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Falling Industry Earn Rates and How Cabital Offers 6% APY

Find out how Cabital offers 6% APY even as interest rates are falling across the industry.

If you’re a crypto investor on certain crypto savings platforms, you’ve received news that your APY earn rates have fallen (in some cases by half), and your earnings have taken a hit. 

To make matters worse, there wasn’t any notice given to investors on when the rates would be cut, resulting in frustration over the inability to make plans in advance. 

What triggers the cut in interest rates? 

While most platforms don’t provide explanations for their planned rate cuts, crypto industry trends provide insights into why it could have happened. 

Market Conditions

There used to be a shortage of USD stablecoins, where the demand constantly exceeded the supply. 

By offering favourable interest rates on stablecoins like USDT and USDC, interest platforms could entice investors to deposit their stablecoins, which they then lend out at premium rates to other platforms. 

On exchanges, stablecoins are used as a bridging asset to enter and exit trades without risking losses. They’re also in demand from crypto traders, who look for safe havens when crypto prices are volatile. There’s also the demand from DeFi, where stablecoins are sought after as collateral in lending and staking pools.

However, with more investors investing in stablecoins due to the high interest rates, shortages are potentially drying up, and this could lead to reduced interest rates, which leads to the next reason.

Growing Popularity of Crypto

As cryptocurrencies become more popular investment options, more people start looking for crypto investment opportunities. And with dollar-pegged stablecoins offering upwards of 5% interest rates versus a USD savings account rate of up to 0.6%, or even 30-Year US Treasury Yields of 2.47%, it’s clear which option appeals more to investors.

With more people depositing their coins, paying out constant high yield rewards threatens to become unsustainable, especially when paired with aggressive billion-dollar marketing campaigns. 

What Are My Options?

If other platforms are offering higher yield on your assets, you’re probably planning to move your holdings elsewhere, where you’ll be able to enjoy better rates on your investments. Even though the rates are falling in the industry, ours will remain stable, so start earning with us today!

High interest rates with Cabital
Table 1: Comparison of Crypto Savings Platforms

However, if you’ve already locked up your crypto in a savings plan with the platform, you’ll have to wait it out. You may also have chosen to stake a certain value of the platform’s native tokens to generate a higher yield on your deposits, as the more platform tokens you stake, the higher your interest rate will be. 

You can monitor the performance of the platform’s token until your current plan expires before deciding if you prefer to drop it from your investing strategy or to continue holding these tokens if you believe the value will appreciate. However, these tokens are subject to the volatility of market conditions, where you could end up with tokens that are suddenly worth less than the amount you paid for them. 

At Cabital, we have a firm stand against platform tokens, as we believe that users should be able to enjoy the best interest rates without bearing any additional volatility risk.

How Cabital Offers 6% APY

Once our customers deposit their crypto with Cabital, we lend these assets to major DeFi platforms with well-established Total Value Locked and extensive audit histories, with a cap of around 2 billion USD.

Before we invest in a certain DeFi project, we consider the following: 

  • Safety: We do detailed due diligence on which protocols we invest in, taking into account how safe the smart contract is and other security checks.
  • Profitability: We consider the protocol’s yield, token economics model, and interest rate model.
  • Liquidity: We ensure that the maturity of our investments match our customers’ withdrawal demand.
  • Over-collateralisation: We only consider DeFi projects that require their borrowers to place collateral that exceeds the amount borrowed to ensure the safety of our principal.

Cabital earns on interest spread and spread in conversions, and we can offer our customers up to 6% APY on their crypto deposits because we share up to 80% of our investment income with them. 

To find out more about how crypto investment in Cabital works, check out our article on 

How Does Crypto Investment In Cabital Work, and How Do We Offer Such a High Yield?

This article has been prepared by Cabital Fintech (LT) UAB  (the “Company”) and is general background information about some of the Company’s activities at the date of this presentation.

This article does not contain all the information that is or may be material to you and should not be considered as advice or a recommendation to you in respect of the holding, purchasing or selling of digital assets and does not take into account your particular objectives, financial situation or needs. This article has been made to you solely for information purposes. This presentation may be amended and supplemented as the Company sees fit, may not be relied upon for the purpose of entering into any transaction and should not be construed as, nor be relied on in connection with, any offer or invitation to purchase or subscribe for, underwrite or otherwise acquire, hold or dispose of any digital assets, and shall not be regarded as a recommendation in relation to any such transaction whatsoever. The contents of this presentation should not be considered to be legal, tax, investment or other advice, and you  should consult with your own counsel and advisers as to all legal, tax, regulatory, financial and related matters concerning an investment in or a disposal of such digital assets and as to their suitability for you.

This presentation and its contents are proprietary to the Company, and no part of it or its subject matter may be reproduced, redistributed, passed on, or the contents otherwise divulged, directly or indirectly, to any other person (excluding the relevant person’s professional advisers) or published in whole or in part for any purpose without the prior written consent of the Company.

This article contains forward‐looking statements. Such forward‐looking statements involve known and unknown risks, uncertainties and other important factors. Certain forward‐looking statements are based on assumptions or future events which may not prove to be accurate, and no reliance whatsoever should be placed on any forward-looking statements in this article.

The information in this article has not been independently verified. No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the presentation and the information contained herein and no reliance should be placed on it. Information in this article (including market data and statistical information) has been obtained from various sources (including third party sources) and the Company does not guarantee the accuracy or completeness of such information. 

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