Best DAI Interest Rates

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Contributor, Benzinga
February 28, 2022

Want to jump straight to the answer? Hodlnaut offers among the highest DAI interest rates at over 12% APR!

With traditional interest rates at historic lows, people are turning to cryptocurrency as an alternate means to generate income. Crypto offers competitive interest rates with percentages unheard of in the traditional finance industry. By cutting down on overheads and working directly with blockchain technology, crypto platforms can offer higher interest rates. Also, these platforms often feature low- or no-minimum lock-up periods on crypto funds. There are lending rates on some platforms while others use a volatile cryptocurrency to help you earn interest.

The DAI stablecoin is a decentralized, unbiased, collateral-backed cryptocurrency soft-pegged to the U.S. dollar. DAI is held in cryptocurrency wallets or within platforms and is supported on Ethereum and other popular blockchains. If you’re a long-term-oriented cryptocurrency investor, then you might want to consider earning interest on your digital assets. Using cryptocurrency to earn interest yields passive income that can augment profits if cryptocurrency markets continue to appreciate.

Many platforms offer interest-bearing accounts that pay you in the cryptocurrency you fund your account with, and these interest rates differ based on which type of cryptocurrency you choose. Hodlnaut is one of those platforms utilizing smart contracts and allowing you to earn money on DeFi outside of cryptocurrency exchanges.  

Disclosure: eToro supports the following currencies: BTC, ADA, DASH, DOGE, EOS, ETH, LTC, NEO, XLM, XTZ, TRX, ZEC. eToro USA LLC; Investments are subject to market risk, including the possible loss of principal. T&Cs apply. *The bonus is available to Benzinga readers in the US for open states only. Served by eToro USA LLC.

Hodlnaut Overview

Hodlnaut was founded in 2019 by Juntao Zhu and Simon Lee as a borrowing and lending platform. The company introduced tiered interest rates last year and launched a dedicated mobile app.

The Hodlnaut Crypto Interest Account lets users earn interest on crypto with up to 7.25% annual percentage yield (APY) on DAI in November 2022. With this platform, no lock-in periods or minimum deposits are required. The platform operates an easy step-by-step approach to earning crypto interest. It also offers one free withdrawal per month and a token swap feature. Interest from Hodlnaut is paid weekly with zero deposit fees to transfer cryptocurrencies.

Hodlnaut: 7.25% Interest on DAI

Hodlnaut offers high interest rates compared to other crypto platforms, which means that investors can generally get higher yields over time. It offers two main products, crypto interest accounts to earn high APY compounded weekly and fixed-term loans with higher yields. The user interface is friendly and easy to navigate.

DAI is quickly becoming a popular option for stablecoin users. As a decentralized stablecoin from MakerDAO, DAI is pegged to the U.S. dollar to ensure each coin is worth $1. DAI exists entirely on the Ethereum blockchain. The stablecoin maintains a consistent price compared to other cryptos. Unlike other stablecoins, no centralized authority oversees it.

Unfortunately, as of November 2022, deposits, withdrawals and swaps are halted on the site.

How to Earn Interest on DAI 

Looking for the easiest way to get started earning interest on your DAI crypto? Check out this quick, step-by-step guide. Remember, you might choose a market leader in popular stablecoins, but are you going to get the interest rates you want.

  1. Open an online account.

    To get started, open an account with a platform that allows you to earn interest on your crypto holdings. 

    Before depositing funds to Hodlnaut, new customers create an account, log in and complete an identity verification process. The process is fairly straightforward and requires basic personal information for the Know Your Customer (KYC) process. 

    Both Hodlnaut and BlockFi are great options if you’re new to crypto and want to earn interest on your cryptocurrency. The platforms currently offer between 8% to13% annual interest rates compounded monthly, depending on which cryptocurrency you use.

  2. Purchase cryptocurrency.

    As soon as your account is verified, deposit your funds and purchase crypto. All the platforms recommended above have instant deposits so that you can start trading immediately. You may have to wait until the deposit clears before you can transfer cryptocurrency off the platform. 

    Hodlnaut supports 5 cryptocurrencies that can be transferred including Bitcoin, DAI, Ethereum, Tether and USDC. Hodlnaut offers no option to deposit fiat currency and convert it into crypto. However, it sets itself apart from the competition by offering some of the best interest rates available for cryptocurrencies, which makes it highly attractive for crypto holders.

    If you don’t already have a personal hardware or software wallet, you should get one to use decentralized finance (DeFi) platforms like Hodlnaut. Hardware wallets are safer than software wallets. Ledger and Trezor rank as two of the most secure wallet brands.

  3. Earn interest on your DAI.

    No minimum deposit is required when you set up a Hodlnaut account, and no lock-in period is imposed, meaning that DAI investors can withdraw funds at any time. The Hodlnaut platform also provides an interest calculator that helps users to calculate the interest they will receive. 

    Once you’ve added funds to your interest account, you’ll start earning interest. Earning interest in cryptocurrency is particularly attractive to cryptocurrency investors who believe the price of Bitcoin and other cryptos in the long term. 

    Other popular cryptocurrencies that investors can earn interest on include Bitcoin, Ethereum and Polygon. Risk-averse investors may find certain interest-bearing cryptocurrency investments intriguing, specifically stablecoins like DAI and USDC.

Other Platforms to Earn Interest on DAI

Gemini is one reputable platform offering the opportunity to earn interest of approximately 6.43% on DAI crypto. DAI holders can deposit their DAI into the DAI Savings Rate contract and earn a yield on their DAI. The DAI Savings Rate is a floating interest rate set by Maker token holders. If the market price of DAI is above $1, Maker holders can vote to decrease the DAI Savings Rate in an attempt to reduce demand for DAI and lower its market price towards $1.

As you search for the best interest rates on crypto assets and price stability, you should sample several platforms that might align with your needs. Other options include:

CoinLoan: 1% - 12.3% APY

Nexo: 3% - 16% APY

YouHodler: 1.5% - 8% APY

BlockFi:  0.10% - 7.5% APY

Risks of Earning Interest on Crypto

Interest paid on crypto holdings differs from interest paid on savings or money market accounts from a centralized bank. Centralized bank interest poses no risk to your principal from trading unless the bank itself were to default or go bankrupt. Although crypto interest rates can be higher than those in the world of traditional finance, returns over time face risk to principal, are more difficult to predict and face a high level of volatility. High-interest digital assets carry a degree of risk. Additionally, the low regulatory oversight and decentralized nature of the crypto industry makes it susceptible to scams. Also, if the cryptocurrency that you hold depreciates, so does the interest you’ve earned. 

Is Earning Interest on Cryptocurrency Worth It?

Cryptocurrencies have a high risk profile that regulated fiat money does not. Although you can earn high rates of return, none are guaranteed. However, if you already own cryptocurrency and are a believer in the future of cryptocurrencies, then earning interest on cryptos may be a way of capitalizing on the value of your digital assets. 

Crypto interest accounts allow crypto holders to invest in digital currencies with the hope that these cryptos will increase in value over time.  

And, when compared to traditional bank accounts, crypto interest accounts offer much more attractive yields. When investing in any cryptocurrencies, it is a good idea to do thorough research and evaluable the risks.

Disclosure: ²Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts
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