The cryptocurrency market is known for its tremendous volatility. Just recently, we saw Tesla revealing that they will no longer support BTC payments, sending the entire market into a steep downturn that wiped off over $400 billion from its capitalization.
Trading, while appealing, can also be devastating for the unaware, prompting many to seek more passive approaches at generating profits.
With this in mind, one of the more popular cryptocurrency exchanges, PrimeXBT, has taken advantage of an entirely new experience for users who have been starving for returns in traditional finance with their new covesting yield accounts.
What Are Covesting Yield Accounts?
First things first, it’s worth noting that in the current economic environment, investors are struggling to get a worthwhile return on their deposits, with most banks offering insignificant interest rates.
The nascent cryptocurrency industry attempts to tackle this challenge, especially amid the conditions of a wild bull market.
Staking products allow for a highly variable rate of return on crypto-assets that are idle – this is commonly referred to as APY. Blockchain-based solutions give returns to those who lock up cryptocurrencies for a period of time. Typically, the rates tend to improve if the period is longer and if the amount of the staked asset is higher.
Citing huge demand, PrimeXBT reveals the latest development from their covesting team – the covesting yield accounts.
They work exactly as the name suggests – the services generate a return on the user’s cryptocurrency holding instead of letting them stay idle. They are able to transfer it to the specific Covesting Yield Account and get a variable interest depending on the asset, the amount, and the staking period.
Planned for Q3 2021
The team revealed that Covesting Yield Accounts are planned for the third quarter of 2021. However, those who join the waiting list earlier will receive a 1% bonus on top of the APY rates that will be set.
To benefit from the promotion, users have to register on PrimeXBT, visit the covesting tab, and join the waitlist on the Yield Accounts section.
A Gradual Rollout
The rollout is designated to roll out in two separate phases. The first one is scheduled for May 2021 and will see staking added into the platform’s capabilities. COV token holders will be able to earn rewards based on membership status, where elite members will see the highest APYs.
The second phase will come in Q3 2021, and it will introduce competitive APYs with the Covesting Yield Accounts. Those who stake COV tokens will also get an APY boost and be able to earn as much as twice the standard rates.
In addition, Covesting participates in a program where COV tokens are bought from the market with the aim of reducing the supply. This comes as an additional benefit for COV token holders.
Where Does the Interest Come From?
Put simply, the assets that users stake will facilitate a variety of market activities. Basically, they will authorize their funds to be used for lending or for market-making activities.
In return for this authorization, users will receive an interest payment for it. The lenders can be various participants in the market, such as institutional market makers, lending platforms, trading platforms, and so forth.
In this sense, a Covesting Yield Account is more or less similar to a traditional bank savings account. The minimum threshold will be set to $100 worth of idle cryptocurrency assets, and the interest will be paid on a daily basis.