Australian fintech firm Block Earner has officially launched, offering everyday investors a 7% fixed rate investment product leveraging decentralized finance (DeFi) technology.
Block Earner has already caught the attention of big names in the crypto industry, raising a $6.4 million seed funding round in December last year. It was led by Framework Ventures and was backed by Coinbase Ventures, DeFi Alliance, LongHash Ventures and crypto space veteran Kain Warwick, founder of Synthetix, an Australia-based crypto derivatives exchange.
Block Earner co-founder Jordan Momtazi said in an interview for Cointelegraph that Australia’s current economic landscape makes products that offer returns on savings attractive, especially when it’s virtually impossible to generate similar returns using the methods they offer traditional financial institutions.
According to a poll by Block Earner and Sydney-based market research firm Pure Profile, 86% of Australians polled have noticed the recent impact of inflation and 22% of respondents are concerned about how it will get there, taking into account the rise in prices of goods and services.
Momtazi compared the difference in benchmark returns between traditional finance and DeFi and said:
“The best return Australians can get from a traditional savings account is between 0.1% and 0.3% – compared to a 7% product like Block Earner, it’s easy to see where people are landing.”
Momtazi went on to say the whole point of Block Earner is to ensure ordinary Australians have access to new technology without “heavy lifting” so 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 lends these USDC in two major DeFi protocols, Aave and Compound, providing investors with a yield.
It’s also worth noting that Block Earner is the first fintech company to grant mainstream integration with Aave and Compound.
Though Momtazi promises investors will receive a 7% fixed return by July this year, he added that Block Earner’s floating rate product could reward investors with a return of up to 18% per year.
The burgeoning and largely unregulated DeFi ecosystem is not without risks and companies like Block Earner remain exposed to the issues that occasionally arise with DeFi such as ) suffering some type of attack.
Momtazi emphasized that Block Earner is a “conservative” company, noting that the company “chooses stablecoins like USDC for their security and legitimacy.”
“We believe conservatism is part of the long-term project. We believe security and trust are a fundamental part of a long-term strategy, and we don’t choose the double digital profitability of other less regulated spaces.”
To allay the fears of crypto skeptics, Momtazi went on to state that Block Earner’s continued performance will gradually prove DeFi’s legitimacy over time.
“New is always seen as scary and it is normal that we will prove the legitimacy of DeFi technology with continued performance.”
Although Block Earner is registered with Australian financial intelligence agency AUSTRAC and protects investor funds with Fireblocks, one of the world’s largest digital custodians, the company did not have to apply for an ASIC license.
Regarding the issue of possible Australian government regulation of DeFi products, Momtazi was completely optimistic, stating that the regulation is a positive step for the cryptocurrency industry and that Block Earner is ready to adapt to the changes in regulatory measures that the Australian legislator deems appropriate.
“The legislation legitimizes this space much better […] and so far things have been very positive in terms of regulation; Enforcing the rules around custody of assets and maintaining the minimum level of auditing, bringing all of that is just a positive thing.”
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