Welcome to Coin Interest Rate, where we track and index the top crypto interest account platforms.
So, which crypto earns the most interest, you ask? USD-based stablecoins are currently the crypto that earns the highest interest by rate. Stablecoins currently earn approximately 7-12% interest rate APY when deposited into a crypto interest account (or lending platform). This makes stablecoins the crypto that earns the highest interest rate.
Interest rates are driven by supply and demand and other market conditions. A higher interest rate indicates a greater demand for a cryptocurrency; therefore, lending platforms can pay a higher interest rate when you deposit them.
After US dollar-based stablecoins, Ethereum is the second-highest crypto by interest rate. Currently, Ethereum on crypto interest account platforms pays between 3-7%.
Ethereum, in a near release, will be a proof-of-stake cryptocurrency. Proof-of-stake, or POS for short, means it natively rewards holders as part of its protocol. Meaning, if you have a native Ethereum wallet and delegate your funds to that wallet, you will earn proof-of-stake rewards. While this is not exactly the same as interest earned, it is very similar. It is expected that ETH will pay between 2-4% natively staking. This figure will depend on the number of users staking and the coin’s demand (as staking rewards are generated from gas/transaction fees).
What is a lending platform?
Lending platforms, or crypto interest accounts, are centralized, custodial platforms that accept cryptocurrency deposits and hold it on your behalf. These deposits are eligible for interest payments. Sometimes these are daily, sometimes weekly, or even monthly.
These platforms then lend out your crypto to other parties. They could be private or institutional firms that can then use your Bitcoin for various purposes (shorting/longing the market, leverage, arbitrage, etc.). You are temporarily releasing your crypto for them to use; in return, they are paying you interest for those funds. This is where the yield comes from on cryptocurrency that doesn’t have native staking built into the protocol (and why Bitcoin, for example, does not pay interest unless on a supported service).