How Crypto Exchanges (and Non-Custodial Wallets) Double as Savings-Account Providers
With the rise of stablecoins in recent years and more crypto exchanges offering lending and staking rewards, individuals can earn more money by holding funds on a crypto exchange rather than a typical bank.
It’s common to see annual percentage yields (APYs) of over 8% and, in many cases, >10%.
Best of all, you don’t have to use centralised exchanges. Automated market markers (AMMs) such as Aave allow you to lend and borrow Ethereum, ERC-20 tokens, and stablecoins (almost all of which run on Ethereum) via a non-custodial wallet.
However, there are important considerations to make before exploring these options.
Non-members can read the full story here.
A major caveat
Despite the higher interest rates on offers through these schemes, there’s usually a risk that stablecoins held in a wallet — particularly those you fully control by using an AMM or similar decentralised protocol — won’t be covered in the event of the loss.
Not even reputable centralised exchanges are covered by FDIC insurance for their stablecoin balances. Coinbase, one of the most regulated exchanges in the USA, let…
