Crypto savings accounts are quickly becoming an attractive option over traditional savings accounts. As interest rates drop – sometimes negatively – people try to maximize the passive returns on their crypto assets.
In Krakens previous report on decentralized fundingwe examined how attendees are maximizing their key crypto returns by participating in liquidity pools and lending platforms. In this latest report, Kraken Intelligence Centralized Finance (CeFi) examines and the associated risks that can be associated with using these platforms.
CeFi platforms offer more accessible fiat ramps and the ability to take out a cash advance. These amenities come with a number of conditions. For example, users must trust the platform’s custody and security practices and comply with identity checks at the discretion of the managing authority.
However, CeFi is expanding access and financial services to people around the world. These platforms are proving to be an important component for the introduction of cryptocurrencies. As participants seek more information on the risks associated with using CeFi platforms, this report provides a detailed analysis of:
- Risks of the CeFi platform and respective remuneration rates
- Failure risk
- Custodian risk
- Trust and Transparency Risk
- Market risk
Getting a return on your crypto can be beneficial. Whether you’re looking to generate passive income, grow your inventory, or secure your investments, this report will help you better understand the risks associated with CeFi platforms and see if the benefits are worth it.
To learn more about Crypto Yields, check out our previous editions of the series: