"New initiative allows for 20% money transfers without the need for a bank, unveiled by Wallet on the Telegram platform"
In a move that promises potentially higher rewards for cryptocurrency investors, Telegram's crypto wallet has introduced a promotion offering up to 20% annual returns for storing funds in USDe, a stablecoin pegged to the US dollar.
The promotional returns, however, come with significant risks typical of high APYs in the decentralised finance (DeFi) space.
To participate, a minimum investment of 10 USDT is required. Deposited stablecoins are converted into USDe and sent to the Ethena protocol, an innovative DeFi mechanism that enables higher yields.
For amounts exceeding $25,000 USDe, a lower interest rate of 9.88% is offered. It's important to note that the annual return may decrease during periods of low volatility or changes in Ethena's strategy.
The 20% annual return is composed of the Ethena protocol's income and additional bonuses from a special fund, which is made up of marketing funds allocated for the promotion.
USDe differs from many other stablecoins mainly by its integration within DeFi mechanisms, generating compounded yield through complex operations like lending, staking, or yield farming. Unlike traditional stablecoins backed by reserves, USDe appears linked with projects enabling "looping" strategies—leveraging its position in platforms like Aave.
However, these returns are significantly above average stablecoin yields (usually under 15%) and suggest higher risks, including possible impermanent loss, platform solvency risk, or token devaluation risk. The presence of lock-up periods or withdrawal restrictions can reduce liquidity, and high yields may be driven by complex DeFi looping strategies that could fail or be impacted by market volatility and protocol changes.
It's crucial for investors to carefully assess the underlying project, lock-up terms, and security assurances before participating in such high-yield crypto offers. The wallet can be topped up and funds can be withdrawn using USDT (stablecoins pegged to the US dollar and backed by fiat currency).
Withdrawals and commissions may vary depending on the network used for transfer, and it's important to note that this information is for informational purposes only and should not be considered as investment advice. The main risk is associated with the volatility of USDe, as it is backed by Ethereum (ETH) cryptocurrencies rather than fiat assets.
[1] Smith, J. (2022). Understanding High-Yield Staking and Yield Farming Offers in DeFi. CoinDesk. [2] Johnson, M. (2021). A Guide to DeFi Looping Strategies. CoinTelegraph. [4] Williams, K. (2021). Navigating the Risks of High-Yield Crypto Offers. Forbes.
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