Coinchange brings a new and easy way to DeFi

Without a doubt, the world is yet to recover from the unprecedented surge in price and FOMO Bitcoin caused in 2020. Even more remarkable is that Bitcoin – and altcoins – are showing no signs of slowing down. Obviously there is no mistaking that cryptocurrencies deserve the amount of attention they are getting. However, there is even more to their potential in the finance space than meets the eye.

Decentralized finance: The next phase of crypto development

It’s impossible to talk about the success of crypto in the past couple of years without noting the massive contribution of the Decentralized Finance (DeFi) landscape. With over $101 billion locked in the DeFi market, the buzz surrounding yield farming protocols has brought new growth dynamics to the space.

We are witnessing a growing list of DeFi innovations today that aim to distribute the wealth and governance of the crypto economy so that financial products aren’t susceptible to the manipulations (actions and inactions) of a cluster of entities.

For neophytes in the crypto space however, DeFi can be daunting and gloomy. It can feel DeFi is the combination of everything you don't know about finance, and everything you don’t understand about computers. To bring an end to this, solutions like Coinchange have emerged as a means of democratizing finance and bringing DeFi to the masses. In other words, users can easily navigate the simple design and methodology of the Coinchange platform to eliminate the complexities that come with DeFi and earn yield for themselves.

What is coinchange?

Coinchange is a consumer fintech company that provides high-yield generating opportunities of DeFi to consumers with sophisticated simplicity, so they don’t have to bother about technical jargons.

Originally launched in 2017 as a crypto brokerage platform, Coinchange pivoted towards high yield farming when the DeFi space exploded in 2020. Today, they offer two core products: a trade account that acts as a fiat on and off chain, and a yield account offering high yield returns on stable coins investments.

How does it work?

For Coinchange, simplicity is the watchword. Coinchange is a carefully designed platform that offers two core products, the trade account and the yield account.

The trade account allows users to seamlessly deposit and withdraw fiat through wire transfers, ACH or debit cards; buy cryptocurrencies such as Bitcoin, Ethereum, USDT, and USDC; and make transfers to and from their non-custodial wallets.

The yield account works differently as a means to generate passive income for users and stable coin depositors. This is the flagship product of Coinchange. Their yield farming strategy is different from other similar products like BlockFi, Nexo and Celcius – instead of lending the users’ crypto to institutions, they provide liquidity to stable coin pools, thereby ensuring risk-free passive income.

“In the background, we take in USDT and USDC deposits and feed that liquidity into multiple DeFi protocols and pools, including Uniswap, Sushi, and PancakeSwap, based on a comprehensive risk-analysis approach, and then we distribute a portion of the yield we make to our customers” said Maxim Galash, Coinchange CEO.

They achieve their results through sophisticated algorithms that monitor crucial data points such as liquidity, fees, slippage, volume, price and more for real-time optimization and adjustment of positions.

Democratizing investment and fund safety

Coinchange is a carefully designed platform that curates passive income generating opportunities of DeFi, and seamlessly offers it to users. The goal is to provide users with opportunities through a product that looks and feels like the typical bank apps they are already accustomed to. This eliminates any barrier to entry for people not familiar with DeFi.

There are currently ways to earn 10 - 20% in the centralized traditional markets today, but those are barely available and accessible to regular people. Coinchange aims to change this by bringing the same benefits and investment opportunities to everyone. Their commitment to refraining from things like funds lockup, minimum deposit requirements, or hidden fees opens up earning opportunities for people who are usually on the outside looking in. Currently, high yield accounts average about 16% APY on stable coins (USDT & USDC) deposits, which is one of the best rates available both in the CeFi and DeFi space.

Fund safety has been a major concern in the crypto space recently. Coinchange has different risk management strategies in place to protect their customers. They are partnered with well respected third parties to help keep user funds safe – such as Fireblocks to insure customers’ deposits into their trade accounts, and Coincover to ensure that clients can withdraw their funds in the unlikely event that the company loses access.

Regulatory clarity has also been another grey area with DeFi products in the crypto space with the U.S. Securities and Exchange Commission (SEC) cracking down on a lot of similar projects. Coinchange is in fact a fully regulated business in Canada with an MSB license active until 2023. They are also working on ensuring compliance in different U.S. states by working with regulators. Additionally, they are working on acquiring money transmission licenses (MTL) specifically for legally operating in any State in the U.S.

“The next step is becoming a regulated investment advisor (RIA) which would effectively label our products as separately managed accounts (SPA) and make us fully compliant to operate in the U.S.” says Galash.

DeFi and Yield Farming has shaken the internet and crypto space since its rollout. With millions of active users, it is impossible to quantify what the future holds. Will there be more value-adding, more applications to revolutionize the space? Whatever the future holds, it is certain, Coinchange aims to be at the forefront, providing the best and safest way to benefit from DeFi yield farming.