Learning how to earn interest on crypto is a good idea. This concept hasn’t been realized to its full potential until very recently with the emergence of CoinDepo. The idea is that you can constantly increase your crypto assets by depositing them in Compound Interest Accounts without doing anything other than trusting the appropriate digital asset financial service provider.
It works in a similar way to the real-life compound interest received from savings funds, bank savings accounts or similar financial products. The difference is that, in a decentralized web, it’s harder to find a trustworthy provider. Fortunately, CoinDepo seems to be just that. So, how does this service work?
How Compound Interest Works
Compound interest is the interest you earn on previous interest. When you deposit funds into a savings account, you earn interest not only on the initial deposit amount, but also on the interest paid that accumulates in the account over time.
In real life, interest deposits and compound interest have been a staple of banking for a long while—centuries, actually. However, this obvious financial product hasn’t really caught fire with the crypto community. Decentralized finance (DeFi) solutions have only just started gaining momentum. The slowness is not surprising.
With regular banking, you need to open up a special savings account and place some money into it. According to the predetermined conditions, you’ll be able to collect interest payoffs from this deposit. It was very popular in years past, but it’s currently hard to find an offer that exceeds a yearly interest of 5% per annum. This will only account for inflation.
With crypto and stablecoins, the situation is much better. Such products have only just started appearing, but compound interest rates can be as high as 24% per annum + compound interest (at least on CoinDepo). It’s a lot more reflective of how much a given value can change on the decentralized market, and it offers a lot more in the way of profit.
Besides that, the process is very similar for crypto and stablecoins.
CoinDepo Compound Interest Accounts
On CoinDepo, you can earn compound interest on fixed deposits made in regular cryptocurrencies and stablecoins into Compound Interest Accounts:
- Cryptocurrencies like Bitcoin, Ethereum, BNB, XRP and many more can yield an annual interest rate of up to 18% + compound interest.
- Stablecoins like USDT, USDC, and DAI can yield an annual interest rate of up to 24% + compound interest.
The benefits of using stablecoins are manifold. Not only is it beneficial to keep some of your savings in this type of crypto, but interest is one of the few ways to turn an active profit from stablecoins. They aren’t really meant for speculative trading, since their value is tied to the rate of the fiat collateral currency and does not change over time.
So, if you want to increase your stablecoin savings, the likeliest way is to create a fixed deposit in USDT, USDC, or DAI and let it grow over time. How much you’ll earn depends directly on your compounding period. You can choose how often you want to receive your returns. It’s not just an annual deal.
Compounding Periods on CoinDepo
While the interest is calculated as annual, you can collect your returns on a much more frequent basis than that. It is more profitable for you to wait the entire year because the interest rate is at its highest this way. However, if you want to receive the fruit of your work with more regularity, CoinDepo can offer you shorter compounding periods.
You can divide the annual payment of interest earned into daily, weekly, monthly, quarterly, semi-annual, or annual periods. The end sum will be almost* the same. It’ll just be split into many smaller parts depending on how often you want to be paid interest.
The 18% and 24% annual rates + compound interest for regular cryptocurrencies and stablecoins respectively are only applied to yearly payouts. It’s the most profitable way, although not as flexible. It also demands a lot more trust. However, you can withdraw and deposit funds at any point during your stay on CoinDepo.
*The smaller the compounding periods are, the smaller your interest rate gets, as well
How to Start
You don’t need to do much in order to start. CoinDepo is a basic financial solution for digital assets that requires opening a CoinDepo account, crypto wallet information for withdrawals, and some KYC details. However, these are less obtrusive compared to what you have to submit on crypto exchanges, like Binance.
As such, you can start funding your account very soon on CoinDepo.
Choice of a Cryptocurrency
As mentioned, you can either deposit regular cryptocurrencies or stablecoins. The technical aspect is the same. It’s the financial part that changes from one to the other.
With regular crypto, you collect up to 18% of interest annually + compound interest. This works for Bitcoin, Ethereum, BNB, XRP, Polygon (MATIC), Litecoin, Bitcoin Cash, Avalanche (AVAX), and Cosmos (ATOM). There can be many reasons to want to make a deposit of this kind, although stablecoins are arguably more profitable. After all, regular crypto can change value all the time, and it may be that your annual interest won’t even cover the price loss. So, you have to manage these carefully.
With stablecoins, you collect up to 24% of interest annually + compound interest. This works for USDT, USDC, and DAI. The big upside is that they don’t change in value on the market. It means that at the end of the year you’ll get exactly 24% more US dollars, to the price of which these stablecoins are pegged. At the same time, Bitcoin can also rise in value in that same year, while stablecoins absolutely will not (not against US dollars, anyhow).
In light of this, there is a lot of leeway in terms of what you can pick to gain compound interest. You can choose stablecoins, which are reliable and predictable. However, there are also regular cryptocurrencies, which can be used to gain additional money if you time your deposit correctly.
There is no right answer, different situations call for different investments. However, it is true that stablecoins are always the safest bet.
Summary
CoinDepo is a great venue to earn money with crypto and stablecoins. Its primary product, the compound interest on fixed deposits in digital assets, offers lots of potential passive income. It’s one of the few respectable digital financial services providers in the crypto market.. As such, there is a lot to gain from interacting with the company.
