• Markets
  • Crypto
  • Web3
  • Culture
  • Opinion
  • Politics
Subscribe
  • Login
  • Register
No Result
View All Result
  • Markets
  • Crypto
  • Web3
  • Culture
  • Opinion
  • Politics
No Result
View All Result
No Result
View All Result

Ethereum’s DAI Now Pays 10x More in Interest Than a Bank Savings Account

30/12/2019 19:36
1 comment
DAI savings rate almost beats real estate ETFs, Dec 2019

We are being fleeced by the vampire squids on Wall Street, but perhaps not for much longer if the new world of blockchain based codable finance has any say.

An event that has gone a bit unnoticed can potentially be a game changer of sorts. Thats the launch of the Dai Savings Rate (DSR) which now provides you 4% yearly interest on tokenized dollars for doing little more than sending it to the smart contract through Oasis or some other method.

DAI savings stats, December 2019
DAI savings stats, December 2019

Some $28 million DAI is already earning interest with this being what banks would call an instant access savings account.

That’s because you can withdraw the dai from the savings account whenever you want, and as soon as you do, the code automatically calculates how much interest you earned and so pays it to your ethereum address.

Banks kind of do the same thing, albeit far more manually, but for the privilege of using your money, the biggest bank in UK – Barclays – gives you a meagre 0.25%, and even for $10 million it still gives you just 0.30%.

Barclays instant savings account, Dec 2019
Barclays instant savings account, Dec 2019

To borrow at the same kind of instant access level, like through a credit card, Barclays charges as much as 20%.

It appears however almost none of it is passed on to savers, with this in effect being a sort of sophisticated theft.

MakerDAO uses sort of the same system of passing revenue from borrowers to savers, but does so far more equitably.

As you might know DAI is natively tokenized dollars whereby open source code “prints” dais based on locked eth with the price of eth incorporated through oracle feeds.

For the privilege of this “printing,” a fee of 4% is paid to the dapp which converts it to MKR tokens that are burned.

According to Daistats, there are some 10,000 MKR in burner, worth $4 million.

Some of this “printing” fee however, known as stability fee as its intention is to keep DAI pegged to the dollar, now goes to the savers.

The process is somewhat manual for now in as far as the setting of the stability fee and savings rate is concerned, but Compound does automate it so logically you’d expect eventually the dollar peg to be kept algorithmically through the automatic movement of the borrowing and savings rate based on demand and supply.

In effect making this an automated bank that basically runs by itself, and since the cost is just dirt cheap code, the rewards are shared with participants rather than galloped by vampire squids.

Hence DAI gives a savings rate that competes with even the Vanguard Real Estate ETF, while bank based savings accounts give absolutely nothing.

Meaning the tech revolution has now began swinging as years of work start chipping and chipping at the new world.

Copyrights Trustnodes.com

Related Posts

Signature Bank

The Demise of Signature Bank, A Crypto Contrast

Fed Increases Global Liquidity

Fed Increases Global Liquidity

Bitcoin Nears $27,000 on Bank Troubles

Not-QE is Back

Load More
  • Trending
  • Comments
  • Latest
Credit Suisse

Fed Swaps $9 Billion to Swiss National Bank, Bail Out For Credit Suisse?

The new New York

Crypto, Now Safer Than Fiat

Arbitrum abstract

Only 30% of Arbitrum Users Receive Airdrop

BlackRock's CEO Larry Fink

“Very Interesting Developments” Happening in Crypto Says BlackRock’s CEO

The bitcoin train, starting its journey?

Bitcoin Nears $27,000 on Bank Troubles

Fed's balance sheet, March 2023

Not-QE is Back

JP Morgan's CEO Jamie Dimon and Goldman Sachs' Chai Craig Blankfein back in 2016

Banks Bail Out Themself to Fed’s Applause

Arbitrum abstract

Only 30% of Arbitrum Users Receive Airdrop

Comments

Latest News

  • The Demise of Signature Bank, A Crypto Contrast
  • Fed Increases Global Liquidity
  • Bitcoin Nears $27,000 on Bank Troubles

About Trustnodes

Terms of Service

Privacy Policy

Our Ethics and Values

Trustnodes Newsletter

(You have to be a paid subscriber)

Trustnodes © 2017-2023. All Rights Fully Reserved. For any Enquiries contact@trustnodes.com RSS Feed

No Result
View All Result
  • Login
  • Sign Up
  • Cart
  • Markets
  • Crypto
  • Web3
  • Culture
  • Opinion
  • Politics

Trustnodes © 2017-2023. All Rights Fully Reserved. For any Enquiries contact@trustnodes.com RSS Feed

Welcome Back!

Login to your account below

Authenticate with MetaMask Loading...

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

*By registering into our website, you agree to the Terms & Conditions and Privacy Policy.
All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?