Crypto.com Earn will cap and reduce interest rate in April
Crypto.com has been my top recommendation for anyone starting out with crypto investment. This is because their Earn programme has the highest interest rate for their deposit, especially for stablecoins. But this is about to change starting from April 4th, 2022.
👉🏻 You can also watch this video.
The Changes
They announced their changes. Don’t be fooled by their summary, which mentioned a minor increase for a few tokens. The 2 major changes are:
- Deposits earn full interests capped at $30,000, thereafter interests are halved
- Stablecoins interest rates decreased by 2%
1. Cap affects the whales
If you’re a small investor with less than $30,000, then you’re not much affected as you continue to enjoy the full interest rate.
If you have more than $30,000, then the interest rate will be halved!
Rich investors like him will be pissed.
What a joke again. I just upgraded to Obsidian to have higher Max Earn limit and now the real max Limit is actually 30k 😂😂😂 GG. #cro
To get Obsidian card, he has to stake $400,000. That will increase his deposit limit to $2,000,000.
But with the full interest rate applies to the first $30,000. Which means his remaining $1,970,000 will earn half of interest rate.
2. Interest rate reduced
They also adjusted some of the interest rates, and the major change is the reduction for stablecoins (USDC, USDT etc).
If you have $400 Ruby Steel and below:
| Term | Before | After | Change |
|---|---|---|---|
| Flexible | 6% | 3% | -3% |
| 1-month | 8% | 6% | -2% |
| 3-months | 10% | 8% | -2% |
If you have $4,000 Jade Green and above:
| Term | Before | After | Change |
|---|---|---|---|
| Flexible | 8% | 4% | -4% |
| 1-month | 10% | 8% | -2% |
| 3-months | 12% | 10% | -2% |
The other changes are minor. For certain term and CRO stake, ETH +0.5%, DOT & MATIC +1%. Check this you’re interested.
Why make these changes?
Earning high interest rates from deposit is legit, because borrowers will pay even higher interest rate.
But when borrower is lesser than depositors, then the business is not sustainable.
Rich whales probably deposit way too much, thus further stressing the lending business. A cap will affect these whales – don’t let the rich get richer!
Crypto.com interest rate for stablecoins is also one of the highest. Even with the reduction, they are still pretty high. As a comparison (as of Mar 2022):
Anchor is exceptional, for now, because they are heavily subsidising being a new stablecoin. Their high interest of 20% will last for ~10 months before it will have to drop.
For investors, earn while it is still high.
