With Bitcoin on the march to all-time highs, it’s tempting to want to throw all of your stablecoins into it, Ethereum, and other top 20 projects. However, from my experience, it’s a good idea to keep my crypto allocation diversified and not be “all in” at any time. Therefore, I try to hang onto a core position in stablecoins earning a steady yield.
And who can blame me? After years of earning no yield in savings accounts and having to own dinosaur stocks for measly dividends (AT&T, VZ, IBM, etc.), it’s refreshing to be able to earn rewards by lending and providing liquidity for stablecoins. Is there a risk? Yes.
Why I am earning yield on stablecoins
You don’t get returns without taking risks. I’d argue that keeping all money in savings is a risk considering that inflation is being reported at 5.4% year over year (meaning that it’s probably double that in reality). As much as I’d love to have all my extra capital earning the yields offered to stablecoins, I do refrain from overexposing myself to the crypto market.
One nice thing about blending savings between traditional instruments (savings accounts) and earning yield on crypto stablecoins is it can beat inflation! Currently, many chains have created incentive programs offering stunning returns.
I don’t expect these types of returns to last indefinitely. Therefore, I am seizing the day and graciously watching as my crypto rewards outpace my savings accounts weekly.
Because I am paranoid about having too much invested in a single platform, I diversify my holding in different places. I’ve written several times about how I use centralized finance platforms like Celsius, Nexo, BlockFi, and Voyager to earn up to 10% (BlockFi with the rewards credit card). These are easy to use, don’t require a separate wallet like Metamask, and you can even link them to your traditional bank account. You can read more about these here.
For bold investors willing to enter the DeFi universe, here are some places I am earning massive yields on my stablecoins.
Where I am earning my biggest stablecoin yields