StraitsX Earn offers StraitsX business accounts the ability to earn returns of up to 4% APY on their XSGD. To begin using StraitsX Earn, businesses simply need to allocate minted XSGD from their StraitsX account into StraitsX Earn.
We are committed to our objective of creating a trustworthy stablecoin ecosystem, while allowing for businesses to maximise the value of their XSGD.
StraitsX Earn holds user funds in XSGD or USDC only, providing them directly to DeFi liquidity pools (LPs). When the liquidity pools are used for swapping between XSGD and USDC, transaction fees are paid, allowing StraitsX Earn to receive a cut of these fees as reward for providing liquidity. This reward in turn allows StraitsX Earn to offer a payout to users.
StraitsX Earn users’ funds are currently being deployed into the Uniswap XSGD/USDC liquidity pool. Such liquidity pools of XSGD/USDC pairings provide minimal volatility through stablecoins fully backed by strong underlying currencies unlike other crypto assets.
It is crucial to note that yield from liquidity pools is generated from usage and transaction volumes, and thus asset prices do not play a part in yield quantity.
To illustrate, a bullish crypto market typically generates additional DeFi activity and hence transaction volume, leading to high yields in liquidity pools. On the flip side, a down market may lead to lesser DeFi activity, but there will still be activity (and yield) on liquidity pools. There is always a baseline usage for stablecoin liquidity pools due to arbitrage opportunities between the stablecoin pair exchange rate and the real-world foreign exchange rate. In other words, whenever real-world SGD/USD FX prices shift, arbitrage induces activity in the XSGD/USDC liquidity pool, which then generates yield.
To further mitigate the volatility brought about by DeFi transaction volumes, when DeFi yields are low, StraitsX Earn is committed to supplementing payouts to users using corporate funds or through earlier profits.
We will always inform users one week in advance of any adjustment in rates, and users may redeploy their funds at any time as they deem fit.
Submit your interest in StraitsX Earn here today.
*This article has been revised as of 9 January 2023.