Maker Savings Interest Rates

How to Earn Interest on Maker?

Maker (MKR) is the native governance token of MakerDAO, one the most dominant names in the DeFi space with assets worth over $7.5 billion locked, as per DeFi Pulse. It has delivered an ROI of over 13,000% so far. Maker hodlers have made huge profits by hodling onto Maker tokens. But if you begin earning interest on Maker while hodling, you will effectively maximize your profile. Follow the steps below to start earning interest up to 2.5% APY:

1. Sign up for an Interest Account 

You will need an interest account to begin earning interest on Maker. For that, you must visit the website of a Maker interest account provider like YouHodler. Now, go to the registration page and enter your name and email ID. Once you have entered the details, click on the submit button. 

2. Verify Your Account 

After completing the registration process, you will receive an email from the interest account provider. It contains a link that you must click to verify your email. Next, you must complete the KYC process to activate your account.

To complete the KYC process, you have to provide some personal details, a government-issued identity card, and a photograph of you holding the card. Click on the submit button after adding your details, uploading the document and the photo. In most cases, you will receive an email from the interest account provider about successful KYC verification. 

Both first and second steps are not required if you are opting for a DeFi platform like Aave to earn interest on Maker. There is no signup process, and nor do you have to complete any KYC process. Connect your web3 wallet like Metamask to the platform and deposit Maker to your interest account. You don't have to do anything else now as the interest accrual process is automatic.

3. Deposit Your Maker

You should deposit Maker into your interest account after you receive an email from the interest account provider about successful KYC verification. Visit the page that has all the available deposit options listed. Click on the Maker option to receive a unique MKR wallet address. Copy it and paste it on the MKR withdrawal page of the wallet where you are hodling MKR tokens. Then, enter the amount of MKR tokens you want to deposit into your interest account and click on the submit button. You will soon receive the Maker funds in your interest account.

4. Start Earning Interest 

Once you have deposited Maker tokens into your interest account, you don't have to do anything else, as the interest accrual will begin automatically. Depending upon the platform you choose, the interest accrual will start within 48 hours. Use Bitcompare Maker Interest Calculator to calculate your earnings.

Why Earn Interest on Maker?

There is no doubt that Maker hodlers has received huge returns by hodling onto Maker tokens. But who doesn't want to maximize their profits? Earning interest on Maker will multiply your profit, which is far better than keeping Maker tokens idle in a wallet. 

• Easy Process 

All you have to do to earn interest on Maker is complete a 3-step process: Signup for an Interest Account, Complete KYC, Deposit Maker. That's it! The interest accruals will begin soon. You don't have to do anything now as the interest accrual will start automatically. Earning interest from a DeFi platform is even easier, as a user doesn't have to sign up for an interest account. Also, there is no KYC process. 

• Low Risk 

Though there are some risks in earning interest on Maker that we will explore some time, the magnitude of risks is comparatively lower than many other similarly high-paying instruments have. The interest these platforms offer to their interest account holders comes from the income they generate by lending cryptocurrencies and fiat currencies. As it involves lending, there are risks, but these platforms manage it by asking for over-collateralization from anyone who wishes to borrow from them.

• Passive Income

Well, who doesn't want to keep earning passive income? Many experts have said that passive income is the best form of income. Thus, in the long run, your passive income should be more than your active income. By earning interest on Maker, you are adding a high-paying passive income stream. It allows you to keep earning interest even while you are sleeping. 

Where can I Earn Interest on Maker?

Maker is among the 50 largest cryptocurrencies by market cap. Yet, there are limited options when it comes to Maker interest account providers. Among the platforms offering Maker interest accounts, YouHolder and Gemini are the best.

YouHodler

You can earn 2.5% interest APY on your Maker funds on YouHodler. They have no specific requirements to earn 2.5% APY on Maker. You don't have to agree to receive a payout in YouHodler's native token as they don't have any native token, unlike many other crypto interest account providers. They also pay interest payout every week, and you are free to withdraw your Maker funds anytime you wish. They don't charge anything for withdrawals.

Gemini 

Gemini is a comparatively newer player in the interest account space, but it is among the most credible crypto exchanges globally. As of now, Gemini Earn is only open to the residents of the United States and Singapore. With Gemini, you can earn 1.98% interest APY on Maker. You can also earn interest in stablecoins like GUSD if you wish to do so. 

Is it Risky Earning Interest on Maker?

Yes, there are risks. The interest that the crypto interest account providers pay to their account holders comes from their lending business. They lend cryptocurrencies and fiat currencies at very high interest to their borrowers. These platforms also use their user funds to lend. Thus, there is a risk. But most of these platforms manage the risks by making over-collateralization mandatory. 

But there are some that do not have a mandatory over-collateralization policy for obtaining loans from them. They may also offer higher than average interest as they charge higher interest from their borrowers. If you create an interest account with such a platform, there will be a higher risk to your funds. 

If some of their borrowers start defaulting, the platform will get in a difficult situation. They may fail to pay interest to many of their interest account holders. If the loan default numbers become too big, the platform will go bankrupt. If the platform files bankruptcy, they cannot return the user funds as they would have lost a maximum part of it by then.

Though a majority of interest account providers have insurance for their user funds, whether it will be enough or not depends on the amount of losses. If the insurance amount is less than the amount of losses the platform faced, their interest account holders will only receive a part of their funds back. Thus, you must choose a platform to earn interest on Maker wisely. In-depth research is a must to understand the pros and cons of each platform offering Maker interest accounts. Read Bitcompare reviews on almost major interest account providers to know more about them. 

What to Look for While Choosing a Platform?

There are a couple of things that you must check before choosing a platform. Interest rate is an important factor, and there is no doubt about it. But the platform's credibility is equally important. So, do not choose a platform only based on the interest rates. To know if the platform is credible or not, read its reviews on sites like Bitcompare. Also, search user reviews about the interest account provider on Trustpilot and other similar websites. You can also visit the social media pages of the platform to see how their followers and users are commenting about them in their posts. 

Next, check if the platform had insured its user funds. It is a crucial factor as if the platform loses its user funds due to a hacking incident or goes bankrupt, the insurance company will pay the insurance amount to the platform. Then, the platform will use the insurance amount to repay user funds to their interest account holders. 

Now, check the eligibility criteria that the platform has to decide who is eligible for earning the highest interest rates the platform offers and who is not. Many interest account providers have their native token. Thus, they make it mandatory for the interest account holders to receive interest payout in the platform's native token to earn the highest interest rates. If they don't agree to it, they do not earn the highest interest rates the platform offers. Some platforms make it mandatory to lock your funds for a specific duration for earning the highest interest rates. Some may have multiple requirements.

You must also check if the platform has any minimum deposit requirements for earning interest on Maker. If the platform requires its interest account holders to deposit a minimum amount of Maker tokens to become eligible for earning interest, you will have to deposit equal to or more than the minimum Maker deposit requirement. Depositing less than the minimum amount means you won't earn interest on your MKR funds until and unless you meet the minimum deposit requirements.