Block Earner, an Australian fintech firm, has launched its product, which uses decentralised finance (DeFi) technology. In order to provide common customers with a 7% fixed rate investment product.
With a $6.4 million seed investment round completed in December of last year, Block Earner has already caught the attention of significant names in the crypto sector. Framework Ventures led the group, which included Coinbase Ventures, DeFi Alliance, LongHash Ventures. As well as Kain Warwick, the founder of Synthetix, an Australian crypto derivatives market.
In an interview, Jordan Momtazi, co-founder of Block Earner, noted that Australia’s present economic condition makes products that give savings yields appealing, especially when achieving equivalent returns using standard financial institution methods is almost impossible.
According to a survey performed by Block Earner and Sydney-based market researcher Pure Profile, 86% of Australians have observed the recent effects of inflation, and 22% are anxious about how they will make ends meet as the price of products and services rises.
Momtazi explained the distinction between traditional finance and DeFi by comparing the benchmark of returns:
“When you compare the best rates, Australians can earn from a typical savings account to a 7% product like Block Earner, it’s simple to see where consumers are going to end up.”
Ordinary Australians have access to innovative technologies
Momtazi went on to clarify that the main goal of Block Earner is to ensure that ordinary Australians have access to innovative technologies without having to do any “hard lifting” in order to grow their money over time.
Block Earner converts Australian cash into USD Coin, a stablecoin backed by the US dollar (USDC). Block Earner invests that USDC in the Aave and Compound DeFi protocols, giving investors a return.
It’s also worth noting that Block Earner is the first financial company to offer Aave and Compound mainstream integration.
Momtazi promises a set 7% return until July of this year. In addition, he also mentions that Block Earner’s variable interest rate offering might payout up to 18% per year.
The nascent and relatively unregulated world of DeFi is not without its dangers. And companies like Block Earner are still vulnerable to problems like faulty smart contracts, a lack of demand for lending goods. As well as attacks on the liquidity pools (Aave and Compound).
Block Earner is a “conservative” organisation, according to Momtazi. Who added that the company “chose stablecoins like USDC due of their security and validity”. We feel that trust and safety are critical components of a long-term plan. And we aren’t willing to sacrifice double digital returns in less regulated areas.”
Momtazi went on to say that Block Earner’s continuous performance will gradually confirm the legitimacy of DeFi over time, assuaging the concerns of crypto sceptics.
“New things are always viewed as frightening, which is understandable. We will continue to demonstrate the legitimacy of DeFi technology through continuing performance.”
Block Earner does not need to apply for an ASIC licence. Because it is registered with the Australian financial intelligence agency AUSTRAC and uses Fireblocks. One of the world’s largest digital custodians, to protect investors’ cash.
Momtazi was upbeat when asked about the possibility of Australian legislators regulating DeFi goods. Adding that regulation is a good thing for the crypto business. And that Block Earner is prepared to integrate into whatever regulatory framework Australian legislators find appropriate.
“Legislation considerably more effectively legitimises this region… and thus far, things have been pretty positive in terms of regulation; enforcing standards around asset custody and maintaining basic minimum levels of audits — to put that all together is only a good thing.”