Top Three Tips to Earning Interest on Crypto

Crypto assets can serve as a form of long-term savings. But what about earning interest on those savings in the short-to-medium term?

Crypto holders now have a variety of options. Each option comes with its own pros and cons.

Using a crypto lending platform requires less technical knowledge than navigating the DeFi realm or independently staking PoS coins.

Here are three tips to earning interest in a way that maximizes returns while maintaining flexibility.

Preserving liquidity

Some crypto lending platforms have mandatory lockup periods. That means when someone wants to earn interest on their crypto, they have to lock it away for a set period of time, making them unable to move their assets or transact with them.

What happens if someone needs liquidity during a personal or market crisis? Locking up funds at the wrong time could lead to calamity.

Vauld has solved for this by making the lockup period optional. Users who want to earn a higher rate of interest can choose to lock up their tokens for a time, but doing so isn’t necessary.

Darshan Bathija, co-founder and CEO of Vauld, explained how making lockups optional rather than mandatory can be beneficial for users. He also noted that optional lockups can serve the interest of the user by providing higher returns:

“A lockup does provide some predictability. We have the option to lock your funds for a month and earn a higher yield.”

All of this provides a tremendous degree of flexibility for users. Not only can they choose whether or not to lock up funds, but they can even trade with the crypto they are currently earning interest on if it’s not locked up:

“If you willingly lock up your funds and temporarily forgo your ability to trade with your funds you will be rewarded with higher interest rates, similar to savings vs brokerage accounts,” Darshan Bathija added.

In short, Vauld users can lock up funds for a higher rate of return. But they also have the option to accept a lower rate in exchange for the convenience of being able to trade or move their assets.

Customer support on-demand

Users of centralized exchanges know the drill: you submit a support ticket for help with a problem, and then the waiting begins. Days, weeks, or even months can go by before getting a response.

Vauld, on the other hand, allows users to start a live chat with customer support in no time. Responses typically occur within 24 hours or even faster. 

According to Darshan Bathija, “In case you have difficulty with anything, we have a very solid customer support experience where you can start a chat with our team immediately, instead of waiting weeks, it takes about a minute for you to talk to our team.”

It’s rare for a platform to make this kind of commitment to customer service. During times of extreme market turbulence, customer support on other platforms can often be hard to reach at the most important time. With Vauld this is less likely to be the case. This should help users maximize interest by quickly clearing away any potential hurdles.

Avoid hidden fees

Many traders and investors fail to take into account the extent to which fees can eat into their profits. While exchange fees tend to be transparent, borrowing and lending platforms have the opportunity to insert hidden fees at every turn.

And it’s not only the platform that can introduce fees that lead to losses. If users earn interest on a token, but that token’s value falls by a greater percentage than the interest rate, a loss could still be realized.

Stablecoins can be a great choice for earning interest, as they avoid this dilemma. Vauld offers excellent rates on stablecoin deposits with no hidden fees. Lock-in rates for USDC and DAI are 12.68% APY. These rates are among the highest in the industry.

When seeking interest on crypto assets, remember these three things: preserve liquidity, go for great customer support, and avoid hidden fees. Use a platform that offers interest on funds that aren’t locked up, has fast support response times and no hidden fees.