Many rush to come stable coins for its ability to de-risk cryptocurrency positions. A stablecoin can be linked to any perceptibly stable asset, for example, a digital asset like Bitcoin (BTC) or a fiat currency such as the US dollar. In theory, if a digital asset were pegged to the US dollar, the value of $ 100 in the digital currency should mean that $ 100 in the backed asset is held in a secure reserve such as a bank account. Stable coins are widely useful; Its uses include moving tokens between exchanges and protocols securely, lending tokens, or making payments. For this reason, they have also quickly become an entry point to the world of cryptocurrencies for first-time users.
Unlike Bitcoin, Ethereum (ETH) or other cryptocurrency projects, the price of a stablecoin is, well, stable and won't always provide a significant opportunity to win. In this case, profits will normally be reduced to the entry into the market of new innovative products, such as peer-to-peer loans. With peer-to-peer lending, users can take advantage of a crypto lending platform to lend their stablecoins. Interest rates, in this case, will often be significantly higher than what is earned in a traditional savings account.
Users choose a platform that specifies a high interest rate, higher than the rate paid by the end user, the difference is known as a spread. The spread is the way a lending platform will pay its lenders. Note that the process can be compared to storing your assets in a normal bank account. After depositing your funds, traditional banks will invest funds or lend them to others. With the profits they collect, they then redistribute a portion to you, either daily, weekly or monthly.
A happy medium
Some platforms offer a user interface similar to your traditional bank; the only difference is that higher interest rates are often offered. Although this can be riskier than storing your money in a traditional bank, stablecoins are also more attractive as an investment than traditional cryptocurrencies, as there is less chance of funds being withdrawn for less than a user started. .
To further illustrate this concept, let's say you bought a cryptocurrency with the intention of earning a 10% interest rate each year on a given platform. This is an attractive rate and is more than you would likely earn on funds deposited into your traditional high-interest savings account. However, the underlying asset is also at higher risk, suggesting to users that they may end up losing their money if the price drops (and it probably will at some point). Even if there is a 10% cushion, it is not uncommon for a wild price swing to reduce the price of these assets well below what you expected if you haven't met your time.
Stablecoins, on the other hand, almost guarantees that the amount you have invested is the same amount that you will get back. For example, 850 USDC tokens, each priced at $ 1, will always result in 850 tokens worth $ 1. Theoretically, prices should always move in a sideways pattern, as the assets backing them (in this case, the USD) will always be worth $ 1.
Side price gain
While crypto loans provide an opportunity for stablecoin holders to earn higher returns, they do little to allow users to accumulate digital assets like Bitcoin. To address this concern, Matrixport is launching a new user-friendly cryptocurrency investment project known as "BTC-U Range Sniper."
Matrixport's new product offers users annualized performance (APY) from anywhere between 6 and 200%, which can be paid in USDT, BTC, or USDC. The amount is determined by the price of BTC at the time of settlement. At settlement time, if the price is above the given range, the user will be paid a minimum of 6% APY in USDC. However, if the liquidation falls below the set range, the main investment will be transferred back to Bitcoin and the user will be paid the same minimum of 6% APY. In an ideal scenario, the price will fall within the predetermined increase, allowing users to earn up to 200% APY.
When asked about his new offering, John Ge, co-founder and CEO of Matrixport, sums up this initiative as: โStablecoins are an important fiat pathway and have been a great entry point for cryptocurrency curious. However, many stablecoin holders now want to accumulate BTC while earning higher returns. BTC-U Range Sniper is an easy-to-use crypto investment product where we allow users to continue to earn attractive stablecoin returns or take advantage of BTC's innate volatility to accumulate more BTC. "
As a result, USDC holders looking for a suitable time to enter the market are likely to benefit from Matrixport's latest product offering.
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