Crypto investors were frustrated as Crypto.com slashed the rate of returns it offers on token deposits. The latest cut, which is the platform’s second such reduction in March, was announced earlier on Saturday with no prior notice.
Saturday’s cut brings the flexible returns offered by Crypto.com on popular tokens such as Bitcoin (BTC) and Ethereum (ETH) down to 0.5% from between 1.5% to 2%. Returns on larger amounts, particularly on stablecoins, were effectively halved to 4%.
Crypto.com said the new rates, which are lower than the ones it had outlined earlier in the month, would be effective immediately, and that pre-existing deposits will not be affected. In its announcement earlier this month, the platform had said its planned rate cuts would go into effect from April 4.
The latest cut also brings returns offered by Crypto.com lower than those seen on other major platforms, including Celsius and BlockFi.
Crypto holders not pleased
Users took to social media to express their frustration with the cut, given that it came without notice, and that it also made investing on the platform less lucrative.
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Reddit user r/WheresTheButterAt, who shared the change on popular crypto subreddit r/CryptoCurrency, said they had expected rates to drop over time, but twice in a couple of weeks, with no notice for the second time, was not a good look.
The announcement also attracted ire on twitter, with users citing little incentive to deposit in the platform now.
Anyone else looking to diversify Earn assets out of @cryptocom now that their rates are near bank-rates?
-Twitter user @denomeme
Several users also called for a shift to decentralized wallets, equating the sudden cut in rates to a rug pull.
Lending rates on a downtrend
While controversial, the drop in returns on crypto deposits has been an ongoing trend since last year. As crypto adoption picks up, more people deposit on major lending platforms. But this makes it unfeasible for the platforms to keep paying out high returns.
The move has also spilled over into the DeFi space. Returns on stablecoin deposits have fallen to around 12% across most platforms, after initially being as high as 20%.
Anchor Protocol, which until recently offered the highest returns on stablecoin deposits, at around 20%, recently voted to adopt a dynamic earn rate, in order to maintain the platform’s sustainability.
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