Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Crypto platforms started to offer returns on holding & deposits, banks should be scared

Cryptocurrency Apr 24, 2021 05:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
Crypto platforms started to offer returns on holding & deposits, banks should be scared

The traditional profit-gaining approach in the cryptocurrency domain has remained largely around the appreciation of price. People hold and trade BTC so that they can benefit from the appreciation in the price of the asset. However, with DeFi platforms gaining traction, the paradigm is starting to shift.

Yield farming is becoming a common practice with many platforms offering the users rewards if they stake or lend crypto assets on the platform. Platforms like Compound Labs allow users to borrow and lend cryptocurrencies on rates that are determined by the algorithm that is running under the platform. With crypto yield farming, the returns are gained in the form of annual percentage yield (APY) and sometimes in the form of a new token.

The famous twins Tyler and Cameron Winklevoss are also launching a new service on their beloved crypto exchange Gemini that goes by the name of “Earn”. The idea behind it is the same, reward customer for depositing and holding cryptos. The Earn service allows the audience to deposit their holdings in the form of BTC and other cryptos into accounts that are interest-bearing. Earn promises up to 7.6% APY while another startup, BlockFi, is offering a massive 8.6% APY. The trend has penetrated in the market. Another such project that is currently offering returns on crypto holding is LCMS.

Bithumb Global recently announced a deposit and trading event for LCMS coin on its Twitter handle. The event is offering 20,000 USDT as the amount of the total reward. 6,000 USDT is allocated for people depositing and holding LCMS while 14,000 USDT is being dedicated for the trading of the same asset. The top prize for anyone in the event is 3,000 USDT which is then followed by rewards of the magnitude USDT 2,000 and 1,500 respectively for the 2nd and the 3rd place. The rewards do go up to people that lie in the range of TOP 500. However, to gain this reward, the users are expected to pass KYC2 verification. The event is coming close to its end as 6th April is the last day of this event. This is just another example of how the cryptocurrency-reward paradigm is shifting slowly to incentize people to hold and trade cryptocurrencies.

Savings in Banking vs Crypto Returns
The cryptocurrency world has emerged to rival a parallel that exists in the form of the banking system. Be it deposit or trading, banks have made themselves an essential part of people’s financial lives. One of the biggest advantages that banks grant to their users that no one else has been able to crack is giving returns on holding the money. Savings account are typically used by people to earn interest over their deposited amount. This incentivizes people to put their money in the banks as they expect a return. With cryptos, things have been different.

People have always been attracted to the crypto domain due to the price surges. Within a decade, bitcoin has jumped thousands of times attracting more and more investors. The 2017 surge of bitcoin made cryptocurrencies prominent in the eyes of the investors and the recent bull-run is the one that has made BTC a legitimate asset. Currently, the asset is being traded at a price point of $59,860 while it is expected to go further up soon. JP Morgan has adjusted its bitcoin price target to $130,000 as it is expecting strong institutional support moving forward. So traditionally, the kind of returns that people expect from cryptos come from the price surges. However, this only attracts only a certain segment of the investors.

To attract the risk-averse strata of the population, the need is to give people stable returns, just as banks give them with their savings accounts. This need is now being fulfilled by the platforms mentioned above. Take LCMS as a use case. To earn rewards on just a deposit and trade is a big incentive for people to come into this space. Once people step into its ecosystem, they are bound to learn about the platform as well. LCMS uses blockchain for customer database management, joint product development, and idea-sharing predominantly in the domain of food and cosmetics. LCMS coin the unit of value that is valid on the platform.

Profit Sharing – The Real Decentralization
The fact that platforms are now sharing profits with the customers is commendable. The entire idea behind the cryptocurrency world is decentralization and people-empowerment. Cryptocurrencies enthusiasts have always talked about breaking hierarchies and central authorities and bring people in the position of rewards and powers instead of milking them as users. This idea of profit-sharing lies exactly in line with the core philosophy of cryptocurrencies. Giving back to the people is what stands as the main theme. With such platforms like Compound, Earn, and LCMS in platforms giving back through staking coins or events, the banking systems are challenged more than ever.

Continue reading on BTC Peers

Crypto platforms started to offer returns on holding & deposits, banks should be scared

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email