Market Update on APY

July 8, 2022
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To our valued Coinchange community,

The crypto industry has experienced extreme volatility and instability in the last few months. It is in part due to the current macroeconomic environment, recessionary fears, run-away inflation, and world-wide market sell-offs. The rest comes as a result of crypto related events, such as the de-pegging of TerraUSD, the fall of sister token LUNA, and a significant price drop in Bitcoin and other popular cryptocurrencies. The latter caused massive landing platforms to freeze consumer assets as institutional investors began defaulting on their debt obligations.

The crypto industry, on the other hand, has not only been wrestled with a mixture of bad news. Ether’s price seemed to benefit from optimism about the upcoming Ethereum Merge that will see the protocol move from a proof-of-work to proof-of-stake model, and many blockchain projects remain active. It is important to note that the underlying technology has not changed, and that DeFi remains at the heart of our core business-model.

We generate yield in a different way than most platforms you hear of today. We do not participate in the lending, borrowing, or trading of assets with centralized institutions. We purely act as liquidity providers to a diversified pool of protocols and earn yield based on the transaction fees we collect from those pools. These aforementioned events, unfortunately, do affect our ability to generate competitive APY with our current risk-averse and market-neutral yield-generating approach.

This happens for 2 reasons: 1. The amount of transitions dramatically dropped due to market conditions and seasonal activity drop, and 2. Blue chip protocols we work with continue to reduce transaction payouts.

We relentlessly work to improve our returns while ensuring safety of your principal investment. Our research and development team is in the process of producing new algorithms and methodologies to cover a wider range of protocols and techniques that will boost returns, but our core belief will remain the same, which is that your assets remain on-chain, diversified, market-neutral, and will not be involved with any lending and borrowing activities with CeFi counter-parties.

Thank you for trusting us with your business,

The Coinchange Support Team

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