Gemini launches paid program called Earn
The Gemini crypto exchange has launched a new paid program called Earn, which offers up to 7.4% return.
The program, initially available to select Gemini customers, will roll out to everyone later this month, the exchange said on Tuesday. The program will be available in all 50 US states, including New York.
Gemini Win supports all 26 crypto assets supported by the exchange on its trading platform, including Decentralized Finance Coins (DeFi), such as Uniswap and Aave.
The highest yield (7.4%) is however only available on Filecoin. For the rest of the supported coins, the interest rate varies from 1.54% to 5.83%.
The most popular cryptocurrencies, bitcoin (BTC) and ether (ETH), each return 3.05%.
Gemini’s rival BlockFi, on the other hand, offers up to 6% interest rate on bitcoin deposits and 5.25% for ether deposits. BlockFi’s feature, however, supports limited coins and is not available to New York-based users.
Gemini Earn, on the other hand, appears to be riskier. “The loans granted under the Program are not guaranteed. You are exposed to the credit risk of the Borrower, and the Borrowers are not obligated to provide security to you or Gemini ”, read the terms of the program.
This means that users could lose all of their deposits if a borrower defaults.
“The Borrower is not obligated to retain or maintain any digital assets on loan from Gemini or any other account controlled by Gemini,” as per the terms. “Gemini will not be responsible for the digital assets once they have left Gemini’s custody. Loans are not insured by Gemini or any government program or institution.”
“We looked at institutional lending partners, such as Genesis Global Capital,” Gemini COO Noah Perlman told The Block, adding that these partners find borrowers and lend clients’ funds in return. an interest payment.
“There is a strong demand for crypto among institutional borrowers who use it to fund their operations and investment strategies, so they are willing to pay competitive market rates to borrow crypto,” Perlman said.
After the story was published, a spokesperson for Gemini told The Block that the exchange is reviewing the processes for managing collateral from lending partners and that lender loans are “sufficiently secured.”
“In addition, we will periodically conduct an analysis of our partners’ cash flows, balance sheet and financial statements to ensure the appropriate risk ratios and the sound financial condition of our partner,” the spokesperson said. “Our borrowers participating in the Earn program will always be fully disclosed to users so that they can make an informed decision to participate.”
The launch of Gemini Earn follows the credit card launch announcement last month. When asked if Gemini plans to become a full-fledged crypto financial services company like BlockFi and others, Perlman told The Block: “We will continue to provide a wide range of financial products that mix the offerings of traditional finance and the cryptocurrency industry. “
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