Paging Crypto people, Blockfi pays 8.6% interest on USDC - what’s the catch?

No dick measuring- I keep a significant sum of money at Blockfi.

It is not FDIC insured like the first 250k in your bank account.

95% of funds are cold stored with Gemini (winklevoss boys). They have incredible security and undergo soc 2 audits. Gemini is also insured against loss.

They operate just like any other traditional bank where they engage in risk activities to generate profit. Here's the difference.

Instead of JP Morgan making 17% on your assets then paying thousands of staff and putting their name on class A buildings then giving you the .05 % crumbs. Blockfi operates virtually with a better Tech stack and splits the profit with you.

They have never had a loan loss to date. Their primary functions are loaning money to institutional traders in over collateralized situations. They initiate margin calls before things get close to costing them money.

Would I park 100 percent of my wealth there? frick no, but I would never put 100 percent of my wealth anywhere!

One other item of note is they can change the interest rate every month although usdc has been 8.6% for some time.

Good Luck

yea I've been doing this for awhile although I'm mostly bitcoin and not usdc or stablecoins. people think I'm crazy when i tell them about it and possibly it's a bubble? but I haven't had any issues

in general id say blockfi is very safe but i suppose you never know

i also earn interest at nexo, if you wanted to diversify your holdings a little bit

You’ll need to choose the asset you want to hold and I believe they can only handle $500ach deposits at a time. I think per day but would need to confirm. USDC and GUSD are stable coins and pay the most interest . If you want to do it quicker and in one fell swoop you could deposit to Coinbase and buy USDC then send to BlockFi but you will lose some money in trading and withdrawal fees

I would be hesitant to recommend this to anyone that does not already have some understanding of crypto assets

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So I’m considering moving my savings account from discover which pays .5% over to BlockFi USDC. They say they are paying 8.6% with no minimum and no maximum.

Furthermore, wouldn’t this be a too-good-to-be-true place to park your retirement asset that you wanted to draw an income from?

What am I not seeing here?

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Any chance this is a Ponzi scheme? It seems Bernie Madoff did something similar by paying high interest rates. He used new investments to pay existing investors.

Buy Polkadot on Kracken and stake it. Earns 12%, and can be unstaked at any time. Polkadot up 212% just this month. I’ve done this, and it’s worked out well for me.

would love to throw some extra cash in something like this and earn that kind of rate but of course its asking for SSN...you guys arent worried about giving your social security number to this?

If it sounds too good to be true it probably is

you're going to be really in disbelief once your local chase bank starts doing it