Grow your investment with USDC Earn

You can now earn up to 3.5% per year on your USDC by investing with USDC Earn on Luno. It allows you to generate income through a trusted, secure, and regulated investment vehicle, without hidden fees or the unforeseen risks often associated with unrealistic high-yield investment products.

Let’s look at the benefits of USDC Earn, how it works, and where it fits in your broader investment portfolio.

What is USDC Earn? 

When you invest money at a bank or an investment fund, the bank or fund manager invests that money in other investments to make more money, often in other interest-bearing investments such as US bonds. 

USDC Earn works in the same way. Luno invests customer funds, in USDC Earn wallets, in regulated and low-risk instruments to generate returns. Unlike many fixed-term investment products, you can add or withdraw USDC funds at any time, without penalties or hidden terms. 

Earn passive income

There are a few ways people can invest to generate returns. One is to invest in stocks or cryptocurrencies they believe will increase in value over time. Another is to invest in government bonds and other interest-bearing investments, which are essentially loans to a government that pay you interest over time. It’s considered one of the safest ways to earn income on investments.

This example is purely hypothetical and not a guaranteed outcome, but how could an interest-bearing investment of $1,000 grow over ten years? For argument’s sake, let’s assume a constant 3.5% interest rate, which won’t always be the case since the interest amount and Dollar price will fluctuate.

After the first year, your money would be worth $1,035, meaning you earned $35 in interest. By year five, your investment would have grown to about $1,187.69, with a total of $187.69 in interest. If you leave it for ten years, the amount rises to $1,410.60, giving you $410.60 in interest overall. This shows how your money increases the longer you keep it invested, thanks to the power of compounding interest.

Starting amount: $1,000
Growth timeline:

Year 1: $1,035 (earned $35)
Year 5: $1,187.69 (earned $187.69 total)
Year 10: $1,410.60 (earned $410.60 total)

Think of your interest-earning investment as a workforce that never sleeps. The more you contribute, the larger the team becomes, and the more work gets done. By steadily growing this workforce, the results compound, and your output increases exponentially.

Here’s what the numbers could look like with an initial $1,000 investment plus monthly $100 contributions:

Year 1: $2,255.01 (earned $55.01 total)
Year 5: $7,737.55 (earned $737.55 total)
Year 10: $15,761.60 (earned $2,761.60 total)

By adding $100 monthly, you’re not just hiring new workers each month, you’re hiring workers who immediately start training the next month’s recruits. Each contribution starts earning interest right away, and that interest earns interest on top of interest. The regular contributions turn your investment from a small team into a massive operation that generates exponentially more results.

What are the risks? 

Price fluctuation: As a USDC stablecoin holder, you will still be subject to any price changes of the US Dollar.

Access to funds: While the average lead time to transfer funds out of the Earn wallet is usually within minutes, it could take up to 2 business days to gain access to funds depending on market conditions.

Interest rate fluctuations: While you can earn up to 3.5% interest a year, this rate is not guaranteed and can be lower.

* Investing in Crypto assets may result in the loss of capital. Luno (Pty) Ltd is an authorised financial services provider (FSP No. 53314), and registered credit provider (NCRCP22123). This information should not be construed as a solicitation to trade. All opinions, news, research, analysis, prices or other information is provided as general market commentary for information purposes only and is not investment advice or recommendation. Luno always advises you to obtain your own independent financial advice before investing or trading in cryptocurrency.