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This DeFi Project Will Pay You ETH for Borrowing Crypto

This DeFi Project Will Pay You ETH for Borrowing Crypto

On Jan. 28, the UMA (UMA) project published a post detailing how users could use a Yield Dollar token to get paid to borrow crypto, as the asset currently has a negative interest rate.

  • Set to expire on March 31, the Yield Dollar token lets users borrow USD Coin (USDC) against ETH at the current yield rate of -15.5% -- effectively paying users to borrow USDC
  • For comparison, other platforms with similar borrowing options can offer interest rates ranging from 2-12%
  • The negative interest rate is possible because borrowing is subsidized, as the UMA protocol pays developer mining rewards which are then paid as liquidity mining to users who add to the Yield Dollar ETH and BTC pools
  • One suggested use of the borrowed USDC is to deposit it into Aave to make for a total earnings rates of 22.36%
  • UMA had previously launched a developer mining incentive program in Nov. 2020, which disburses up to 50,000 UMA per week for deploying synthetic asset contracts

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