Did you know that you can earn interest on your cryptocurrency. And did you know that you can earn way more interest than any bank. Dharma is a brand new app that makes earning interest on stable coins super easy. In fact you could be earning up to 7.4% APR on your crypto from anywhere in the world.
In this post I'm going to share how you can get started earning interest on Dharma.
Earn interest on Stablecoins
Stable Coins are cryptocurrencies that are designed to be pegged to an underlying currency. Dharma works with two stable coins – USDCoin and Dai. Both of these coins are pegged to the USD. So 1 USDCoin = 1 USD. And 1 Dai = 1 USD. Dharma works with the compound protocol. Compound is quite a complicated concept, but basically it allows people to borrow cryptocurrency. They use their own crypto as collateral so as a lender you're never really putting your money at risk. Dharma basically makes the lending process automated. As soon as you transfer money into Dharma it starts earning interest. They handle everything behind the scenes.
Why I love Dharma
I love innovative financial products, and Dharma is definitely innovative. Here are some of the reasons I love it:
- Start Earning Interest as Soon as you Transfer – Like literally as soon as you transfer. The interface is really clever, it basically shows your money growing in real time.
- It's built on solid technology – The cool thing about Dharma is that its built on solid tech. It's uses the blockchain and smart contracts. So your funds are never transferred to any individual who can just run off with your cash. Even if Dharma was hacked you wouldn't lose your funds – your keys are stored on your device not in the cloud.
- It's backed by some of silicon valleys biggest investors – Dharma is backed by investors such as YCombinator and Polychain Capital.
- You're making use of Compound – compound is a global network of borrowers and lenders. Every loan is over-collateralised and secured by smart contracts. Compound is really cool tech that has been a bit too complicated…until Dharma!
- You can transfer in and out at anytime – your funds are never locked away. You can transfer in and out just like a bank account. Both USDCoin and Dai use the Ethereum Blockchain. Which means that transfers happen within 30 seconds or so.
- No transaction Fees – None. Dharma may look at adding a % fee in the future. But right now, you keep 100% of the interest generated.
- No browser extensions, no downloads – It's all web based – and all the code the touches your coins is open-source and has been vetted by security experts.
- It works anywhere – no matter if you live in Australia or Japan, Sweden or Mexico – you can earn interest on USD pegged coins. So you can take advantage of the stability of the USD and earn interest on it, from anywhere in the world.
How I started earning interest on Dharma
So I already had some Dai stored on Coinbase. You'll need a Coinbase account to login to Dharma. But you don't need to have bought USDCoin or Dai through Coinbase. You can send it from any wallet. So all I had to do was login through Coinbase (similar to how you login using Twitter or Facebook on third party apps), and then I sent some Dai to the address that was shown. Within a minute the Dai was in my Dharma account and earning interest. It really is that simple.
How you can earn interest on Dharma
- Create a Coinbase account here
- Buy some Dai or USDCoin on Coinbase (you can use any exchange)
- Sign up to Dharma here
- Send it to the address in your Dharma account (its the same for both Dai and USDCoin as they both run on Ethereum)
- You'll start earning interest instantly
It's kind of addictive staring at the screen and watching the numbers increase. But remember you're not going to get rich overnight. You'll be earning around 4-7% interest per annum.
You may as well earn interest on your Dai or USDCoin
If you have some USDCoin or Dai sitting around, then you may as well earn interest on it. The compound network is built so there is very little risk of you losing your money. I would say it's similar to a bank collapsing. It's possible but highly unlikely. So instead of just storing your stable coins in a wallet, why not store them using Dharma.
And because Dharma uses stable coins, you don't have to worry about the price of crypto going up or down. Both the coins are pegged to the US dollar.