As the name suggests, Tether (USDT) is a stablecoin that keeps crypto valuations tied to a base value. Tether is hovering around $ 1, stabilizing prices in a volatile market. Although Tether doesn’t move much, you can use cash pools or crypto lending platforms to earn interest, which gives you returns on the asset. In the case of USDT, Crypto.com offers a great combination of high interest rates and a user-friendly interface.
How does earning interest in crypto work?
Earning interest on crypto is a unique and revolutionary idea that connects users around the world and distributes rewards. Rewards on decentralized exchanges are usually given in terms of interest. Users can earn interest by placing their investments in a cash pool, which is a collection of funds used for loans and borrowings. Money in the pool can be used by others, but there is a charge. These fees are determined by the supply and demand of the underlying asset.
Earning interest through a centralized exchange differs. You donate your funds to the exchange and they use the funds to issue loans to other users. For this service, they pay interest. This is very similar to bank savings accounts, but centralized exchanges can offer much higher interest rates.
Crypto.com is an exchange created in 2016 to accelerate the formation of blockchain technology. It has since grown into a leader in crypto exchanges, offering a wide variety of programs and features to support its mission.
Crypto.com provides a simplistic and transparent interface that makes it easy for users to find and buy cryptocurrencies. It also offers a selection of personal financial services. It allows direct deposit so that you can get paid directly into your account. It also offers a Visa card, allowing users to stake Crypto.com Coin (CRO) and earn interest.
It also offers a variety of advanced crypto trading features. You can use crypto in coordination with businesses and receive cryptocurrency as payment. It also offers direct blockchain access – something not all exchanges offer. Perhaps the most important feature it offers is the ability to wager crypto using Decentralized Finance (DeFi) protocols.
Crypto.com offers one of the highest interest rates on Tether for those who wish to stake their USDT. Other exchanges such as Binance and Bitvavo offer rates around 6%, so Crypto.com outperforms its competition in this regard. It also offers over 30 different tokens, allowing plenty of options when choosing which coin to bet. But your funds are blocked in the pool for the minimum wagering period of 30 days. The service is also not available in Hong Kong, Switzerland and Malta. You will earn a base 10% interest on USDT, and an additional 2% if you choose to play with Crypto.com Coin (CRO.)
How to earn interest on Tether (USDT)
Now that you understand the basics of staking and trading, you are ready to stake your own USDT. It’s very simple, and with just a few easy steps, you’ll be on your way to earning interest.
Step 1: Open an account online.
The 1st step to be able to wager your USDT is to open an online account. Crypto.com offers both high interest rates and a simple interface. Other platforms such as BlockFi and Bitcoin Meester also offer competitive rates. Make sure the exchange offers staking before creating an account. Exchanges such as SoFi currently do not offer staking. Creating an account online requires minimal effort – usually just an email and password.
Crypto.com strives to make cryptocurrency a part of everyday life by offering a comprehensive suite of services to crypto users. The company offers a Crypto.com app, exchange, Visa card, DeFi exchange, DeFi wallet, DeFi Earn, Crypto.com price, staking, crypto loan and many other services. What really sets them apart, however, is the combination of super low fees and incredibly generous rewards programs for their users.
- Traders who want to access a secure and low cost cryptocurrency exchange
- Passive investors who want to earn interest on their balance without having to make frequent transactions
- Mobile investors who prefer to manage all their crypto needs through their phone or tablet
- Low fees
- High security
- One stop shop for all your crypto needs (wallet, trading, spending, etc.)
- Many ways to earn interest, rewards and discounts
- Low privacy
- Customer service response time could be improved
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Whether you are a native crypto user or curious enough to start investing, BlockFi seeks to deliver institutional grade financial products to crypto markets that often face restricted access. It strives to provide customers with simple and inexpensive applications designed to maximize the potential of crypto assets. Find out more in our BlockFi review.
- Native crypto clients. You own Bitcoin now. You are the friend who fills in the blanks when the conversation turns to cryptocurrency, and you devour crypto-literacy content like it’s your job (and maybe it is). BlockFi’s platform can help you take your crypto assets to the next level.
- Crypto marginal clients. If you’ve tried buying alternative assets like crypto or know enough to be interested, BlockFi can help you take the next step.
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- Mostly free platform
- The best interest rates on the market
- Earn interest, redeem, and borrow from a centralized hub using the BlockFi app
- Mainly limited to those with a basic knowledge of cryptocurrency
- No dedicated relationship with an investment advisor, so better for those with a solid grasp of crypto trading
Step 2: Buy cryptocurrency.
Once you’ve created an account, you need to purchase cryptocurrency in order to have assets to stake. It’s also pretty straightforward. Go to your account and select the fiat wallet. From there you can link your bank account and send funds to your Crypto.com account. Once the funds are in your account, you can use them to purchase Tether. To do this, go to the Tether page and hit the buy button. Enter the amount you wish to purchase and you should now have Tether.
Step 3: Earn interest on your crypto.
Once you have purchased your Tether, go to the DeFi Swap section and select Pool. From there, you can select a cryptocurrency to provide funds for, such as Ethereum (ETH) and Dai (DAI) or Aave (AAVE) and USDT. Interest rates can vary depending on the asset you choose. Then select the amount you want to provide. Then you have to select the duration of the blocking time. Crypto.com has a minimum lock-up time of 1 month. During this time, you will not be able to sell your position. Payments will be made weekly and added to your wallet. Calculators are available to determine the interest you will receive on your investments. However, interest rates can change, so this is not always an accurate representation of potential earnings.
Other platforms to earn interest on Tether (USDT)
Binance is another platform that offers USDT staking, but the interest rate is less than 6%. This is always a good option if you are looking to test staking on different cryptocurrency pairs, as Binance offers more currencies in its staking program. Another option is BlockFi, which offers a 7.5% rate. BlockFi also offers up to $ 250 in rewards when you sign up.
Risks of Earning Interest on Crypto
While cryptocurrency staking can be relatively safe, there are always risks involved. One of them is the risk of volatility. The value of a coin may drop and you will not be able to sell your investment because the funds are locked in when they are in the cash pool. However, this is not a risk for stablecoins as they are tied to an underlying asset, such as the USD.
Another risk comes from the custodian, or the stock exchange, which holds your funds. Exchanges have been subjected to hacking and cybercrime, so there is no complete guarantee that your investment will return to your wallet safely.
Finally, the staking interest rates fluctuate like normal interest rates. This means that there is a risk that your interest rate will drop dramatically and you will generate lower returns on your investment.
Is earning interest on cryptocurrency worth it?
While US bond interest rates hover between 1% and 2%, cryptocurrency interest rates can easily exceed 15%. This offers a much higher return on investment than more conventional lending techniques. It’s also easy to use, readily available, and a great option for receiving stable returns from an otherwise volatile market.
Remember that once a cryptocurrency has been staked, it cannot be traded until it has been peeled off. This could be problematic if a dramatic drop in prices occurs. Additionally, recent hacks from companies like NiceHash have called the security of the cryptocurrency into question. All exchanges are prone to hackers, which means your investment is not completely risk free. While crypto staking has both advantages and disadvantages, it can be a great way to earn interest.
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