CeFi: Key Facts

CeFi: Key Facts

By Mynima | Hobbyist Crypto | 27 Jul 2020


Introduction

Despite there being a massive buzz right now around DeFi there are still plenty of centralized options out there for the savvy savers to make the most of their hodl'd tokens. The best way I've found it is to look at the CeFi as possible a stable saving solution whereas DeFi has the variability (and therefore potentially higher returns). This isn't going be a discussion on the merit of decentralized vs. centralized, instead what I wanted to do was just share a few of the most well known CeFi options out there that offer interest. During my own research/saving I've found that they all have their own nuanced structure so it can sometimes be difficult to compare apples with apples. To that end we'll look at a summary of each product and bringing together all the relevant information to help you make decisions about what is best for you.

Remember this isn't financial advice, it is just a summary of information from a range of sources with a focus on CeFi interest earning solutions (in no particular order):

  • BlockFi
  • YouHodler
  • Crypto.com
  • Celsius Network
  • Mode
  • Nexo

So let's take a look, if you have any other suggestion/options not included that you think I or other should check out then just drop them in the comments.


Key Facts Comparisons

Order is by Marketcap ranking (per CoinGecko), at time of writing, and descending alphabetical order for company name.

Cryptocurrencies

crypto1

crypto1

crypto3

 

Stablecoins

stable1

Stable2

 

Fiat and Gold Tokens

FiatCompare

Legend:
- = None or N/A
+ = $50,000 aggregated
* = $500,000 aggregated
Note: These rates are based on the current advertised rates either on the websites or in the relevant apps. They are subject to change as and when the company deems necessary. Specifically for Crypto.com when you lock into a rate for a fixed period that rate will be guaranteed for that time.


Catches and Bonus'

As with all good things there are bonus' and catches, so here are the main things to look out for.

BlockFi

  • Bonus - One free withdrawal a month
  • Bonus - $10 signup bonus for $100 deposit (or $20 bonus for $500, must hodl til 14Sep2020) - Link

Nexo

  • Catch - To get the best rate you need to stake 10% of the value of your savings in Nexo native token.

Mode

  • Bonus - £10/€10 Bonus after 1 week for 0.01 deposit - Link
  • Catch - Must maintain a balance of 0.01 or more
  • Catch - Only available on iOS and not available in US.

YouHodler

  • Catch - Must keep balance to end of week or forfeit interest.
  • Catch - Minimum Withdrawal amount is $5 equivalent

Crypto.com

  • Bonus - $50 Referral Bonus in MCO - Link - 689bz2r6w4 
  • Catch - To unlock $50 you need to sign up to a cashback card and stake MCO for 6 months
  • Catch - To earn the top rate you need to stake 500 MCO and lock in for 3 month. There are intermediate rates for 0, 1 or 3 month lock in funds with and without staking.
  • Note - The base rate shown above are the minimum available rates, currently, and are based on not locking in or staking any fund. If you do not want to stake MCO but are willing to lock in your funds for 3 months then you will get middling rates that are comparable with the competitors (e.g. BTC/ETH/LTC/BCH/XRP/ALGO: 4.5% | BAT/MCO/ADA/BNB/LINK/XTZ/XLM/VET/ATOM/MKR/KNC/ENJ/PAXG: 4% | Stablecoins 10% | CRO 16%)

Celsius Network

  • Catch - Best rate only achieved if you choose to earn interest in CEL tokens

 


All the Best

Based on the information above I've added a few of the best of categories (just my own opinions here):

  • Best Options: Crypto.com / Celsius Network
  • Best BTC Base Rate: BlockFi
  • Best for Fiat: Nexo
  • Best for Stablecoins: Youhodler
  • Best Withdrawal Fees: Nexo / Celsius Network

 


Final Thoughts

One of my biggest gripes when I've been looking at these different CeFi products is just how spread out all the information is. No numerous occasions I've found what looks like a good interest earning account on the surface only to to find out that when I've transferred in funds I didn't meet the minimum balance. The double whammy is when there are withdrawal fees. If I am honest I feel like the CeFi providers quite often don't make all of these fees/conditions as clear as they should. Say what you want about the centrally regulated banking system but at least they are forced to provide Key Fact Illustrations to make comparison of products much more straight forward for consumers. Remember whenever you see an attractive rate for a product (particularly in the cryptosphere) don't jump in headlong, instead try searching their support site for the following things:

  • Fees? What are they and when are the applied?
  • Interest rates? Are there any catches to getting the best rate? Does it compound, and when is it paid?
  • Insurance? Are your funds protected and, if they are not, are you confident in investing with that risk?

CeFi can be a Hodlers best friend as it is a little less susceptible to the interest earning fluctuations that we currently see with DeFi products. As with anything doing your research beforehand will save you a whole lot of hassle later. However, for now feel free to use this a starting reference point.

 

Hope you enjoyed the summary, good luck y'all!

 


References
https://celsius.network/earn-interest-on-your-crypto/
https://crypto.com/en/earn.html
https://modebanking.com/the-bitcoin-jar
https://nexo.io/earn-crypto
https://www.youhodler.com/earn-crypto
https://blockfi.com/crypto-interest-account/

Mynima
Mynima

Hobby miner and Crypto interested programmer. https://mynima.github.io/


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