Crypto finance startup BlockFi has announced a new product: Interest Payment Flex. Customers holding one asset can have their interest paid out in another asset, allowing them to accrue income in three different assets as per their desires, September 5, 2019. The new feature can be found by navigating through the menu and finding the tab that allows you to choose which asset to accrue interest in.
Catering to Diverse Needs
Some customers may prefer to lend out their ETH or BTC and receive interest in a stablecoin like GUSD, and others may prefer to hold GUSD and accrue hyper-appreciative cryptocurrency as interest.
Both scenarios make sense, so this is obviously a stellar move from BlockFi. Not all product enhancement has to be radically innovative, some tiny tweaks like this can go a long way in improving customer experience with the platform.
Holding stablecoins and receiving interest in BTC or ETH is a smart way to automate a dollar-cost averaging strategy. At the same time, holding BTC and receiving stablecoins as interest can serve as an effective way to earn passive income.
For those residing in the United States or any other developed country, BlockFi’s rates are orders of magnitude more favorable than a typical savings account.
It would’ve been better to have the stablecoin partnership with a more widely adopted coin like DAI or USDC, but considering BlockFi has multiple tie-ups with Gemini, including custody, GUSD was bound to be integrated over others.
Centralized and Decentralized Crypto Finance
BlockFi is a centralized form of crypto finance, and it has been incredibly successful thus far. On the other end of the spectrum, there is the DeFi ecosystem being built on Ethereum.
There are pros and cons of both, as the trade-offs between trust and efficiency are plentiful.
At this point, even decentralized protocols like Compound Finance rely on centralized custody and have many risks associated with lending on the platform.
While DeFi is still in a primitive state, the developments are rapid and concise.
However, the word ‘decentralized’ may not be apt to describe the stack, as many projects like Compound, Argent, and Dharma v2 (by association to Compound) run in a centralized manner in order to create a favorable experience and onboard more customers at initiation.