The Litecoin Foundation Partners with Cred to Offer 10% Interest on Litecoin Deposits

February 11, 2020 / by Crypto.IQ

The Litecoin Foundation and decentralized finance (DeFi) platform Cred have announced that users can now earn up to 10% interest annually on Litecoin (LTC) deposits, with the stipulation that the coins must be committed for a minimum of 6 months, although interest payments will occur monthly.

Basically, Cred is now offering a Litecoin (LTC) savings account, with interest rates well above the roughly 0.5% to 1.5% of interest paid by banks in the United States. That being said, Litecoin (LTC) is quite volatile, so the value of the deposited Litecoin (LTC) could end up declining even when including the interest payments. Essentially, the 10% reward comes with some risk, like pretty much any other investment.

Cred functions similar to a bank, and loans out the deposited Litecoins (LTC) to retail investors and money managers. Cred claims that these loans are fully collateralized and guaranteed, so there is no risk for the depositor.

Further, Cred works with crypto custodians like BitGo, and has insurance through Lockton, in order to prevent the eventuality of the platform going bankrupt due to a hack.

Notably, the Litecoin Foundation will apparently be making money with this partnership in order to fund development, although it is unclear if the Litecoin Foundation is depositing money with Cred and earning interest, or if the Litecoin Foundation is borrowing some of the Litecoin (LTC) deposits.

Regardless, this partnership will inject some much needed capital into the Litecoin Foundation, while giving Litecoin (LTC) users a new passive way to earn crypto.

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