New crypto wallet systems are increasingly taking advantage of decentralized finance tools for optimized digital lending processes. This can eliminate some of the bottlenecks in lending processes, and improve communications, but it can also contribute to better yields and gains for investors.
Edge is a Bitcoin wallet creator with a specific history of offering data security to the tech world: when the company launched its first Airbitz Bitcoin wallet in 2014, its design was based on the philosophy of edge security, or handling security processes at the edge of a network. This type of implementation has become very much a best practice in the security world, for several reasons. New network builds use it to hide DNS and IP data. Digital finance companies use it to foil hackers who would try to pilfer sensitive data or crypto assets.
Recently, Edge announced that their platform is going to use Cred to offer highly competitive interest rates to asset holders.
“We’re excited to introduce our users to Cred, a company that shares our deep commitment to innovation, security, and risk management,” said Paul Puey, CEO, and Co-founder of Edge in a press statement. “Cred stood out to us for many reasons — the caliber of its team, the strength of its legal and regulatory infrastructure, its capital markets competencies, a proven track record of delivering returns, and its scale. Edge users now have the benefit of earning interest on their crypto via a secure and licensed financial services platform.”
The new announcement means that in addition to enjoying world-class security for held assets, Edge asset holders will be able to utilize Cred’s unique digital credit model to earn on what they hold.
The Role of Decentralized Finance in Lending
In the traditional lending world, money moves through verified means, between centralized parties like banks. This requires significant time and effort – cost which the banks pass on to those ordering transactions.
The new process of decentralized finance means that money can move over the Internet through a consensus model.
Essentially, the top-down financial hierarchy is replaced by a system where transactions and accounts are verified based on simple group observation – think crowdsourcing finance on a global scale.
The Cred Model
Cred founders explain it this way: “We take our cut for insurance, licensing and liquidity, and return the rest to you.”
With decentralized financing comes a raft of opportunities, but many companies are slow to take advantage of them. Cred is on the vanguard of this work, translating the big savings and efficiencies of the new model into real money in the form of potential gains for its users.
In a sense, while your crypto is sitting in its wallet, Cred has that crypto out and working in the community, in the form of active capital in one manner or another.
While banks tend to offer low interest on depositor accounts and ratchet up the interest on loans, Cred offers a flat 10% rate of interest on both sides of the ledger. That’s a very different approach than you see in the traditional finance world – and in the end, it might be one of the reasons you see pushback from firms that would prefer to keep making money the old way, even if it takes money out of the end user’s pocket.
Cred’s build is quite a revolutionary accomplishment in a world where it’s generally hard to secure any kind of significant interest on held assets. The Cred system of pledging and holding assets allows for this kind of greater capital return regardless of various factors that will push traditional yields down: for instance, you don’t often hear crypto holders nervously scanning their FICO scores.
Cutting-edge wallet security. Check. Excellent rates of return. Check. New potential for long term gains based on institutional and consumer interest in crypto. Double check. Check out the Edge/Cred partnership as it rolls out, to enjoy the benefits of DeFi gains in a convenient way.