Jump to content
truekumar

Earning Interest on my XRP?

Recommended Posts

Hi guys,

Rather than storing my xrp on cold storage for years, is there a better option out there in which I can earn some interest on my xrp with minimal risk?

What I’m asking is, are there any institutions out there that will offer me interest (in the form of further xrp) on my current stack of xrp without any risk, and with full insurance on my stack??

or is it just safer to keep it all on some cold storage and lock it away?

Share this post


Link to post
Share on other sites
15 minutes ago, truekumar said:

Rather than storing my xrp on cold storage for years, is there a better option out there in which I can earn some interest on my xrp with minimal risk?

Yes there are options, the exact risk is unclear. You put your faith in Bitrue, Celsius or any of the others if you store your XRP with them.

You no longer have direct access to your XRP should something happen, and yes **** happens all the time in crypto. Cold storage is safer. 

Share this post


Link to post
Share on other sites

Yes that’s the only problem as the risks are still quite unclear with a lot of these schemes.

Do you guys think that maybe once Bakt goes live then we may have better options next year for insured accounts with regulated and authorised brands in which we can earn credible interest on our xrp?

Share this post


Link to post
Share on other sites

At the end of the day, you are adding a counterparty risk if you give your XRP to a 3rd party.  They could get hacked, they could go broke, they could do an exit scam.  And terms and conditions aren't worth anything (IMO) in these situations.  "But but but...in the terms and conditions it says I'm protected!" - good for you, but how are you getting your XRP back?

Share this post


Link to post
Share on other sites
Posted (edited)

Hi, 

 

8 hours ago, truekumar said:

I can earn some interest on my xrp with minimal risk?

You can lend your XRP. For example, Poloniex allows you to do so. Please find below a screenshot of its best loan offers regarding XRP.

image.png.2d81021a2a45cfaf4a56402567911e70.png

 

You can also have a look at Nexo (https://nexo.io). A successful lending platform. XRP is not available for the moment but it is planned to be.

Moreover, note that you have crypto quant funds that are generally running market neutral strategies such as: market-making, arbitrage, and low latency trading. If you go to a fund, you will have vanilla terms to respect, such as but not limited to: minimum investment, lock-up period, etc.

According to PWC (https://www.pwc.com/gx/en/financial-services/fintech/assets/pwc-elwood-2019-annual-crypto-hedge-fund-report.pdf), those funds delivered on average 8% in 2018, which is f****** good.

For the quant funds, the average management fees is 1.57% and the average performance fees is 26.8%.

I know pretty well the topic so if you want more info, do not hesitate to go private.

 

8 hours ago, truekumar said:

without any risk, and with full insurance on my stack??

No. Even when you take the most simple saving accounts through your bank, the bank does not guarantee your principal. However, because it is a bank (has a banking license), you can be entitled to compensation of up to £85000 in case of default, as an example for the UK. As you imagine, it depends on regulation and the country where you are. If you want to dig in the example, please have a look at: https://www.fscs.org.uk.

Even the whales, Morgan Stanley, Goldman Sachs, etc. never guarantee your principal if invested on their arbitrage funds. 

 

8 hours ago, truekumar said:

or is it just safer to keep it all on some cold storage and lock it away?

When you have capital, whether it is digital assets or bank notes under the mattress, it is smart to make them work. I would say so. When the risks are well-known, it's ok. There is risk everywhere, even in the case of cold storage you are not protected against a potential hack.

Peace 

Edited by Lumpy

Share this post


Link to post
Share on other sites

This is a great topic for discussion IMHO especially during this very tiresome flat market.  I have also looked into a number of options but have found that each one presents its own combination of risk and potential reward, with some of them more disproportionately skewed towards risk.  I agree with others that there’s no “free lunch,” but if you can sleep well knowing there is an assumed risk, you might want to put a small stack into one of the interest yielding alternatives.  To me, it’s definitely a case of finding the sweet spot that I can live with if everything goes horrifically wrong.   Doing a simple future value calculation may help you decide if the potential gain is worth the risk of losing the entire “invested” stack.  

Share this post


Link to post
Share on other sites
Posted (edited)
7 hours ago, truekumar said:

Hi guys,

Rather than storing my xrp on cold storage for years, is there a better option out there in which I can earn some interest on my xrp with minimal risk?

What I’m asking is, are there any institutions out there that will offer me interest (in the form of further xrp) on my current stack of xrp without any risk, and with full insurance on my stack??

or is it just safer to keep it all on some cold storage and lock it away?

Yes. Go to Celsius Network (https://celsius.network/earn-interest-on-your-crypto/ ) download the IOS/Android App and deposit your XRP there for 2.75% or 3.0% (if you elect to earn interest with CEL token). Default is to receive interest payment with the same coin deposited.

Advantages:

You can withdraw at any time you want.

Disadvantages: 

You leave yourself open to the Celsius platform and if they get hacked or the owner splits (however small.. both are real risks) then you lose your deposit as it isn't guaranteed. The NEXO platform is another option where deposits are guaranteed but there are not as much choice in coins and currently don't support XRP. To mitigate this risk, I don't deposit all I have on Celsius.. just a small portion ... less than 10% of my stash..

No compounding of interest (Except with the CEL option in the future .. only if you opt in). Whenever you withdraw your coins, the amount withdrawn is from your principal first .. and you only earn interest on the principal amount.  You could of course earn in CEL and compound your interest only in the CEL token. I think you can also withdraw your CEL earnings, exchange it on IDEX (or LIQUID) for XRP and deposit again into your CELSIUS account as XRP principal .. only a couple of exchanges trade CEL currently .

Low interest rate compared to stable coins like DAI, Tether, USDC etc.

 

 

Edited by richxrp

Share this post


Link to post
Share on other sites
5 hours ago, Tripple said:

Uphold and CredEarn is a potential option. I'm not so sure it's the way to go though because as @Benchmark says, 'the exact risk [of lending your assets to a 3rd party] is unclear'. 

I came here to recommend CredEarn through Uphold.  I use them with both USD and LBA, which is arguably riskier given USD "deposits" are not classified as a deposit so there is no FDIC insurance on my USD lent to CredEarn, but with the 10k LBA staked I get 10% APR interest paid out quarterly.  I think depositing XRP with them with the 10K LBA staked gets you 6% APR paid out in either USD, LBA, or XRP.  I'd have to double check they offer all 3 payout options.

The good thing about CredEarn is it's a company founded by former Paypal executives and they are based out of San Francisco, CA in the US.  They use BitGo custodial services for their digital assets being lent for interest, which are apparently an enterprise-class / institutional-level custodial service.  They have hazard insurance on both digital asset and fiat deposits (again no FDIC coverage on fiat, but if certain things happen your assets are covered).  If anyone wants to learn a bit more about CredEarn I'd recommend hopping onto their youtube channel and checking out some of the recent videos (https://www.youtube.com/channel/UCKosfUEEGNDIm7YpDnLykDg).

I've also used Celsius and I didn't find the design too appealing.  It's not really designed well for US customers right now either.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...