Huobi Launches Crypto Saving Products to Compete With DeFi Yield Farming
Huobi, the third-largest crypto exchange by derivatives trading volume, is now giving users a way to earn relatively attractive interest rates on a bitcoin or USDT savings account. The product, launched Sept. 7, is the exchange’s latest bid to beat its competitors as it boosts its assets under management.
Huobi’s addition targets retail traders less interested or involved in day-to-day trading activities but still willing to receive a certain amount of returns from their digital assets, said Ciara Sun, the vice president of Huobi Global Markets, during an exclusive interview with CoinDesk on Sept. 8.
“Huobi has millions of users but a large percentage of that is not frequent traders,” Sun said. “By offering this saving product in addition to trading, (users) can get sable and flexible income as an alternative use of their crypto assets.”
The service does more for Huobi than meet customers’ needs. It also benefits Huobi’s position as one of the leading crypto exchanges in the world, Sun said. Assets under management have always been one of the key on-chain metrics to grade a crypto exchange’s performance, while other metrics such as trading volumes can be easily manipulated or miscalculated, according to Sun.
Huobi’s crypto saving products provide a more attractive interest rates than any traditional banking services while carrying fewer risks compared with the DeFi products, according to Sun.
Users of Huobi’s crypto savings products receive an annual yield at 8% and 3.5%, respectively, for their deposited USDT and bitcoin, according to the news release. To lure new users, the exchange is giving a specialized account rate of an annualized return of 88% for the first week. Huobi will also distribute 30,000 USDT as a way to bring in users to the product.
“Choosing those different DeFi products out there is very hard for a new crypto user, so it’s a high entry barrier for those customers,” Sun said. “But as there is this DeFi craze happening in the space and people are looking at it and they may be interested and they want to participate in crypto because they see those high returns.”
The initial phrase of the new crypto saving product sets a limit of deposit of 3,000 tether or the equivalent value in bitcoin and Huobi’s security team has added a security and risk control system to protect the users’ funds, Sun said.
OKEx, one of Huobi’s main competitors, meanwhile, has already listed 21 DeFi Tokens in just 30 days, according to the Malta-based crypto exchange’s news release on Sept. 4.