your stablecoins include:

Celsius:

Variable interest rate

Interest rate — 8.88% APY

Stablecoin — USD Coin ($USDC)

Payout frequency — Compounded weekly (Received every Monday)

Interest Bonus — Earn a 2.33% interest bonus if you opt to receive your interest payments in $CEL

Difficulty — Easy

Insurance — Celsius is building a self-insurance feature to protect you from counter party risk.

Referral link — Sign up using this link to receive $40 worth of $BTC when you make a deposit of $400 and maintain that balance for 30 days.

Nexo:

Variable interest rate

Interest rate — Starts at 8% APY increases based on your tier in Nexo’s Loyalty Program

Stablecoin — USD Coin ($USDC)

Payout frequency — Compounded Daily

Interest Bonus — Earn a 2% interest bonus if you opt to receive your interest payments in $NEXO

Difficulty — Easy

BlockFi:

Variable interest rate — based on monthly compounding. Actual yield will vary based on account activity and compliance with BlockFi’s terms and conditions

Interest rate — 8.6% APY

Stablecoin — USD Coin ($USDC)

Payout frequency — Compounded Monthly (Received on the first of every month)

Difficulty — Easy

Anchor:

Fixed interest rate

Interest rate — 19.49% APY

Stablecoin — TerraUSD ($UST)

Difficulty — Moderate

Aubit:

*COMING SOON*

Interest rate — 43% APY

Stablecoin — USD Coin ($USDC)

Conditions Apply — You need to hold an additional 25% of your total stablecoin value in Freeway Token ($FWT) to activate your supercharger

E.g. $1,000 USDC in a Supercharger = $250 worth of $FWT

Some of the risks and how to mitigate them:

You should know that using these platforms carries risk. You could lose all your money so it’s best to protect yourself. Some of these platforms may be exposed to counter party risk. To minimise these risks I will be taking out insurance and spreading my stablecoins across multiple platforms, so if one were to go down, I’ll only be at risk of losing some/all of the money I have tied up in that one location.

My investment strategy:

When the bear market ensues I’ll be taking profits by converting my crypto assets into stablecoins like USDC and putting them in a number of the places listed above. I’ll diversify on multiple platforms to reduce my exposure and take out insurance on my capital. When I believe the market has bottomed, I’ll accumulate $FWT up to the value of 25% of my total stable coin value so I can get access to those juicy 43% APY yields.

Any excess interest will be used to accumulate more cryptocurrency assets after the market looks to have bottomed, making sure to dollar cost average (DCA).

➡️ Feel free to follow me on my other socials for interesting crypto projects I’m investing into and to stay up to date on my strategies: linktr.ee/Chad2P0 🐦📸🎧📝

Disclaimer: This blog post was inspired by my own opinions, observations and experiences. I am not a licensed financial advisor and this is not financial advice. You should not buy, sell, or invest in any asset based on what I say. You should know that investing carries extreme risks. You could lose your entire investment. This is not trading advice and I am in no way liable for any losses incurred. Always do your own research.

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Chad | Gen Zero Crypto

Hey! I'm Chad. A 29 year old that's passionate about investing and helping others around me. I wish to share my quest for entrepreneurship with you here.