How to Earn Interest with Crypto

Historical CD rates, courtesy Bankrate

How to Tell Whether a Crypto Interest Rate is “Real”

You’ll see all kinds of crazy interest rates on crypto sites. 10% APY. 100% APY. (This means you’d double your money after a year.) We’ve even seen claims of 12,000% APY (for a limited time only).

Current interest rates on top tokens (see our DeFi Interest Rates page)

Three Ways of Earning Interest on Crypto

1) Lending. This is the most common method of earning interest on your crypto investments: loaning your crypto to other people who can borrow it. You never see these people: it’s all handled through online lending platforms.

As the lender, you just keep earning interest. This all happens behind the scenes.
To loan your crypto, you just switch on the “Collateral” slider. It’s that easy.
Sample rates for staking with BNB. (Real-time stats here)
The percentage at left is sample APYs you’ll earn from contributing to these lending pools. The number at right is how much money users have already locked up in these pools. (Real-time stats here)
As a LP, you’re providing the crypto for the trade, and earning “interest.” (Courtesy Uniswap)

Yield Farming: Harder than Regular Farming

All these strategies are sometimes called “yield farming,” or hopping around from platform to platform, constantly chasing the highest interest rates. Between the research required, the sky-high fees, and the tax and accounting headaches, this is rarely worth it. It’s easier to stick with one interest-bearing platform for the long term.

Download Our Crypto Interest Rate Calculator

We’ve put together a crypto interest rate calculator, which can give you a rough estimate of how much you’ll really be earning with that too-good-to-be-true crypto APY. It figures in length of time, gas fees, and tax liabilities, with easy-reference numbers that you can customize. Blockchain Believers can download it here.

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