Crypto Reward Tokens: Which platforms perform best?
The advent of DeFi automated exchanges has brought new ways to invest and earn money with cryptocurrencies. Being already interested in investments of the sort, many crypto adopters have rushed to these – particularly those programs where money can be earned by just parking your crypto in a particular exchange and in return, you earn a reward.
These tokens, often thought of as crypto reward tokens, are currently being advertised as great investments, since they’re low-risk propositions. They’re also helping to build the backbone of a global working blockchain economy that could eventually rival, or even replace, our current, banking-based economy.
How do they work?
As stated above, crypto reward tokens work in much the same way fixed-term deposits and savings accounts work with traditional banking. You give the bank (or in this case the DeFi exchange) your crypto tokens, it is to fund loans, and you get a percentage of the interest back after some time. There are no fixed terms, so your crypto isn’t stuck there – however, the longer it remains there, the higher the earnings you get in return.
That sounds good. Can I do this with any tokens?
Not with just any token, since you’ll have to use tokens that are supported by your platform of choice. While in most cases this means Ethereum-based tokens and stablecoins, some platforms do allow external tokens.
Still, there’s nothing keeping you from participating using one token and then converting the earnings to another, so if it’s plain earnings you’re looking for, then the lack of support for your token of choice shouldn’t be a problem.
Which ones are the best performers currently?
While there are dozens of possible offerings, each with its own pros and cons, and while it’s impossible for there to be a single one that’s best for everyone, we have reduced our list to three main tokens you should look out for and consider: Nexo, Celsius, and Crypto.com. The reasoning for our choice is as follows:
The more features and services an exchange offers, the more likely it is to succeed in the long run. For reward tokens, this means more users, which leads to higher, more regular earnings.
Out of these three, Nexo is the one closest to a standard banking operation – as it is both licensed and regulated. It is backed by Deloitte, giving it the much-needed industry approval. Its main offering as a platform for customers is both savings accounts (that net you rewards) and a loaning platform. Interests are given daily and all transactions are insured. Nexo supports fiat currencies, and a few other exchanges do. same
Celsius offers much the same as Nexo, although it isn’t as tightly regulated. Celsius also offers their loans without requiring credit checks, which expands its audience at no risk to you, as all loans are insured. Interests from Celsius are awarded weekly.
Crypto .com also offers savings accounts and loans. However, their main draws are support for a large range of currencies and, more importantly, its crypto-backed debit cards that allow you to make purchases using your saved cryptocurrencies without having to go through exchanges.
Wherever money is handled, safety is paramount. While all three of these exchanges are considered safe, their features vary.
Nexo insures all wallets for up to $100m. Moreover, deposits are kept in cold storage under a third-party custodian, as per EU/UK regulations. Its security and management systems have been heavily audited and are considered top-of-the-line.
Celsius, like Nexo, has all wallets insured and kept in cold storage by a custodian – BitGo, the same one behind Nexo. Its mobile app offers two-step authentication. There’s no web app to speak of.
Unlike its other two competitors, Crypto.com doesn’t list third-party insurance or custodians among its features. However, the company and its holdings are insured by the FDIC and all user deposits are kept in cold storage.
Ease of Use
This is the point where there’s more variation among all three companies. Although ease of use and access should be paramount, it’s common for crypto-based companies to sometimes falter in this regard.
While Nexo offers both web presence and a mobile app, there’s no way to buy or exchange cryptocurrencies from it – with the app serving mostly as a tool to check what you already have there. It is generally simple to use and has support for different types of accounts, including business ones.
Celsius has no web presence whatsoever. It also only offers its highest interest rates if you choose to be paid using its own cryptocurrency, which can be problematic for some users.
Crypto.com, for all of its available services, has one flaw: Not all territories are supported. Most particularly, the crypto exchange and credit lines aren’t available for US residents (however, the crypto-backed debit cards are.)
Since it’s not uncommon for exchanges to offer their best rates if you allow them to pay you using their native cryptocurrencies, the recent performance of said tokens is an important metric to consider.
Nexo’s performance on this regard has had its highs this year, and few lows. While the price of the NEXO token is only 30% higher than back in January, over the year it has seen peaks that have led it to over 100% ROI vs January. It also hasn’t seen huge lows – meaning it’s a relatively low risk currency.
Celsius is easily the biggest performer among these three. The CEL token has gone from $0.14 at the beginning of the year to an all-time high of $1.43 as of this writing – reporting a 1000% price increase. It’s hard to argue against a performance like this.
Crypto.com’s performance is close to that of Nexo, in that it’s had a few highs (none as high as Celsius’) and few lows. The MCO token did have a sharp price drop during March, but it recovered quickly in a bull run that had the token go from roughly $2.5 to $5.5 within a month. Its price as of this writing sits roughly 30% higher than in January.