Investors that are turned away by high-volatility assets, love stablecoins. Stablecoins were developed with a single aim and that is to ensure stability in the market. Since these coins are much more stable than regular digital coins, more conservative investors feel compelled to enter the market and purchase their first crypto coin.
Another positive aspect of stablecoins is that you can actually earn interest from them. Depending on the coin you pick, you can expect to earn a certain amount of interest by holding the coin in question. All you have to do is register yourself on a lending platform, and sign the right contract for maximum APY.
So, if you are one of those investors and you want to inform yourself more about stablecoins and how you can profit from holding them, read below.
In this article
USDC prides itself as one of the fastest and easiest ways to spend money online. It also tries to completely eliminate all the volatility that comes with regular cryptocurrency. Of course, some might argue that the volatility rate is what makes crypto so attractive to investors.
However, there are investors that just want to protect themselves from inflation, and if possible, to make the money they have invested in crypto work for them. USD coin holders have the ability to earn interest if they work with crypto exchanges and lenders.
That being said, there are various coins that you can use to earn profits via interest and each one has different interest rate opportunities, depending on the exchange.
Tether is the most popular stablecoin on the market and its liquidity is the main reason why people opt for it rather than other stablecoins. Tether is also the largest coin on the market, making it the third biggest by market cap coin only preceded by Ethereum and Bitcoin.
The main goal of Tether is to keep the value of the coin pegged at 1:1 to the dollar. What this means is that you are going to pay exactly one dollar and receive one coin. This shows us that Tether can be used as a substitute for fiat coins and allow businesses to make fast trades globally without any excessive fees.
So, since this coin is extremely popular and it’s actually tied to the dollar, it’s a very sound investment that can be used to earn interest rates. However, to find the best interest rates out there, make sure that you search for the best deals on crypto exchanges.
Just like other stablecoins, USDP aims to be one of the most popular coins that offer its users stability and efficiency in trades. Like Tether, it is also pegged at 1:1 and the coin is only created when a dollar is sent to Paxos. This means that a coin is not created if there is no demand for it.
What makes USDP a potential coin of the future is that Paxos has a partnership with PayPal in place. So, investors that are looking to make a lot of transactions via PayPal, might want to look into the benefits of USDP.
The platforms of stablecoins
Once you select your desired coin, it’s time to pick the right platform where you can earn the most APY.
NEXO is one of the best platforms for USDT as the interest rate you can earn is around 17%. They also offer various types of terms when it comes to crypto lending and they can enjoy free withdrawals with flexible holdings.
BlockFi is arguably the most famous lending platform. Its popularity stems from the high APY and the most popular stablecoins are always welcomed there. There are no limits regarding deposits and flexible withdrawals are available as well.
Stablecoins are the best option for conservative traders that want to eliminate all the risks cryptocurrencies have. Since stablecoins are not volatile and most commonly have the same value as the dollar, crypto market circumstances don’t directly affect the performance of these coins. This makes them perfect for investors that want to focus on making steady profits by lending their coins.