Questions from beginners
Six questions people often ask when they start looking at earning on crypto. Each answer is a few lines, with the page that shows today’s numbers.
- What is the rate you actually get, and how is it different from the published rate?
- How do I read tiers A–D and “4/5”?
- Why does the yield on BTC or ETH not make up for a price fall?
- How is an exchange (CEX) different from DeFi?
- How do new-user promotions work?
- Why is no tier ever completely safe?
What is the rate you actually get, and how is it different from the published rate?
The published rate is the highest rate a venue advertises, usually only for the first part of a deposit, sometimes only for new users. The rate you actually get (on this site, the rate for your amount) is the average over your whole amount after the rate tiers and caps; the part above a cap counts as 0%. For the same product, the more you deposit, the further that average can fall from the advertised figure.
See the data:Glossary, with today’s example →The full table for your amount →
How do I read tiers A–D and “4/5”?
Tiers come from published rules applied to sourced facts; nobody types them in. A meets every criterion; B fails none but does not meet them all, or has a new incident under review; C fails at least one; D has an incident under way that can affect deposits. The number beside it, for example 4/5, is the criteria met out of the total: two venues in tier B can still differ on it. A product’s tier is the worse of its coin and its venue.
See the data:How tiers work: criteria and thresholds →Venues by tier →
Why does the yield on BTC or ETH not make up for a price fall?
Interest is paid in the coin you deposit, and a whole year of interest on BTC or ETH is usually far smaller than how much their price can move in a single month. When the price falls, you still have slightly more coins, but their value in USD can drop by more than that interest. Interest adds to the number of coins; it does not shield you from the price.
See the data:BTC rates today →BTC price swings, today’s figure →
How is an exchange (CEX) different from DeFi?
On an exchange, the exchange holds the wallet keys for you: how safe the money is depends on the exchange, and if it goes bankrupt or is hacked, you stand in line with the other creditors. With DeFi, you keep your own wallet and deposit coins into a smart contract: nobody holds them for you, but a bug in the contract or an attack can lose funds, and there is no customer support. The two are rated with separate sets of criteria.
See the data:Three kinds of venues →The DeFi products table →The criteria for each kind →
How do new-user promotions work?
Offers only for new users, first deposits or VIP levels often carry very high rates, but only on a small amount and for a short time; when they end, the deposit goes back to the usual rate. YieldCompanion never suggests these offers (except a level anyone can buy by subscription, once its price is known: counted after the fee) and lists them after the products open to everyone; the rate for your amount counts the part above the cap as 0%. An offer that publishes no cap gets no rate for an amount.
See the data:How rates are computed →Why very high rates rarely last →
Why is no tier ever completely safe?
A tier only measures what public facts can show: licences, proof of reserves, audits, past incidents. What is not public, such as an exchange’s real books or a flaw nobody has found yet, no rule can measure. A venue that meets every criterion today can still have an incident tomorrow: tier A is the result of a check, not a guarantee.
See the data:Three layers of risk that lose money →What the criteria check →