[Thoughts + Feedback] Easiest way to stake + spend with DeFi
Hey Friends! I'm starting off my indie hacker journey, and I'd love some feedback on an idea I'm working on.
Would people be interested in earning 4-7% yields on a balance that can also be used for everyday spending?
Right now, Defi (decentralized finance) offers a rather low-risk way to earn high yields on fiat, but it's a hassle to have to stake and un-stake coins. Thus I'm building a platform that marries high yield Defi with the convenience of a traditional checking account: i.e. quick liquidity, ability to write checks, spend funds, pay bills, withdraw from an atm, ACH transfers, etc. Of course, as the yields are powered by Defi lending*, the funds are not FDIC insured.
Interest is earned as a basket of cryptocurrencies, or in the cryptocurrency of your choice, which gives users a dollar-cost averaged and potentially diversified exposure into the crypto markets. (Imagine earning $1-2 worth of bitcoin or ethereum every week in interest.)
What are your thoughts on something like this? Would you use it? Why or why not? We have a growing waitlist, and already a few dozen who have made a deposit to reserve their spot on our beta, but I'm curious to hear your thoughts, and of course any ideas on how we can snowball our growth!
*If you're curious as to how these yields are generated, basically people lend their dollars against highly collateralized loans in the Defi space. These loans are backed by assets often worth up to 200%, or 3x the principal. Take a look at Gemini earn, compound or Aave.
https://thresholds.io - is our landing page if you're interested in taking a look!
I am in search of something like this these days. Will you be a competitor of Crypterium and Crypto.com cards?
Yes! Similar. We're really trying to make it more functional and flexible though, and not force you to earn interest in a specific token.
How long til we can pay bills with something like this?!
Hopefully in a few months!
I'm interested if you can make this, but how secure will my funds be?
That's definitely an important concern, and there are technically 3 types of risks when talking about the security of the funds.
Partner risk - Funds are currently custodied by sendwyre. While we've vetted all of our partners to ensure we're working with reliable, secure, and trusted companies, all companies run the risk of being hacked, and if our partners are hacked, your funds can be lost.
Technology risk - Crypto, DeFi, and Stablecoins are still a rather new technologies, so in the chance that USDC somehow implodes, or the DeFi market dissolves, it's possible that you can lose your principal.
Lending risk - Our yields will ultimately be provided by Genesis (who also generates the yield for Gemini Earn). These loans are backed by collateral worth 125% - 200% of the principal. But of course, if there happens to be a flash crash, and Genesis is not able to liquidate the collateral quickly enough, you can lose your funds.
While we and our custodial partners will make every effort to minimize risk and keep your money safe and covered, putting funds into a balance like this will entail risk.