Earning interest on stablecoins is a relatively new feature that most cryptocurrency lending platforms have just begun to offer. However, the mechanics involved are different for every Cryptocurrency borrowing and lending platform.
Usually, most crypto lending and borrowing platforms began by offering channels for users to deposit collaterals in exchange for crypto loans. Most of these crypto collaterals are cryptocurrencies that fluctuate in value. Although these provide great crypto loan opportunities, some investors are more attracted to low-risk investments that do not involve the crazy price volatility of cryptocurrency assets.
Due to this, CoinRabbit, a pioneer in the cryptocurrency loan space, has developed a feature that accommodates risk-averse investors. CoinRabbit offers opportunities for users to earn interest on stablecoins; this way, stablecoin owners can earn interest by depositing their coins at CoinRabbit and avoiding the imminent risks associated with holding other crypto assets.
CoinRabbit offers a secure platform for users to deposit various stablecoins such as USDC, USDT ERC-20, and USDT TRC-20. All three of these stablecoins are currently acceptable on the platform, and they both appreciate at the same rate. If you are looking to earn interest on stablecoins, you may want to look at CoinRabbit earn interest on the stablecoins page.
What are Stablecoins?
Bitcoin is the first cryptocurrency to be released to the market, and as such, several other projects followed suit. All the subsequent cryptocurrency projects after bitcoin have famously been labeled as Altcoins, shortened to Alts. Most Alts have quite similar characteristics to Bitcoin and Ethereum that are currently the top two cryptocurrencies by Market Capitalization.
However, most of these cryptocurrencies do not serve as currencies and are inherently incapable of being used as daily currencies like the US dollar. This necessitated the creation of a cryptocurrency that utilizes blockchain technology but has a stable price that can be relied upon.
This led to the creation of stablecoin, a cryptocurrency that has a fixed value and is more often backed by a reserve of assets. For Instance, today, we have several stablecoins from different companies, such as BUSD from Binance, USDTTRC20 from Tether but runs on the Tron network, USDTERC20 from Tether, and runs on the Ethereum network, USDC from Coinbase, and DAI, which MakerDAO regulates among others.
Notably, all these stablecoins have the same value; one USDT equals one US dollar, which applies to all the other stablecoins. The stability provided by these stablecoins facilitates easy trading on the crypto markets, offers security to crypto portfolios, and much more.
Initially, these stablecoins were not considered investments since the value of one USDT today will be the same even 20 years to come; therefore, they are not speculative assets that investors would buy and hold to benefit from their price increases.
At CoinRabbit, this is changing, and the platform is offering stablecoin holders to earn interest on their deposits and enjoy risk-free investments with lucrative returns.
When to consider deposits in Stablecoin?
Investors are often faced with a significant challenge commonly known as risk management. Here investors have to find a balance between the risks and returns. The higher the risk, the higher the return is a famous saying; however, every investor would easily pick the options with the highest returns if it were that simple.
Since risks are unforeseen occurrences that may or may not happen, it is often advisable to take calculated risks. Speculative cryptocurrency assets offer much higher returns over the long term; however, they also pose a significantly higher risk.
As a risk management technique, investors often strike a balance between high and low-risk investments in order to achieve a diversified portfolio with spread risks. Depositing stablecoins to earn interest is one of the low-risk avenues that one can take to profit. Down below are some reasons to learn how to earn interest on stablecoins.
If you don’t want to make high-risk trades
Crypto trading is a high-risk venture that often ends up in losses for a majority of investors. Statistics show that nearly 95% of bitcoin day traders lose money in the long term. Meaning only 5% of the cryptocurrency day traders are profitable.
This is due to market volatility. Imagine investing $46,000 to buy one BTC, and after a month, the value of one BTC drops drastically to $30,000 and still continues in s downward trend. Although the value of BTC will probably rise in the future, most investors do not have the “strong hands” to hold on during the bear markets, and they end up selling at a loss – to prevent further losses.
The solution to this nightmare is investing in stablecoins and using your stablecoins to earn higher interest rates of up to 8% offered by CoinRabbit.
This way, you cushion yourself from potential risks in the crypto space and still get a chance to earn interest on stablecoins in a slow but sure way.
If you want to earn much more than deposits in fiat currency
Stablecoins allows users to benefit from the advantages of two worlds – fiat and crypto. Depositing stablecoin assets at CoinRabbit provides higher interest rates than conventional centralized institutions like banks.
For instance, savings accounts in the US offer Annual APYs of 0.3-0.7%. CoinRabbit, on the other hand, allows you to earn interest on stablecoins at 10% annual APY. The earned interests are paid out monthly. Additionally, your funds are also readily available for withdrawal unlike staking.
At CoinRabbit, you can withdraw your deposits at any time, unlike staking where you have to lock your coins for longer periods without flexibility. By depositing your stablecoins to earn interest, you have the ability to make either partial or full withdrawals. Also, there is a provision for more than one account.
How do you earn interest on Stablecoins?
Earning interests on stablecoins has never been made simpler at CoinRabbit, where no registration is required; the process is transparent and straightforward. Below is a step by step guide:
- Navigate to CoinRabbit’s Homepage
- Click the calculator to switch from “Loans” to “Earn”
- Enter the amount of Stablecoin you like to deposit and choose your currency type (Type of stablecoin)
- You’ll be shown your Monthly reward; click “Start Earning”
- On the next page, you will “Verify” your phone number, confirm you have read the terms and conditions, and press “Confirm”
- You’ll then deposit your stablecoins and begin to earn interest.
This is the beauty of depositing stablecoin assets with CoinRabbit. It allows investors to make investments comfortably without worrying about a drop in the value of their deposits. Unlike using collaterals to obtain loans, depositing stablecoins will enable you to make investments that only appreciate, eliminating the risk of the depreciation associated with other crypto loans.
What are the best Stablecoins to earn with?
Several stablecoins exist already; however, not all are offered at CoinRabbit. However, there are plans to add more stablecoins; for now, CoinRabbit supports three stablecoins.
USDT ERC 20 is a stablecoin by Tether that runs on the Ethereum network. This stablecoin offers enough stability, and CoinRabbit accepts it as one of the deposits. You can deposit USDT ERC 20 to CoinRabbit ERC 20 to earn 8% APY on your deposit.
The Tron network recently offered support for the famous USDT stablecoin offered by Tether. Since CoinRabbit is continually expanding, there is room for USDT TRC20 users to deposit their stablecoins and earn interest at 8% APY.
USDC, on the other hand, is a stablecoin provided by Coinbase. Recently, due to the numerous concerns about stablecoin reserves, Coinbase came out and declared that USDC would only be backed purely by cash and federal reserves. These stablecoins offer an excellent opportunity for investors to create stable investments without the craziness of market volatility.
Additionally, we made a video on how to make the most out of your crypto. Check it down below.