How to Earn Interest on Paxos Standard?
Paxos Standard (PAX) is among the most popular stablecoins today. Today, it is available across 150 cryptocurrency exchanges, wallets, OTC desks for purchase. Paxos buyers trust PAX as Paxos publishes a monthly attestation report from their auditing firm.
Many Paxos Standard buyers hodl onto them as it is pegged to USD, and it is easy and fast to convert them to USD. If you are one of the Paxos Standard hodlers, you must know about a way to multiply your profits while hodling PAX. If you deposit Paxos Standard in an interest account, you can earn up to 12.65% on your deposits. Follow the steps below to begin earning interest on Paxos Standard:
- Signup for an Interest Account
To begin earning interest on Paxos Standard, you will need an interest account. Go to the website of a Paxos Standard interest account provider and visit their registration page. There you will have to provide your legal name and email ID. Once you have entered the information, click on submit button.
- Verify Your Account
Look out for a verification email from the interest account provider, which will contain a verification link. Click on the given link to verify your email address. After email verification, it's time to complete the KYC process to activate your account.
To complete the KYC process, you will have to enter your personal details like name, nationality, residential address, among other things. You will also have to provide a government-issued ID card and a photo of yourself holding the same card. The photograph must be a recent one. Once you have entered all the details, uploaded the documents, and the photo, click on submit. If everything is done correctly, you will receive an approval email from the interest account provider within few days.
- Deposit Your Paxos Standard
Once your KYC is approved, your account is ready for earning interest. All you need now is Paxos Standard funds in your account. To deposit PAX, visit the page listing all available deposit options. Click on the Paxos Standard or PAX mentioned in the list. After you click on it, you will see a unique wallet address.
Copy the unique wallet address and paste it into the PAX withdrawal page of the wallet from where you are withdrawing PAX to your interest account. After pasting the wallet address, enter the amount of PAX you want to deposit into your interest account and click on the withdraw button. You will receive the PAX balance in your interest account soon.
- Start Earning Interest
After you have received Paxos Standard in your interest account, you don't have to do anything. The interest accruals will begin automatically. Depending on the platform you choose, you will have an option to receive interest payout in PAX or the platform's native token.
Why Earn Interest on Paxos Standard?
Earning interest on Paxos Standard is far better than keeping it idle in a wallet. The return you earn by depositing PAX into your interest account is far more than what many banks offer on fiat currencies like USD, GBP, AUD, and others. You are also effectively multiplying your income by earning interest on Paxos Standard, which wouldn't have been possible if you kept your PAX in a wallet offering no interest.
- Easy Process
It's is easy to begin earning interest on PAX. All you have to do is go through a 3-step process to begin earning interest on Paxos Standard. The first thing you need to do is signup for an interest account, then complete the KYC process, and at last, deposit Paxos Standard in your interest account. Isn't it easy? What's even better is that once your interest account receives PAX, the interest accrual will begin automatically.
- Low Risk
Comparing other financial instruments offering similarly high interest, earning interest on PAX involves lesser risk. Yet, we don't deny that there are risks. But most of the crypto interest account providers manage the risks by mandating over-collateralization to obtain loans from them.
- Passive Income
If you begin earning interest on Paxos Standard, you will add a passive income source, which is the best form of income today. The interest income on your PAX holdings will keep on growing round the clock, even while you are asleep.
Where can I earn Interest on Paxos Standard?
As Paxos Standard is one of the most popular stablecoins, there are multiple options to earn interest on PAX. But the top ones among all the available options are Nexo, Celsius Network, and YouHodler.
A leader in the crypto lending space, Nexo offers interest account for a variety of cryptocurrencies. With Nexo, you can earn up to 12% interest on your PAX holdings if you meet their criteria. First, you will have to agree to receive your interest payout in NEXO tokens. Then, 10% or more of your investment portfolio on Nexo must be in NEXO tokens.
Another requirement is that you must agree to lock your funds for a one or three months period. If you meet the first two requirements and not the third one, you will only receive 10% interest on your PAX deposits.
Celsius Network offers interest up to 12.65% on Paxos Standard. It is the highest interest rate available on PAX currently. But to earn this interest on Celsius Network, you must meet their criteria. Also, you must agree to receive interest payout in CEL tokens, Celsius's native token. But to earn an interest payout in CEL tokens, you should not be from the United States and its territories. Thus, US residents cannot earn the highest interest rates Celsius Network offers. They can only receive 10% interest on PAX tokens. Any international users of Celsius Network will also earn 10% interest on Paxos Standard if they do not agree to receive interest payout in CEL tokens.
With YouHodler, you can earn 12% interest on Paxos Standard. They do not have any specific criteria to earn the highest interest rates on PAX, and neither do they have a native token. Hence, you don't have to receive an interest payout in their native token to become eligible for the highest interest rates they offer. As for the duration of interest payout, YouHolder follows a weekly schedule for it. There are no lock-in periods on YouHodler. So, you are free to withdraw your Paxos Standard funds from your account anytime you wish.
Is it Risky Earning Interest on Paxos Standard?
Yes, it can be risky. Almost every crypto interest account provider makes money by lending cryptocurrencies and fiat currencies. They charge high interest from their borrowers and share a part of their income with their interest account holders in the form of interest. As their main business involves lending cryptocurrencies and fiat currencies, there is a risk. Most of them manage the risks by asking for over-collateralization from their borrowers. But there are a few platforms that don't have a mandatory over-collateralization to obtain loans from them.
If you opt for an interest account with such platforms, your funds will be at higher risk. These platforms offer comparatively higher interest to interest account holders, and thus, many users join their platform. Let's say that some of their users start defaulting on loans, and at the same time, their collateralized assets start losing value. In this case, the platform will lose funds. They won't be able to recoup the entire sum they had loaned. Thus, the platform will fail to pay interest to some of their interest account holders, or they may only pay a portion of the interest payout they were liable to pay. If the loan default numbers are high, the platform will go bankrupt. In the case of bankruptcy, the interest account provider won't be able to refund their interest account holders.
A large number of interest account providers have insured their user funds today. So, would it be enough to cover the entire loss? That depends on the insurance amount and the funds lost by the platform. If the insurance amount is enough to cover the losses, the platform's interest account holders will receive back their funds in full. But if it isn't enough, they may only receive only a part of their funds.
You must know all about the platform before you sign up and deposit PAX into your interest account on their platform. You can read BitCompare reviews on almost every interest account provider in the market to know more about them.
What to Look for When Choosing a Platform?
Choosing a platform is the most crucial part of earning interest on any cryptocurrency. You must research in-depth to select the most credible options available to earn interest on PAX safely. While choosing a platform, you must also check and ensure that the platform meets some specific criteria. The two most crucial factors are duration since the platform is active in the industry and the interest rates they offer. Both of these are equally important.
A platform offering the highest interest rates does not automatically mean that it is a credible platform. You must check their reputation in the industry and what their users think about them. You can check about them on popular review sites like Trustpilot and social media platforms.
Next, you must check if the platform has insured its user funds or not. Insurance is a crucial factor. Imagine if a platform loses its funds because of any reason like hacking or bankruptcy. If the platform has an insurance cover to protect its user funds, the insurance company will step in and pay the insurance amount to the platform. The insurance funds will then be distributed among their interest account holders.
Another thing that you must check is the criteria that the platform has to earn the highest interest rates offered by them. Many platforms require their users to earn interest in native tokens, whereas some demand that their users lock their funds for a specific duration. A few will mandate meeting both of these criteria to earn the highest interest rates the platform offers.
Overall, you must spend some time researching and single out the platform that matches all these criteria before finalizing a platform to earn interest on Paxos Standard. You can rely on BitCompare reviews to know about every major interest account provider and use our interest-earning calculator to calculate how much you will earn by depositing Paxos Standard in your interest account.