6 months ago I committed some of my crypto assets in my first CredEarn program. The original aim of this blog was to do a progress update every 2 weeks at the start dates for new programs. Eventually I found that there wasn’t much to update, so I decided to stop posting until I had some more experience.
So here we are. On June 1st 2019 I received my first interest payout and on September 1st 2019 my first program matured. Currently I have around 20 programs running across a range of assets: XRP, BTC, ETH, LTC, LBA and USD. The interest earned so far stands at around $55. Total asset value with CredEarn has fluctuated as I’ve invested more and the market has moved, but currently sits at around $3.1k. Not huge numbers yet but the most important thing for me was to understand the platform and I’m comfortable with the amount I’m risking.
On the whole I am satisfied with CredEarn. Once you get past the initial set up it’s very straightforward to keep an eye on the programs and start new ones. Building reputation and trust takes time but it can be helped or hindered by the associations a company makes and CRED has done well in my opinion. Uphold is a platform that gives me confidence due to their relatively long history of 6 years in this space and their commitment to transparency. Using BitGo, Bittrex, Ledger and XAPO (acquired by Coinbase), for custody of assets, further enhances this because they stand out as some of the most legitimate companies in crypto as a whole. Furthermore they are promoting their insurance cover (which I think they should do a lot more of):
The rates with CRED are generally some of the highest I’ve come across in the DeFi space. They have been changed at times between assets and programs, which signifies the demand that CRED have experienced. Although initially disappointing I now see the positives in those decisions and I was impressed with how openly they engaged the community when questioned:
Wildly popular program, not enough liquidity in XRP market to keep the rates there. Hopefully will come back up soon!… not enough fiat liquidity for us to properly hedge and not assume undue risk…CRED’s response when questioned about dropping XRP interest rate to 3.5%. You’ll be happy to know it’s back at 9% 🎉
It’s all relative…
It’s important to zoom out of the crypto market for a second and take stock of where we are overall. If I compare the interest rates on GBP in CredEarn with the traditional banks in the UK it’s total domination. To get a measly 2.3% you have to lock up funds for 5 YEARS. Try and convince a crypto holder to do that!
The Lock Up
Controversial it may be but I’m a fan of the 6 month CredEarn lock up. Of course it means less liquidity but it ties in with my HOLD mentality and long term plan to keep the assets well into the future.
The advantage is that the interest rate is fixed for the 6 month term of a program, whereas if I used a DeFi platform with instant access/ no lock up, the rates are variable from day to day. Another advantage for me is that the long term lockups aren’t attractive to short sellers. In fact CRED does everything in their power to avoid lending to short sellers and we shouldn’t underplay the importance of that because they put negative pressure on prices. For me, it’s very important to support platforms that enhance the long term value of the underlying asset and it’s on us, as lenders, to demand transparency about their lending policies.
…it’s very important to support platforms that enhance the long term value of the underlying asset and it’s on us, as lenders, to demand transparency about their lending policies.”CredEarn Expert
You might rightly ask then who do they lend to? It’s a great question and again I’ll detail it in a later post but think about people that need to make large purchases…
Criticism and Improvements
As with any new product, everything won’t be right at the first attempt but as long as the fundamentals are there things can be corrected. I believe that’s the case with CRED and while I will go into detail in this later post I keep mentioning, I think @jamesalexanderx raised some good points in his Coil post “How CRED can improve – 3 tips from a customer“. Check it out!
Look out for my next post where I will go into how I think CRED should approach growing into the future. In the meantime take a look around the blog and Follow me on Twitter, it’s the best place to get in touch with me if you have any questions.