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Revix disrupts the bank savings market with its 12% annual interest account

Revix’s recent launch of a savings vault paying 12% per annum on USDC, a US dollar-backed stablecoin, is a prime example of how decentralized finance (DeFi) and blockchain technology are disrupting traditional financial markets.

The beauty of this product is that returns are paid in USDC, which is backed 1:1 by the US dollar.

“Not only is this a way for South Africans to protect their wealth by earning more than inflation, but interest is paid in USDC, instead of rand,” says Brett Hope Robertson, Chief Investment Officer at Revix.

The table below compares the annual returns of Revix Savings Vault with those of the average bank in South Africa and the United States.

The average South African bank pays just under 5% a year, while consumer inflation is 5.9%. This means that you are losing value in real terms by investing in a traditional bank savings account.

“That doesn’t even take into account that over the past 10 years, the South African rand has depreciated by around 4.3% per year against the US dollar. The direct result is that the average wealth of a South African, measured by international standards, has depreciated by 4.3% every year for the past 10 years,” says Hope Robertson.

The corrosive effect of inflation on the rand is illustrated in the chart below.

“Concretely, if you have held your savings in a South African savings account for 10 years, it has lost around 46% of its international purchasing power. Considering we haven’t even factored US inflation into this calculation yet, it becomes quite apparent that the long-standing savings account may no longer be a viable way to preserve wealth.” , says Hope Robertson.

Traditional offshore savings accounts don’t offer much refuge from this predicament either, given the technical and legal challenges of investing in offshore accounts. This prompted Cape Town-based crypto investment firm Revix, which is backed by JSE-listed financial services group Sabvest, to launch its 12% per annum Savings Vault.

“This is a perfect example of combining the power of crypto and DeFi to provide a solution for South Africans. The Revix Savings Vault allows saving in a US dollar denominated account, without having to go through hurdles, while offering a return of 12%”, adds Hope Robertson.

How is it possible?

DeFi has rewritten the rules of the savings account.

For most people, the word cryptocurrency still only means bitcoin, but the crypto landscape has grown exponentially to become much more than bitcoin. DeFi is a comprehensive financial services ecosystem that operates without any central authority and is accessible to everyone. DeFi could indeed become the next phase in the evolution of the global banking and financial system, but it is already changing the way investors think about one of the oldest and most trusted investments, the humble savings account. .

To understand how DeFi has overturned the concept of the savings account, just look at the numbers. Let’s imagine that a bank offers its client a return of +1% on its savings. Behind the scenes, that bank then lends that money to another customer with +5% interest and pockets the +4% profit.

What if it was possible for this client to lend their savings directly to others in complete safety, thus obtaining the total return of +5%? Facilitating exactly this type of direct transaction between people while cutting out the middleman is what DeFi makes possible.

By using decentralized apps built on DeFi protocols (Apps), you can lock your crypto into the vault and earn an APY [annual percentage yield] for the duration of the blocking period. Unlike a traditional savings account, Savings Vaults use these protocols to provide you with the full return you deserve.

This new generation of savings accounts has largely been made possible by a specific type of cryptocurrency, called a stablecoin. Understanding stablecoins is essential to understanding savings vaults.

What is a stablecoin?

Stablecoins are different from traditional cryptocurrencies because they are backed by an asset, such as the US dollar or gold. In other words, they are simply token versions of the US dollar, gold, or other reserve assets. This keeps their prices stable, so they are not subject to the same level of volatility as other cryptocurrencies.

Stablecoins are designed to be a middle ground between traditional cryptocurrencies and fiat currencies like the US dollar. Although they are still a type of cryptocurrency and can be used as a form of payment, they don’t have a roller coaster of ups and downs.

Stablecoins and savings vaults are therefore a viable solution to the erosion of wealth resulting from the depreciation of the local currency. A USDC-Based Savings Vault allows you to efficiently convert your savings into US dollars while earning a 12% return on your stablecoins.

This way, you avoid the depreciation you would incur if you held rand (+4.3% gain) while earning an additional 12% on those assets. Assuming you get 12% on your balance Savings Chest, this double gain would result in a net return of +16.3% on your South African rand. Compare that to the actual performance of your average traditional savings account and the difference is staggering.

How to Start Saving and Earning 12% in USDC

Revixsaw the value of bringing a USDC Savings Vault to South African investors very early on. For more than a year, Revix’s US dollar-denominated flexible savings account has offered an interest rate well above the rest of the market.

Now the long-standing trust Revix USDC Savings Vault has been enhanced to provide investors with an even higher annual return. This allows you to easily earn interest using your USDC assets, just like a high-yield US dollar savings account. The only difference being that you will earn a return far greater than any dollar savings account can offer.

Since May 6, Revix’s Savings Vault offers a 12% annual return on your USDC. A minimum investment of 100 USDC is required to qualify, and there is a minimum lock-up period of 30 days so as not to attract fees. The T&Cs apply.

Brought to you by Revix.

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