A crypto app that makes crypto asset management accessible to everyone says it offers the best of all worlds by combining the benefits of centralized and decentralized finance in one place.
With SwissBorg’s Smart Yield Wallet, investors can earn a return on their digital assets that doesn’t depend on a coin’s value increasing. The company’s systems scan a range of programs in the DeFi and CeFi space and rank them based on risk and reward.
An automated and streamlined approach means users get access to the best programs without having to spend endless hours of their own research. Evaluation of the best yield farming initiatives on the market is also done daily – reducing the likelihood of missing lucrative opportunities.
This is not at the expense of protection. Risk management is at the forefront of the Smart Yield offering and to protect against smart contract risks, a safety net has been put in place, exploiting flaws in the underlying code to steal or freeze funds. According to SwissBorg, 25% of all returns flow into this program to increase security.
According to SwissBorg, the yield is increased daily to maximize profits – and low barriers to entry mean that anyone can contribute with a few taps. The lack of a minimum investment period ensures that crypto enthusiasts can fund and withdraw funds from their Smart Yield account as they please, and deposits can start from as little as 10 euros ($12.15).
DeFi and CeFi: the pros and cons
With savings accounts at legacy banks offering low interest rates, interest in the yield farming schemes being offered across the crypto space has surged in recent months.
All of this was fueled by the rise of the DeFi industry in 2020 – with the total value locked in these protocols growing from $671 million to $15.5 billion over the year. This number has more than doubled since the beginning of 2021 and was at times over 40 billion US dollars. Centralized finance brands were now interested in getting involved.
More insights from SwissBorg here
But according to SwissBorg, DeFi and CeFi have their own advantages and disadvantages.
Decentralized finance allows savers to earn a return by lending cryptocurrencies like ETH, USDC, and DAI to others. However, interest rate levels can fluctuate dramatically depending on demand and supply – SwissBorg claims that in extreme cases it can fluctuate between 0.01% and 50% in a matter of hours. Many DeFi protocols are also based on the Ethereum blockchain, where gas fees have spiked recently. That means even simple transactions can cost anywhere from $30 to $70, hurting returns.
At first glance, these disadvantages could make centralized financial providers significantly more attractive. This can mean lending your wealth to a company that will invest it on your behalf, for example by offering credit to borrowers. While this may eliminate transaction fees, there may be a risk of a central counterparty failing – and this may not always provide transparency into how funds are being used.
Full transparency
After launching Smart Yield in December 2020, SwissBorg started publishing monthly reports showing the performance of these wallets.
Figures for the second half of December and all of January suggest that the average annualized return for this period was 20.21%.
Smart Yield Wallets supporting Bitcoin, Ether, Binance Coin and DAI are currently in development, with SwissBorg stating: “Fairness and inclusivity are at the heart of SwissBorg’s identity, so we decided to find a way to achieve that to make a yield accessible with crypto.” all.”
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