Earn Interest on Stablecoins - Anchor Protocol Alternatives - Business 2 Community

Anchor protocol is a popular platform where investors earn 20% interest on stablecoin TerraUSD (UST), recently dropping to 19.5%. It’s expected to drop to 18% in April 2022 if the yield reserve is net negative, and in the long term potentially a more sustainable interest rate of 15% per annum.
Bybit also pay 18% APY on UST. In this guide we’ll review how to earn interest on stablecoins at some Anchor Protocol alternatives that are easy to use for beginner crypto investors. You might also be earning interest on Anchor Protocol now but want to diversify your portfolio across a second crypto interest platform.
These are our picks for the best Anchor Protocol alternatives to earn interest on stablecoins. Each have their advantages and disadvantages, depending on your crypto interest goals for 2022 and your risk tolerance.
Who pays the most interest on stablecoins depends on how much you’re willing to invest, and risk tolerance.
Bybit stands out with a 50% higher yield than its nearest competitor in our list, Aqru, however you may want to split your funds up on several platforms and diversify into earning interest on cryptos alongside stables.
Currently 120,000 users stake crypto on Bybit according to the platform. UST has the highest stablecoin interest rate on the exchange. It started at 20% and has now been lowered to 18%.
Where to earn interest on stablecoinsWhere to earn interest on stablecoins
Stablecoin interest rates on Bybit exchange
USDT has an APY of 3% and USDC pays 2.5%.
The minimum UST stake amount is 50 UST and the maximum 500,000 UST. An example stake of 10,000 UST would yield $4.93 per day, or $1,800 annually.
Bybit uses a flexible staking system where yield is distributed after a one day period (24 hours). You can repeat the process every day.
How to earn interest on stablecoinsHow to earn interest on stablecoins
How to earn interest on stablecoins on Bybit
The APY on other stablecoins is on the low side compared to competitors. It’s also not the best platform to earn interest on Ethereum or Bitcoin with 1% and 0.88% APY on those.
If you want to earn interest on stablecoins apart from UST or on other crypto assets, we recommend opening an additional account at one of the crypto interest platforms below. Bybit is also not yet available in the US.



Cons




Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection.
Aqru.io supports USDT, USDC and DAI for daily interest payments of 12%, as well as also recently partering with Maple Finance to offer USD Maple at 12%.
As soon as you open an account you’re credited a free $10 in USDT to test out the platform.
How to earn interest on stablecoins AqruHow to earn interest on stablecoins Aqru
Stablecoin interest platform Aqru
Rather than needing to stake every day like Bybit, your Aqru account accrues stablecoin interest continually with no input from you. Interest payments are sent to your balance daily so you earn compound interest on your growing capital.
The minimum deposit is $100 or equivalent in GBP or EUR. There are no minimum lock-up periods – you can uninvest and withdraw at any time.
An example investment of $10,000 held in stablecoins would earn $3.29 a day.
Unfortunately Aqru is also not currently available in the United States, however Crypto.com and BlockFi are – see our reviews of those platforms below.



Cons




Cryptoassets are a highly volatile unregulated investment product.
American users are currently accepted on the Crypto Earn program and can use the app but not the exchange platform. Send crypto you already bought elsewhere on a platform like eToro to yourself on this platform to start earning crypto interest.
The Crypto.com stablecoin interest rate is up to 10% although it does require lockup periods of three months at a time and staking $40k in Cronos (CRO), the native token of the platform. CRO has been in an bullish uptrend however so that bet might pay off.
Crypto Earn programCrypto Earn program
Crypto Earn program
Its Crypto Earn program supports earning interest on stablecoins including USDT, USDC, TUSD, DAI and others.
You can also take out crypto loans on Crypto.com using your crypto as collateral. You can be lent up to 50% of the total value of your crypto holdings.
An investment of $10,000 held in stablecoins on Crypto.com would earn $2.74 a day.



Cons




Cryptoassets are a highly volatile unregulated investment product.
BlockFi came under SEC attention in the US – common for cryptocurrency platforms and projects – and was allowed to continue operating, which bodes well for the increasingly popular industry of earning interest on stablecoins and cryptos.
In operation since 2017, it’s established a good reputation as a crypto interest account. One disadvantage is the yields are subject to tiers, for example any stablecoins in value over $20,000 have a lower yield of 7%. Up to the first $20k the APY is 8%.
BlockFi stablecoin interest ratesBlockFi stablecoin interest rates
BlockFi stablecoin interest rates
Like Crypto.com, BlockFi is also a crypto lending platform on which you can take out crypto loans. Its LTV ratio is also 50%. The APR can be as low as 4.5%.
Investing $10,000 in stablecoins on BlockFi would generate a yield of $2.19 a day.



Cons




Cryptoassets are a highly volatile unregulated investment product.
You may have come across Tether (USDT) if you’ve ever made a trade on a crypto exchange – the first ‘stable coin’ in crypto history, pegged to the value of the US dollar. So 1 USDT = 1 USD, approximately, without volatile fluctuations like other crypto coins.
When people sell cryptocurrency on an exchange for USDT, it works like moving their crypto into cash, only faster than sending it to a bank and then back onto the exchange the next time they want to buy crypto.
Technically you are swapping your crypto for another crypto, but a stable one so you are still realising your gains or losses and locking in the current valuation of your crypto holdings at the market rate.
Tether price chartTether price chart
Tether price chart over the last year
Tether is owned by the same owners of Bitfinex exchange, so you may have come across it on there where many of the best altcoins can be traded on USDT pairs. Some other exchanges only have USD pairs and other currency pairs, i.e. trading against fiat money.
USDT is common on Binance, the highest volume trading exchange.
Many crypto platforms also now offer crypto lending services to stablecoin holders, allowing people to earn passive income in the form of stablecoin interest rather than just holding it with no benefit. Some focus on being crypto interest accounts, and others are also major crypto exchanges.
Crypto.com is popular for earning interest on stable coins and many other cryptos. Bybit is lesser known but has a good reputation.
Tether has the largest market capitalization of $81.9 billion. After USDT the other top stablecoins include:
These are the most commonly used stablecoins. Coingecko also ranks Magic Internet Money (MIM) and Frax (FRAX) highly.
Coinmarketcap.com lists 75 stablecoins. By some counts there are over 200 active stablecoin projects. Together they process more volume than some payments platforms in traditional finance, such as Venmo.
Stablecoin price chartStablecoin price chart
Stablecoin price chart (USDT)
Some are pegged to the price of Gold per ounce for example Tether Gold (XAUT), which traders can trade Gold perpetual futures against on FTX exchange.
There are many crypto savings accounts that support earning interest on stablecoins. We reviewed four popular Anchor Protocol alternatives in this guide, and there are many others including Nexo, Celsius, Hodlnaut and YouHodler. Binance also supports Tether interest.
Compared to earning around 0.05% interest in a savings account with a high street bank and losing money to inflation, stablecoin platforms are very appealing to investors, and the high yield makes up for what most consider a low risk of the major stablecoin projects somehow going bankrupt or imploding if its turns out they don’t have cash reserves.
The lowest risk platform is debatably Coinbase as it is a trusted exchange globally, however we didn’t include it in this guide as the Coinbase stablecoin interest rate is only 0.15%, on either DAI or USDC. It does offer 5% APY on Cosmos (ATOM) however if you want to hold cryptocurrencies as part of your portfolio.
FCA regulated crypto platform eToro currently doesn’t support stablecoin interest but does offer Ethereum staking, alongside Cardano staking and Tron staking rewards.
Many investors open several accounts on different crypto exchanges and crypto lending platforms to split up their funds rather than keep all their eggs in one basket and take advantage of the various promos and bonuses. Aqru for example offers a free USDT to test out the platform.
Bybit is a viable alternative to Anchor protocol offering a simliar high yield on TerraUSD and also supports DeFi mining and Dual Asset mining. If you’re in the US, Crypto.com is the best place to earn interest on stablecoins as it accepts American investors.


Cryptoassets are a highly volatile unregulated investment product.
Since it’s a simple to use crypto exchange and keeps your trading and crypto interest in one place, we recommend using Bybit or the Crypto.com exchange
Create an account, verify it (to enable a higher daily withdrawal limit), and buy USDT on the Bybit directly or send USDT to yourself on there, or another crypto like BTC that you bought on an exchange like eToro to exchange for USDT. Spot trade this on the platform for UST. Then click ‘Earn’ and ‘Flexible Savings’ in the navigation menu. You’ll see their current stablecoin interest rates, at the time of writing that’s 3% APY on USDT and 18% on UST. Select ‘Stake Now’ in the UST section then enter your amount to stake. Your daily yield will be displayed.
Most Anchor Protocol users consider it safe however it can be confusing for beginners, so we listed in this guide some more user-friendly platforms such as Bybit exchange which has a good reputation and hasn’t been hacked. BlockFi has come under SEC attention and not been shut down.
If the APY on Anchor Protocol continues to go down in 2022 you might consider trying Bybit which currently offers 18% on UST. It may also go down on Bybit however – previously Bybit paid 20% interest on UST. Aqru has the least terms and conditions however is a relatively new crypto interest platform with a small Reddit presence so far.
In early 2022 DeFi and Web 3.0 writer @Route2FI on Twitter wrote a list of platforms to earn interest on stablecoins – Abracadabra that offers 40 – 120% APY, Hundred Finance with 22 – 37%, Platypus with 20 – 35%, Spectrum bPSI with 34%, Orion with 12 – 20%, Yearn with 16 – 18%, Trader Joe with 27%, and Revenant / Reaper with 67% on cUSD, Celo Dollar. However the higher the stablecoin interest rate, the more risky the platform tends to be. Do your own research and don’t go ‘all in’ on one crypto interest platform. Browse Reddit for user feedback.
Early in Tether’s history during the 2017 crypto bull run there were concerns it was not backed by cash reserves and could therefore implode if everyone tried to withdraw at once, if it lended out more than it was backed by. Those concerns have now been allayed and Tether still operates five years on. Also that is what banks do anyway under the fractional reserve banking system – only a fraction of bank deposits are backed by actual cash on hand and available for withdrawal. This theoretically helps to expand the economy by freeing capital for lending. A ‘run on the banks’ situation is rare. A similar effect is seen in crypto where when the Tether printer prints more USDT, the Bitcoin price usually pumps, and it isn’t a cause for concern for most investors. Smaller stablecoin projects than Tether that haven’t stood the test of time however might come with more risks.
  This article was written for Business 2 Community by Matt Williams.
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