The crypto industry is evolving into a decentralized financial landscape. This builds upon Satoshi’s original vision of becoming bankless, and some digital assets are yielding bank busting interest rates.
DeFi is The Future of Crypto
Banks are in trouble and that much is a fact. Global debt is escalating and commercial banks are feeding it in the name of fat profits for those at the top. Central banks in turn are feeding them by printing more currency and flooding the system with billions of newly minted bank notes. This generally devalues the base currency over time by diminishing its purchasing power.
While all this is going on the same bankers are dropping interest rates which punishes those responsible enough to have savings, while rewarding those that want to borrow more, at further profit for the bank.
Decentralized finance is the future as it provides a way for people to manage their own finances without a bank dictating to them what they can and can’t do with their own money while profiting from that privilege.
Over the past year DeFi markets have grown substantially, recently hitting the billion dollar value locked milestone. To the novice it can be a bewildering experience, but there are simple solutions that can offer bank busting rates of interest for dollar pegged crypto assets.
Enter The Dai
Dai is one such crypto asset that does this and it currently yields 7.5% just for holding them – that is a whopping 250 times more than a Bank of America savings account which earns a miserly 0.03%.
Setting up a wallet and locking up some Ethereum to get that alluring Dai Savings Rate, which recently went as high as 8.75%, is not as hard as it sounds. Crypto investor Ryan Sean Adams has recently published a ‘how to’ guide on getting it done which he claims takes a newbie less than an hour.
Your savings account earns 0.03% right now
But you can earn 7.5% on DAI “dollars” right now
That’s 250x more
Learn:How to get a DAI saving accounthttps://t.co/FAFH3Pst54
— Ryan Sean Adams – rsa.eth (@RyanSAdams) February 12, 2020
The advantage of using the DSR is that the asset is stable in that it is dollar pegged so simply converting USD to ETH to DAI and back again when you want to cash out alleviates any volatility associated with holding crypto assets directly. Compared to the rest of the crypto investing scene it is extremely low risk.
As ‘RSA’ puts it Dai is probably the closest thing to money crypto has produced so far, and there are many different flavors of it, all of which are detailed in the guide.
Weiss Crypto Ratings also raved on about Dai in its latest tweet;
“So far, #DAI is the only trustless #stablecoin in #crypto world, but there should be more.”
We hear that @IOHK_Charles wants to build a version of DAI on Cardano. So far, #DAI is the only trustless #stablecoin in #crypto world, but there should be more. Stablecoins like DAI have no central point of failure, which is a BIG advantage over the likes of #USDT or #USDC.
— Weiss Crypto Ratings (@WeissCrypto) February 11, 2020
The only problem with Dai at the moment is that it is only pegged to one currency so those wanting to invest without holding dollars will be stung on forex spreads when converting to and from their own currencies.
For DeFi to evolve even further it needs more stablecoins pegged to more fiat currencies which will generate greater adoption worldwide.
Would you convert some dollars to dai to earn better interest? Add your thoughts below.
Images via Shutterstock
Source: How Crypto Savings Can Earn 250x More Than a Bank Account