Every crypto enthusiast looking for the possibility of storing their money in cryptocurrencies like in a bank, but with minimal risks, should purchase stablecoins. The price of these digital assets is stable because they are pegged to real-world currencies like the US Dollar and so on. Holding stablecoins is not as risky as having cryptocurrencies like ETH, BTC, and others. In addition, during bear markets, this is a great option to keep the assets.
Holding stablecoins through various platforms is similar to holding funds in a bank. People can earn interest without any effort. Profits are usually much higher than in centralized financial institutions. Crypto investors should use a swapping platform like Saddle Exchange, Uniswap, or others to buy stablecoins. Next, they need to apply one of the products that allow getting profit from holding stablecoins. Below, you can find out some of the best methods to generate such income.
Nexo is a centralized platform that adheres to all identity verification procedures as well as anti-money laundering to prevent illegal transactions. The company spends vast efforts and funds to ensure the security of each deposit. The management also provides insurance for all client funds to avoid further problems. Nexo offers each crypto investor +10% per annum for keeping assets on the platform. This means that in the case of holding stablecoins of $1000, in a year, people can already get about $1100.
If some one desires to take advantage of this product and deposit their funds here, it is worth going through several stages. Below, you can find detailed instructions on how to do everything right.
- Go to the official Nexo Exchange page.
- In the upper-right corner of the page, click Create Account and go through the registration process.
- Next, users need to undergo the KYC verification process. There are two types of this procedure. The first one allows earning interest from all stablecoins and altcoins available on the platform. Another KYC opens up the opportunity to profit from fiat currencies.
- After completing this procedure, clients should open the profile page, go to the Security tab, and enable 2-factor authentication. Investors need to scan the QR code using Authy or Google Authenticator.
- Now, people can proceed to purchase the desired asset. In the profile menu, select the stablecoin crypto enthusiast need. These assets can be transferred from a crypto wallet or purchased directly from a website.
- Within 24 hours after depositing the account, the interest for storing stablecoins should appear on the account.
Profit from holding assets will be credited to the investor’s account daily. Crypto enthusiasts can view the total amount of interest that has been accrued. They should move to the Accounts tab and click on the Total Earned button to do this. The user will immediately see the statistics of all interest payments.
The procedure for earning interest through one of the best CeFi platforms is described above. Now it’s worth talking about the popular DeFi project Compound, which allows making money by holding stablecoins. This product is entirely decentralized. All processes take place without the mediation of management bodies.
The system is built on a smart contract network. Different interest rates for various stablecoins are available on the site. So, crypto investors can get 7.35% for TUSD, 4.70% for USDC, 3.74% for DAI, and 3.39% for USDT. If anyone desires to hold assets on this platform, they should go through the registration process and transfer money to the account. Below, you can find a detailed guide on how to do this quickly.
- Go to the official Compound platform page.
- In the upper-left corner of the home page, click on the App button.
- Open Metamask or other Web 3.0 wallets. After that, connect the crypto wallet to the platform.
- Select the stablecoin from which you want to receive profit from the list and click the Enable button.
- Enter the amount you wish to deposit and sign the lending operation with the crypto wallet.
Holding assets both on DeFi and CeFi platforms carries risk. If clients do not complete the KYC procedure, lenders have every right not to return the money to the person. Decentralized lending markets can be hacked. Before people start earning interest from stablecoins, they should weigh all the benefits and risks of such a decision.
Also, consider reading about: Top 5 Altcoins for Investment in 2022!