MEXCCentralized Crypto Lenders Slash Rates As Markets Slump
There has been a significant drop in the yield rates offered by crypto yield platforms. Circle, the issuer of stablecoin USDC, used to offer rates of 6-8 % APY, ranging from 1-12 months. However, they currently offer a yield rate of 0.5% for terms of any length.
Crypto.com also slashed its yield rates. The exact rates depend upon the cryptocurrency and the amount of $CRO staked. The yield rate for BTC and ETH can be as low as 0.2%. Crypto.com also recently slashed the rewards on its prepaid VISA cards, causing its native token CRO to slump massively.
The reduced yield rates are causing a major cause of concern over the future of yield platforms.
Circle Faces Questions Over Solvency
The low yield rates come amidst a time when there have already been questions surrounding Circle’s future.
Geralt Davidson, a crypto trader, alleged that Circle is on the verge of bankruptcy. The claims were made on the basis of a recent SPAC IPO filing, which showed that Circle had recently lost money. He also claimed that a lot of positions held by Circle may have been exposed to firms like 3AC and BlockFI, which explains their dwindling interest rates.
Reggie Middleton, a developer of peer-to-peer capital markets, also questioned Circle’s ability to meet yield obligations.
Jeremy Allaire, the CEO of Circle, came out in defense of his platform. He reaffirmed that Circle is in the strongest position ever. He disclosed that their platform has faced zero issues because the Circle Yield is regulated and over-collateralized.
Centralized Yield Platforms Face Scrutiny
Following the crash of multiple centralized exchanges and yield platforms, there have been a lot of questions about their financial stability.
Yesterday, Voyager suspended all its services after revealing that they had major exposure to the crypto hedge fund, 3AC, which also became insolvent recently. Singapore-based Vauld also halted its services citing market conditions. Celsius and BlockFi also suffered heavy losses in the bear market.
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