how to earn interest on crypto

how to earn interest on crypto

in order to learn how to earn interest on crypto we must define a few terms first

what does Staking crypto means :

Staking, like many things in crypto, may be a complex or simple concept depending on how many levels of the understanding you want to access.

The major lesson for many traders and investors is that staking is a method of collecting rewards for holding particular cryptocurrencies.

Even if you’re just seeking to earn some staking rewards, it’s helpful to know how and why things work the way they do.

Because the blockchain puts your crypto to work, it earns rewards while it is staked. Staking-enabled cryptocurrencies use a “consensus technique” known as Proof of Stake to ensure that all transactions are validated and protected without the involvement of a bank or payment processor. If you choose to stake your crypto, it becomes a part of the process.

You can earn interest on crypto by lending or by staking

  • Lending your Crypto

with your Zengo account.  You’re effectively lending your crypto to Nexo*, a legal and registered financial institution that specializes in crypto lending and investments.

On a daily basis, the interest on your crypto is computed and added to your balance, giving you compound interest in the same currency you’re lending.

  • Staking your Crypto

Staking is a method of generating additional revenue by contributing to the network security of a proof-of-stake (PoS) asset.

By giving (delegating) your asset’s voting rights to a validator node, you boost the validator’s chances of validating transaction blocks and earning rewards.

They then distribute a portion of the prizes to their delegated tasks. ZenGo currently offers staking using Tezos (XTZ) through our partner Chorus One, however we hope to expand our staking assets in the future.

 

What is a crypto interest savings account?

ZenGo Savings is a service for anyone who wants to earn interest on their cryptocurrency.

Now in a few taps, you can earn daily interest and rewards directly through ZenGo. It’s probably the safest and simplest way to earn passive income in crypto.

Interest savings account: Crypto blasts past your bank account’s interest rates!

In 2021, inflation hit 6% in the U.S. and it’s even worse elsewhere. Banks are no help – your average savings account offers a tiny 0.06%. That’s not very zen if you ask us.

Instead, let your crypto work for you in a few simple taps, directly from your ZenGo crypto wallet. It takes seconds to get done, and no documents are required: This is by far one of the simplest and most attractive ways to get interest on your assets!

Crypto interest rates

the crypto interest rate at the time of this post: 3-march-2022

Getting interest on Bitcoin (BTC)

Bitcoin (BTC) is a decentralized digital currency founded in 2009. Learn more about Bitcoin’s history and purpose on our podcast.

When you deposit Bitcoin into your ZenGo Savings account, Nexo will lend your Bitcoin out to others who borrow it in return for paying you interest.

Your interest is calculated daily and will be deposited into your ZenGo Savings account on a daily basis.

You can withdraw your deposit or a portion of your deposit at any time, moving it back to your normal wallet.

Getting interest on Ethereum (ETH)

Ethereum (ETH) is a decentralized, open-source blockchain with smart-contract functionality: Some think of Ethereum as a distributed global computer. Learn more about Ethereum on our podcast.

Ether (also referred to as Ethereum) is the token native to the Ethereum platform.

When you deposit Ethereum into your ZenGo Savings account, Nexo will lend your Ethereum out to others who borrow it in return for paying you interest.

Your interest is calculated daily and will be deposited into your ZenGo Savings account on a daily basis.

You can withdraw your deposit or a portion of your deposit at any time, moving it back to your normal wallet.

Getting interest on USDC stablecoin (USDC)

USD Coin (USDC) is a stablecoin that tracks the U.S. dollar, and it currently runs on the Ethereum network.

When you deposit USDC into your ZenGo Savings account, Nexo will lend your USDC out to others who borrow it in return for paying you interest.

Your interest is calculated daily and will be deposited into your ZenGo Savings account on a daily basis.

You can withdraw your deposit or a portion of your deposit at any time, moving it back to your normal wallet.

Getting interest on Tether stablecoin (USDT)

Tether (USDT) is a U.S. dollar-denominated stablecoin.

Unlike cryptocurrencies like Bitcoin or Ethereum, which can see volatile price fluctuations, stablecoins track traditional fiat currencies, like U.S. dollars or Korean won at a 1-to-1 ratio.

When you deposit Tether into your ZenGo Savings account, Nexo will lend your Tether out to others who borrow it in return for paying you interest.

Your interest is calculated daily and will be deposited into your ZenGo Savings account on a daily basis.

again you can withdraw your deposit or a portion of your deposit at any time, moving it back to your normal wallet.

Getting interest on DAI (DAI)

DAI is a stablecoin that tracks the U.S. dollar, managed by the MakerDAO community.

When you deposit DAI into your ZenGo Savings account, Nexo will lend your DAI out to others who borrow it in return for paying you interest. Your interest is calculated daily and will be deposited into your ZenGo Savings account on a daily basis.

You can withdraw your deposit or a portion of your deposit at any time, moving it back to your normal wallet.

Getting interest on TrueUSD (TUSD)

TrueUSD (TUSD) is a stablecoin tracking the U.S. dollar built on the TrustToken platform and claims to be fully collateralized and transparently verified.

When you deposit TUSD into your ZenGo Savings account, Nexo will lend your TUSD out to others who borrow it in return for paying you interest.

Your interest is calculated daily and will be deposited into your ZenGo Savings account on a daily basis.

You can withdraw your deposit or a portion of your deposit at any time, moving it back to your normal wallet.

Getting interest on Nexo (NEXO)

Nexo (NEXO) is the native token of our lending partner Nexo.

When you deposit NEXO into your ZenGo Savings account, it will be lent out to others who borrow it in return for paying you interest. Your interest is calculated daily and will be deposited into your ZenGo Savings account on a daily basis.

You can withdraw your deposit or a portion of your deposit at any time, moving it back to your normal wallet.

Getting staking rewards on Tezos (XTZ)

Tezos (XTZ) is an open-source blockchain for assets and applications that evolves by upgrading itself.

Its native token is the tez (XTZ). When you deposit XTZ into your ZenGo Savings account, Nexo will stake your XTZ through our partner Chorus One.

For staking, there’s an initial waiting period of approximately 33 days before receiving your first reward payment.

After that, you should receive a reward payment approximately every 3 days which gets deposited directly into your wallet.

Getting interest on Chainlink (LINK)

Chainlink (LINK) is a cryptocurrency working with a global network of computers to provide reliable, real-world information to smart-contracts running on blockchains like Ethereum.

When you deposit LINK into your ZenGo Savings account, Nexo will lend your LINK out to others who borrow it in return for paying you interest.

Your interest is calculated daily and will be deposited into your ZenGo Savings account on a daily basis. You can withdraw your deposit or a portion of your deposit at any time, moving it back to your normal wallet.

Q: What are the risks associated with ZenGo Savings?
A: The answer depends on whether you are lending or staking your crypto.

Lending: We’ve partnered with Nexo, one of the world’s largest and most trusted lending institutions in digital finance. Nexo is licensed, audited, and insured, but because lending involves sending your crypto to a 3rd party, there are certain counterparty risks. We recommend doing your own research into the various aspects of counterparty risk before making any financial decisions. Learn more about Nexo here.

Staking: Since you don’t need to part with your assets in order to delegate them, your funds always remain in the safety of your ZenGo wallet. This means that validators do not have access to your funds, and you earn the rewards with no counterparty risk.

Q: How is my APY interest generated?
A: 
Your APY is not generated by yield farming or staking, but rather by lending your crypto assets to our partner Nexo. Nexo is licensed, audited, and insured, and maintains high levels of collateral to limit risks. Learn more about Nexo’s custody and insurance process here.