What is Earn?
Earn is a feature that allows Swyftx users to earn interest on certain cryptocurrencies that they hold on the Swyftx platform. Under the Earn feature, users can loan their cryptocurrency to Swyftx in exchange for interest that is paid at the rate advertised for that cryptocurrency on the platform.
What does it mean for a user to loan their cryptocurrency to Swyftx under Earn?
Historically, the lending of assets has been a return-generating mechanism restricted only to institutions. By facilitating a loan involving crypto assets, Swyftx seeks to revolutionise this type of return generation, by providing all users the ability to loan cryptocurrency that they own in return for interest.
When a user elects to loan their cryptocurrency under Earn, that user enters into a loan agreement with Swyftx. Users will start generating interest on the cryptocurrency that is loaned from the moment they enter into the loan agreement, until the time at which they elect to withdraw from the loan agreement.
What are Earn Caps, and what does it mean when they are reached?
The Swyftx Earn Cap is an upper limit on the total pool of each cryptocurrency under Earn. Once the Swyftx Earn Cap is reached, customers will no longer be able to opt in to Earn with that particular cryptocurrency. We will be regularly reviewing the Swyftx Earn Cap for each cryptocurrency and will announce changes to that Cap on the platform.
What does the reference to Annual Percentage Yield (“APY”) on the Swyftx platform refer to and how does it apply to each Tier?
APY (or Annual Percentage Yield) refers to the interest received for the cryptocurrency that is loaned, expressed as an annualised percentage. Swyftx offers a tiered model of interest, with interest rates decreasing at each incremental tier. By way of hypothetical example, say you hold 50,000 units of cryptocurrency X that has the following tiered model of APY rates:
Tier 1 (0 – 10,000 units): 10% APY
Tier 2 (10,000 – 20,000 units): 8% APY
Tier 3 (>20,000 units): 6% APY
Under this hypothetical scenario, the following APY rates would apply to your balance of 50,000 units:
10% APY would apply to 10,000 units (first 10,000 units under Tier 1)
8% APY would apply to 10,000 units (second 10,000 units under Tier 2)
6% APY would apply to 30,000 units (remaining 30,000 units under Tier 3)
What are the rates for each Tier?
You can view a list of the current APY rates per tier, per asset here.
What happened to Staking?
Any asset that was previously eligible for Staking on the Swyftx platform can now generate a return under Earn. Swyftx has transitioned from offering ‘Staking’ to ‘Earn’ as the Earn offering gives us the ability to provide a greater range of assets on which users can generate a return. Swyftx will continue to stake assets on-chain directly with relevant protocols as part of the yield generation strategy for the 'Earn' feature.
What happened to my staked assets?
If you opted-in to Earn during the opt-in period, any assets that were previously staked on the Swyftx platform will have automatically transitioned to your equivalent Earn Wallet. If you chose to opt-out or missed the opt-in period, any assets that were previously Staked will have automatically transitioned back to Trade wallets.
Is there a minimum period that cryptocurrencies must be loaned for under Earn?
No. At present, we are offering Earn as an ‘at call’ loan between you and Swyftx. This means there is no minimum period for the loan, and you may withdraw your loaned assets at any time. We may choose to offer fixed term Earn contracts in future to allow us to offer even better rates.
Is there a fee associated with Earn?
No, there are no fees associated with our Earn service.
What cryptocurrencies are available under Earn?
The cryptocurrencies that are available under the Earn feature are displayed under the ‘Earn Wallet’ on the Swyftx platform. These will be regularly reviewed by Swyftx, with additional cryptocurrencies made available when possible.
How is my interest calculated?
All Earn Wallet balances are compounded daily using the equivalent RPY rate from the APY rate displayed on the Swyftx platform. Interest is earned continuously and is credited to your Earn Wallet each day shortly after 11am AEST.
A simplified example (using hypothetical balances and rates) is outlined below:
Earn Wallet balance: 365.25 USDT
APY displayed on Swyftx platform: 5.13% (Tier 1 APY applying to whole balance)
Converted to the equivalent RPY rate of 5%
Daily reward: (365.25 USDT x 5%) / 365.25 = 0.05 USDT
If you do not withdraw any of your loaned USDT, the following day’s interest payout will be calculated on a balance of 365.30 USDT (365.25 USDT + 0.05 USDT). Daily interest payouts will be prorated for any partial days for which a balance is loaned.
What is the difference between APY and RPY?
Annual Percentage Yield (APY) is the annual percentage rate of investment returns including compounding interest. This generally results in a higher advertised rate, as interest compounded over the investment period results in a higher percentage rate (than interest without compounding). We use this to advertise what your annual investment return could be (assuming your investment amount does not change after the initial investment is made).
Rewards Per Year (RPY) is the annual percentage rate excluding compounding interest. This generally results in a lower advertised rate, as it only considers the initial investment amount and not compounding interest that applies over time. We use this to calculate your next expected payout (noting that the actual value of the payout may fluctuate due to the market value of the underlying asset fluctuating).
Why can’t I loan every individual cryptocurrency I hold under the Earn feature?
The Earn feature is only available for certain cryptocurrencies as published on our platform. However, we will review these regularly and try to include more assets in the Earn feature over time.
Why do different cryptocurrencies have different Earn APY rates?
The APY rates offered by Swyftx on each Earn cryptocurrency reflect Swyftx’s ability to generate a return on that cryptocurrency. Swyftx aims to provide competitive returns to its customers on each Earn cryptocurrency and reassess its rates from time to time.
What is my ‘Trading Wallet’ and my ‘Earn Wallet’?
Your ‘Trading Wallet’ refers to the wallet which holds any cryptocurrency that is not currently generating interest in your ‘Earn Wallet’. This wallet represents the cryptocurrency that you are immediately able to trade. Your ‘Earn Wallet’ refers to the wallet which holds any cryptocurrency that is loaned to Swyftx under Earn. Cryptocurrency held in this wallet will be generating interest in accordance with the rate displayed on the Swyftx platform from time to time. When you choose to loan a cryptocurrency under Earn, that cryptocurrency is transferred from your ‘Trading Wallet’ to your ‘Earn Wallet’, with the reverse occurring when you choose to withdraw your cryptocurrency from Earn.
Why can’t I trade my balances that I have loaned under Earn?
Cryptocurrency balances that you have elected to loan are held in an ‘Earn Wallet’ that is separate to your ‘Trading Wallet’. Balances held in your Earn Wallet are unable to be traded unless they are withdrawn from the Earn loan agreement, in which case they are automatically transferred to your Trading Wallet.
How long do I need to hold a cryptocurrency before I can loan it?
There is no minimum holding period before you are able to loan your cryptocurrency under Earn.
Is there a minimum loan amount under Earn?
Yes, the minimum loan amount for a cryptocurrency is $1 AUD in value for Australian customers, $1 NZD in value for New Zealand customers. Further, interest will stop accruing on a particular cryptocurrency if your Earn balance for that cryptocurrency falls below $1 AUD in value for Australian Customers or below $1 NZD for New Zealand Customers.
Is there a maximum loan amount under Earn?
TAUD is the only cryptocurrency currently available under Earn with a limit on the amount of the cryptocurrency that can be bought and loaned to Swyftx. Individual customer limits displayed on the Swyftx platform.
There is no individual customer limit on the value or quantity of any other cryptocurrency you can loan, subject to that cryptocurrency’s Swyftx Earn Cap. You are able to loan up to 100% of your cryptocurrency balance until that cryptocurrency’s Swyftx Earn Cap has been reached. When a Swyftx Earn Cap has been reached for a particular cryptocurrency, you will be unable to loan that cryptocurrency until either the Cap is increased, or other users withdraw their loaned cryptocurrency. We will be regularly reviewing the Swyftx Earn Cap for each cryptocurrency and will announce changes to that Cap on the platform.
Is Earn available on the Swyftx app and the Swyftx web platform?
Yes, both the Swyftx app and Swyftx web platform have full Earn functionality.
What are the risks involved?
When entering into any loan agreement, there is a risk of default on the loan if the debtor (being Swyftx) is unable to repay the creditor (being the customer opting into Earn). Swyftx will use its best efforts to ensure this does not occur, but this is a risk each user must consider before opting into Earn.
Further, Earn is subject to the risks associated with holding cryptocurrency which is a volatile type of asset. Users should consider that, if the price of the cryptocurrency on loan decreases, then the interest earned under that loan may not be enough to cover the loss in the overall value of your loaned cryptocurrency.
Does Earn interest need to be claimed manually or will it auto compound in your Earn Wallet balance?
Interest received through loaning cryptocurrency under Earn will be calculated daily, and automatically credited to your account shortly after 11am AEST each day. You can also earn interest based on the amount of time your cryptocurrency is loaned in any given day). For example, if you loan a cryptocurrency at 8am on a particular day and withdraw that cryptocurrency from the loan agreement at 9am that same day, shortly after 11am your account will be credited with one hour’s worth of Earn rewards.
In which currency will I receive my interest?
Earn interest is paid out in the currency of the loaned cryptocurrency. For example, if you have loaned USDT, you will receive your Earn interest in USDT.
Why does the APY of a cryptocurrency fluctuate?
I have not withdrawn any cryptocurrency from Earn, why has the value of my Earn Wallet balance decreased?
As with all cryptocurrencies', loaned cryptocurrency is still subject to fluctuations in market price movements. Any such decreases in the value of your Earn Wallet balance (which is not the result of a withdrawal by you) will be due to decreases in the market value of the loaned cryptocurrency.
Why does my next expected payout amount fluctuate?
The value of your next expected payout amount is calculated based on the current market price of the cryptocurrencies you have loaned under Earn. As a result, the value of your next expected payout amount is subject to movements in the market price of the cryptocurrencies that you have loaned.
Why does the value of my total Earn payout fluctuate?
The value of your total Earn payout is calculated based on the current market price of the cryptocurrencies in which the interest has been paid. As a result, the value of your Total Earn payout is subject to any movements in the market price of the cryptocurrencies that you have loaned under Earn.
Is there a minimum value for my next expected payout amount?
No, there is no minimum value for your next expected payout amount. However, interest will be not paid if your Earn balance for a particular cryptocurrency is below $1 AUD in value for Australian customers or below $1 NZD in value for New Zealand customers.
Will I be taxed on my interest from Earn?
Generally, interest received from lending cryptocurrency will have tax implications. While we have factual articles on the general tax situation of cryptocurrency in Australia this is not advice – please consult a tax professional who can provide advice specific to your circumstances.
Can I loan my fiat currency held on the platform?
No, Earn is available only for specific cryptocurrencies on our platform.
Can I transfer cryptocurrency from another platform directly into my Swyftx Earn Wallet?
No, any cryptocurrency deposited onto the Swyftx platform will be held in your Trading Wallet. Once deposited, you will have to elect to loan those cryptocurrencies by opting into Swyftx’s terms for Earn.
What is TAUD?
TAUD is a stablecoin that mirrors the Australian Dollar (1:1). A stable coin is a type of cryptocurrency with a value is pegged to another asset (in the case of TAUD, the Australian Dollar). This means that 1 TAUD is worth 1 Australian Dollar.
Why can’t I withdraw my TAUD?
At present, we limit the use of TAUD to the Earn feature. This is because the total supply of TAUD is lower than other stablecoins, and we want to give each of our customers the opportunity to Earn in TAUD up to a reasonable cap. You can still withdraw the value of your TAUD by opting out of Earn and withdrawing the value of your Earn Wallet in fiat.
What is USDT?
USD Tether (known by its ticker USDT) is a stable coin that mirrors (1:1) the price of the U.S. dollar. This means that 1 USDT is generally exchangeable for 1 US Dollar. This ratio is maintained by Tether in the Tether Reserves. USDT is governed by the Hong Kong-based company Tether. There are risks involved related to the pegging of stable coin cryptocurrencies to the fiat currency that they mirror. Read more about USDT.
What is USDC?
USD Coin (known by its ticker USDC) is a stable coin that mirrors (1:1) the price of the US dollar. At any given time, you can redeem one USDC for one USD. The coin is governed by Centre, which is a membership-based consortium that sets standards for stable coins. There are risks involved related to the pegging of stable coin cryptocurrencies to the fiat currency that they mirror. Read more about USDC.
What’s the difference between USDT and USDC?
USDT and USDC, are both pegged to the value of the US Dollar. However, the teams that run these projects and the mechanisms behind them are not identical. You can compare these projects for yourself via the following links, USDT and USDC.
If you have any further questions regarding our Earn feature, please don't hesitate to get in touch with our friendly support team and we'd be more than happy to assist!