DailyCoin
Published Nov 29, 2022 02:00PM ET
Updated Nov 29, 2022 03:30PM ET
Crypto Twitter Freaks Out over KuCoin’s 300% BTC Yield, Exchange Explains How it is Generated
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Fear in the crypto industry is running wild these days. On Tuesday, users on Twitter were shocked when they saw that KuCoin, a centralized crypto exchange, is offering almost 300% APR on Bitcoin (BTC), 200% APR on Ethereum (ETH), and 100% APR on Tether (USDT).
Alex Valaitis and other users shared a screenshot of KuCoin’s investment products and their massive projected APRs, questioning how such big yields could be achieved in a bear market, or for that matter at all.
Usually, yields are very high when an exchange or any other platform is running out of certain assets and needs them to cover their liabilities or for any other reason. However, yields of hundreds of percent are almost impossible to achieve, and so crypto Twitter was right to assume something sketchy was happening.
But KuCoin was quick to react. The centralized exchange explained that the high APRs are part of its dual investment strategies, which involve depositing one crypto asset with the possibility of earning yields based on two assets. How much the depositor will earn depends on how the deposited asset performs at maturity.
Needless to say, it’s a risky investment, hence the astronomical APRs.
However, some were not convinced by KuCoin’s explanation. A Twitter user named Bitfinexed, known for continuous criticism of Tether, said that centralized exchanges are “desperate for new deposits, and are resorting to underhanded tactics.”
h2 On the Flipside/h2KuCoin is a large centralized crypto exchange. While it’s not entirely clear how its dual investment products work, astronomical APRs are never a good idea to succumb to.
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Written By: DailyCoin
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