There was a time when having sky-high annual percentage rates on crypto yield products felt like the best way to drive adoption. That time has passed.
This week crypto exchange KuCoin is facing scrutiny because its KuCoin Earn page boasts APRs of 233.15% on Ethereum, 253.28% on Bitcoin, and 100% on Tether deposits. Although the company’s website says that the Tether (USDT) rates are part of a promotion, the ETH and BTC rates listed correspond with an advanced “dual investment” KuCoin Earn product.
All the attention has sent 24-hour volumes on the exchange, which was $640 million yesterday, up to $862 million today, making it the fifth largest centralized exchange by normalized volume, according to CoinGecko.
That has raised some eyebrows on Crypto Twitter, along with defenders who have dismissed the criticism as FUD (a crypto-native acronym for fear, uncertainty, and doubt).
🧵1 / I’ve been seeing absurd #Kucoin FUD regarding the APR.
Dual Investment is a financial product that is non-principal-protected and has high yields. Same on Binance should you withdraw from Binance because of the enormous APR. No!
Dual investment products are derivatives that allow clients to deposit money in one currency, like BTC, and potentially make a profit by withdrawing it in another currency, like USDT, when the contract expires and needs to be settled.
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