Why CoinFLEX Offers the Best APR Returns on its Stablecoin, flexUSD, Compared to the Most Popular Savings, Staking, and AMMs.
All content expressed is purely for entertainment and educational purposes only. This is not financial advice. Do your own research before investing or trading.
Emotional self-regulation is a virtue that is beneficial in all areas of life. In trading, this is particularly important. Humility and stoicism are important tools in an active trader’s arsenal to successfully navigate the choppy and volatile crypto markets. While humility is certainly important, at CoinFLEX we can’t help but show pride in the products we’ve developed, especially in our areas of passive income.
For those who aren’t quite there in seeing consistent gains while trading or investing, don’t beat yourself up, as we have the solution for you in the form of high yield passive income. Sorry for FLEXing, but our products offer the best returns for passive earners compared to other staking, saving, and AMM options at different exchanges. If you’re interested in receiving the highest returns with little to no work, then find out below how we out compete the rest of the market in earning passive income.
What Options Do I Have When Earning Passive Income?
As mentioned above, there are multiple ways to earn passive income. These include Staking, Saving, and AMMs. Although there is the argument that AMMs are not passive income, it really depends on what strategy you use. Exchanges like CoinFLEX and Uniswap V3 provide the option to earn trading fees at different price ranges, which would require a slightly more active approach. However, this article will classify AMMs as passive income, as modifying your own price ranges is an “active” feature built on top of a passive income earning base. Let’s first begin with staking and saving.
Why is Proof of Stake Important to Staking?
Before we can discuss the topic of staking and saving, we need to understand some prerequisite knowledge surrounding the concept of Proof-of-Stake, or PoS. PoS is the most recent out of the two processes in which a blockchain can verify transactions and ensure the network is running properly. The other being Proof-of-Work. This process is also known as reaching consensus. Once consensus is reached a transaction is then permanently added to the blockchain and can’t be modified. Participants in the network are able to earn rewards by offering their crypto assets to help run the network by creating blocks.
This is beneficial for those who are not active traders, but want to increase their earnings passively. PoS works by choosing validators of the network in proportion to their quantity of holdings in the associated cryptocurrency. Another way to earn passive income is through users delegating their assets into saving accounts rather than staking them.
What’s the Difference Between Staking and Saving?
Staking allows for much higher yield than saving. For example, you can see average yields between 5-15%. Some coins or tokens however can offer extremely high yields, which can reach into high double digits or even in the hundreds of percentages. Furthermore, your assets can grow significantly in a bull market while locked in staking, which will also increase the amount you can receive in rewards. This implies the obvious risks that if the market decides to tank, so will the value of your assets. You won’t be able to sell them as they are locked up and as a result could lose money on your investment if your asset price falls below your buy price.
Savings on the other hand are a safer option. Because you are offering stablecoins, it is highly unlikely they will fluctuate in price thanks to their use case. This is assuming the stablecoin you have in savings does not experience any issues such as what has recently occurred with USDT. You will need to ensure the stability of your stablecoin extends more broadly to its safety as a company rather than just its use case. Is the company well regulated? Is it actually backed by the collateral you exchanged it for. There are concerns with USDT for example, as 75% of its reserves are considered “cash equivalents”, rather than physical fiat.
The issue here is how quickly these cash equivalents can be exchanged for actual cash. The relative safety compared to staking however comes at a price. In this case the cost is low APRs. So essentially, what you need to decide is whether you prefer higher risk higher returns via staking, or lower risk lower returns via saving.
What does CoinFLEX Offer?
At CoinFLEX, we don’t offer staking or saving because we offer better services for passive income. These services don’t stop you from taking control or custody of your assets. One of our best products for those eager to engage in passive income are with our flexUSD and flexAssets. flexUSD is a multi-yield bearing stablecoin and is the first stablecoin that pays interest at the base level. All stablecoins today pay zero interest from the issuer of the stablecoin. To earn yield or interest on your stablecoins, you need to put them to work by lending them directly to someone else, yield farm, or use the stablecoins as collateral to trade basis on derivatives products.
While most staking or saving products require the lender to patiently wait between 7-90 days without seeing returns or using their crypto, CoinFLEX automatically rewards flexUSD holders every 8 hours. You can earn this interest regardless of where you hold your crypto, whether that be sitting in your wallet off-chain, in a DeFi app, or in a different exchange. You can experience these benefits all while still being able to actively trade, if you so please.
Thanks to our transparency page (https://coinflex.com/transparency/flexUSD) you can see when APY spikes occur. This can allow users to take advantage of rates by choosing how much they want to allocate capital holding flexUSD at a given time. For example, below we can see a large spike in flexUSD’s APY.
The spike began at 12:00 29th June and peaked at 28.15%, rates returned to normal at 20:00 30th June with the most advantageous hours being between 20:00 29th June and 04:00 30th June. If you had some coins in an asset that is experiencing low volume or price fluctuation, you could allocate some capital into flexUSD and know for certain you’ll see returns on your investment. These 8 hour duration periods can sometimes see spikes up to 80+%.
These 8-hour spikes have seen incredible triple digit APRs as seen on April 19th 2021, where the APR hit 125%.
The record APR was hit on 2nd of that month with a phenomenal 143.82%!
Such advantages allow crypto investors to earn passive income, with the only risk being CoinFLEX folding as a company – something that is extremely unlikely and rare in the crypto space. Enough FLEXing on our side, lets see how we compare to other companies.
No comparison would be complete without taking on the Goliath of all crypto exchanges – Binance. Binance is successful in offering an enormous array of financial services and an impressive list of crypto tokens to trade from. However, quantity does not equal quality. When entering their “earn” page, we can see Binance offers an impressive five different options you can choose from to earn passive income. This includes:
- Savings: which offers stable earning at zero fees
- Locked Staking: which offers low entry barriers at 10 USDT and provides “higher rewards and additional benefits”
- Launch pool: which offers staking for new tokens
- BNB Vault: which allows your to “leverage the best assets of launchpool, savings, and DeFi Staking”
- ETH 2.0 Staking: which they argue offers less risk and high yield for you ETH
As we can really only accurately compare savings and staking, and to prevent this article from being too long, we will not compare Launch pool, BNB Vault, or ETH 2.0. Let’s begin by breaking down what Binance offers and then explain why CoinFLEX does it better. In savings, you have the choice of “flexible” and “locked” savings. When you transfer your assets from your spot account to your flexible account, it is stuck there until you decide to redeem it, which then transfers back to your spot wallet.
When looking at the returns however, it’s not very impressive. For example, at the time of writing BTC only offers a 0.58% 7-Day APY while USDT offers a 1.43% 7-Day APY. Locked savings is certainly better, as it offers annualised interest rates for BTC and USDT at 7% and 4.24% respectively. This however also requires you to lock it up for a duration period at a minimum of 7 days, and as high as 90 days. The longer your lock period is, the higher your profits.
Locked staking is slightly different from savings in that Binance locks your assets on a PoS blockchain. The rewards are also slightly higher and the vast majority of duration periods start at 30 days. Locked staking offers two types of services. One is DeFi Staking, which offers low returns on coins and tokens with an estimated APY between 1.73% for ETH and as high as 10% for HARD for flexible lock. Locked Staking offers APYs as high as 33% to some coins, however over half the coins they offer have estimated APYs below 10%. Only 5 assets out of the 64 they currently offer have estimated APYs above 20%.
To compare Binance to CoinFLEX on a broader scale, CoinFLEX is shifting towards decentralising custody and clearing, while Binance will remain highly centralized. The problem with centralized power structures is that they always run the risk of corruption, mismanagement or regulation. This essentially will bring the entire crypto down the TradFi route. Crypto’s aim is to be an alternative to the TradFi system, not to become it.
Furthermore, Binance Smart Chain runs on a centralized platform. This will render any DeFi product useless as you cannot build a decentralized product from a centralized base. CoinFLEX on the other hand uses smartBCH, which is a smartchain run on the Bitcoin Cash blockchain, making it truly decentralized.
Let’s move on to Celsius Network, which is another platform that offers similar services to CoinFLEX. According to Coingecko, Celsius Network is a person to person (P2P) borrowing and lending for crypto assets. Borrowers offer their collateral in exchange for fiat currencies at a small interest rate. This allows them to keep their crypto without needing to sell it. Lenders are rewarded with interest for depositing their crypto on the platform. Reward accrual period is between Friday 05:00:00 UTC to Friday 04:59:59 UTC, with the reward calculation price snapshot at Friday 05:00:00 UTC. Reward payments happen on Monday at no set time. CoinFLEX delivers rewards every 8 hours.
Celsius also offers very low rewards. At the time of writing you can only earn 3.45% APY on BTC, 4.93% on ETH, and 4.41% on BCH. Again, not great compared to CoinFLEX’s 5-10% APY (currently 7.43%) and you still can’t even use your assets. According to a Celsius Medium article, the CEL rate in APY for BTC is between 4.56-6.2% APY for less than or equal to 1 BTC, based on your “loyalty level”. More than one BTC you will learn this “base rate” x your “loyalty level bonus”. Dangers to incentivized token offerings. Furthermore, Celsius requires KYC while CoinFLEX commits to crypto’s ideological foundation of privacy.
The argument that without KYC will lead to fraud is also not valid, as those who run TradFi financial institutions simply do it themselves anyway. For example, in December 2012, HSBC received a $1.92 billion USD penalty for setting up offshore accounts for drug cartels and laundering $881 million USD. If criminals wanted to launder money they’d just do it through TradFi services. Other protocols like COMP are essentially the same with similar returns.
Finally we have Uniswap V3, which is a decentralized crypto exchange. It’s first version was an automated market maker. V3 is similar to our AMM+ in that the AMM provides concentrated liquidity, which essentially allows liquidity providers to choose which price range they want to receive trading fees from.
The second integration is a multiple fee tiers, which will compensate users depending on how much risk they take. CoinFLEX outperforms Uniswap as we have an orderbook, which allows customers to see where people are buying and selling. This will make their strategies more accurate because they will be able to narrow their ranges, making capital even more efficient and encouraging higher returns.
Furthermore, our prices are based on the perpetual futures market, meaning we can also leverage. As our leverage offers up to 10x leverage, users can make 10x the returns at CoinFLEX’s AMM+ with the exact same strategy they use on Uniswap V3. While Uniswap V3 offers buy and sell orders, CoinFLEX’s AMM+ also offers “neutral” as a third option. This allows users to earn fees whether the price rises or falls. Users will have to exit their position at the exact same price they entered however to prevent permanent loss from occurring. Finally, CoinFLEX’s AMM+ also allows you to choose your own collateral, rather than being forced to use the pair you want to trade with.
We can see that CoinFLEX is the place to be for earning passive income. We offer For saving:
- We offer far higher returns compared to services that requires staking or saving
- You can use your flexUSD to trade or use in the AMM+
- We don’t require KYC, meaning you have increased privacy
- Our rewards accrue every 8 hours.
- Our orderbook allows you to see the price range
- We’re leveraged upto 10x
- We offer a third “neutral” trading strategy
- You can choose your collateral
The biggest and most popular exchanges does not mean they are the best. For the best and highest returns and best products for passive income, head on over to https://coinflex.com/.
Author: Adam Diaz