Raise ETH Yield to 2.5% APY

We’re increasing the APY for ETH from 0.2% to 2.5% this week by introducing a new lending partner, Lido Finance.

Interest for ETH is provided by staking your ETH into Ethereum 2.0, which switched to a new consensus mechanism called proof-of-stake (POS). POS is favored over proof-of-work (POW) for its relative energy efficiency and for the fact that it lets users validate transactions by staking their tokens in return for rewards.

Yield earned by staking ETH into Ethereum 2.0 is considered to be less risky compared to lending it out to third-party borrowers. However, it’s not without its limitations.

First, staked ETH is locked and cannot be withdrawn until Ethereum 2.0 is merged into mainnet, which is expected to happen in June 2022.

Second, if a user wants to stake their ETH today, they would need to put up at least 32 ETH (over $10k USD at the time of writing), which is a very high bar for the average retail investor.

Lido Finance was born to solve these two limitations and allow users to stake ETH and earn yield with no liquidity limitations or minimum requirements. Users are able to deposit and withdraw their ETH at any time, which is the ideal experience we want to offer to our DimeFi members.

As of writing this, Lido has grown into the third-largest DeFi protocol with a total value locked (TVL) of $19.19b. It’s backed by well-known investment firms and groups like a16z, Alameda Research, Digital Currency Group, and Three Arrows Capital.

Lido Finance is our first lending partner for our ETH yield program, and we will continue to integrate more partners to diversify our investments and reduce risks in the future.

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