Crypto exchange Gemini has launched a new earning program called Earn, which provides up to 7.4% returns on crypto assets.
The program, initially available for certain Gemini customers, will be available to everyone in early February, the exchange announced on Tuesday. The program can be used in all 50 states of the USA, including New York.
Gemini Earn supports all 26 crypto assets that the exchange supports on the trading platform, including decentralized finance (DeFi) cryptocurrencies such as Uniswap and Aave.
However, the highest yield (7.4%) is only available in Filecoin. The interest rate for the rest of the supported cryptocurrencies ranges from 1.54% to 5.83%.
Bitcoin (BTC) and ether (ETH), the most popular cryptocurrencies, will each bring 3.05% returns.
Gemini’s competitor, BlockFi, offers interest rates of up to 6% for bitcoin deposits and 5.25% for ether deposits. However, the feature of BlockFi supports limited coins and is not available for users located in New York.
Gemini’s offer looks more risky. “The loans given through the program are unsecured. You may be exposed to the borrower credit risk and Borrowers do not have to provide collateral to you or Gemini, ”he has a remarkable explanation.
This means that users can lose all their deposits if a borrower goes into default.
According to the Conditions, “The Borrower is not required to keep or maintain the Loaned Digital Assets with Gemini or any other account controlled by Gemini.” “Gemini will not be responsible for any Digital Assets after leaving Gemini’s custody. Credits are not insured by Gemini or any government program or agency. ”
BlockFi’s offer includes both secured and unsecured loans, depending on the terms of service.
Gemini COO Noah Perlman told The Block, “We looked at corporate lending partners such as Genesis Global Capital,” adding that they found debtors and lent clients’ funds in exchange for interest payments.
“There is a high demand for crypto among institutional borrowers who use it to fund their operations and investment strategies, so they are prepared to pay competitive market rates to borrow crypto,” Perlman said.
The Gemini Earn launch came after the exchange’s credit card launch announcement last month. When asked if Gemini is planning to become a full-fledged crypto finance services company like BlockFi and others, Perlman told The Block: “We will continue to offer a wide range of financial products that blend offerings from the traditional finance and cryptocurrency industry.”