Australian fintech company Block Earner has officially launched, offering daily investors a 7% fixed rate investment product using decentralized finance (DeFi) technology.
Block Earner has already attracted the attention of celebrities in the crypto industry by completing a $6.4 million seed funding round last December. It was led by Framework Ventures and joined by Coinbase Ventures, DeFi Alliance, LongHash Ventures, and crypto veteran Kane Warwick, founder of Synthetix, an Australian cryptocurrency derivatives exchange.
Jordan Momtazi, co-founder of Block Earner, said in an interview with Cointelegraph that the current economic climate in Australia makes products that offer a return on savings attractive, especially when it is nearly impossible to achieve a similar return using the methods offered by traditional financial institutions.
According to a survey by Block Earner and Sydney-based market researcher Pure Profile, 86% of Australians have noticed the recent effects of inflation, and 22% are worried about how they will make ends meet given rising prices for goods and services.
Comparing the difference between the return benchmark between traditional finance and DeFi, Momtazi said:
“The best return Australians can get from a traditional savings account is in the range of 0.1-0.3% – compare that to a 7% product like Block Earner, it’s easy to see where people end up.”
Momtazi went on to say that the whole point of Block Earner is to ensure that everyday Australians have access to new technology without any “hard work” so that they can grow their savings over time.
Block Earner works by converting Australian dollars into a US dollar stablecoin called USD Coin (USDC). Block Earner provides this USDC in two major DeFi protocols called Aave and Compound, which provides investors with income.
It is also worth noting that Block Earner is the first fintech company to provide mass integration with Aave and Compound.
While Momtazi promises that investors will earn a fixed income of 7% until July this year, he added that Block Earner’s variable interest rate product could lead to potential investor rewards of up to 18% per annum.
The growing and largely unregulated DeFi space is not without risks, and companies like Block Earner are still subject to the problems that DeFi comes up with from time to time, such as smart contract failures, lack of demand for lending products and pools. liquidity (Aave and Compound).) is suffering from some form of attack.
Related: Aave launches v3 liquidity pool after management unanimous decision
Momtazi stressed that Block Earner is a “conservative” company, highlighting that the company “chooses stablecoins like USDC because of their security and legitimacy.”
We believe that conservatism is part of a long-term project. We believe that security and trust are a fundamental part of a long-term strategy and we simply do not choose to double digitally pay off other less regulated areas.”
Moderating the fears of cryptocurrency naysayers, Momtazi went on to say that the ongoing work of Block Earner will gradually prove the legitimacy of DeFi over time.
“New things always seem intimidating, and this is natural – we will prove the legitimacy of DeFi technology by continuing to work.”
Although Block Earner is registered with the Australian financial intelligence agency AUSTRAC and protects investor funds with Fireblocks, one of the world’s largest digital custodians, the company did not need to apply for an ASIC license.
Talking about possible regulation of DeFi products by the Australian government, Momtazi was completely optimistic, saying that regulation is a positive move for the cryptocurrency industry and Block Earner is ready to fit in with whatever regulation Australian lawmakers see fit.
“Legislation is much better at legitimizing this space… and so far everything regarding regulation has been very positive; enforcing asset custody standards and maintaining a minimum level of auditing are all positive things overall.”