Block Earner has raised $6.4 million in seed funding and is ready to offer stable returns from Aave and Compound to Australian investors, taking the “hard lifting” out of Defi.
Block Earner, an Australian fintech company, has gone online, giving regular customers a 7% fixed rate investment product using decentralized financing (DeFi) technology.
Block-Earner has already drawn the attention of industry heavyweights, having completed a $6.4 million initial fundraising round in December of last year. Framework Ventures led the round, which included Coinbase Ventures, DeFi Alliance, LongHash Ventures, and Kain Warwick, the founder of Synthetix, an Australian crypto derivatives market.
Jordan Momtazi, the co-founder of BlockEarner, said that Australia’s current economic climate makes products that offer yields on savings appealing, especially when it’s practically impossible to achieve similar returns using traditional financial institution methods.
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 cost of products and services rises.
Momtazi compared the gap in return benchmarks between traditional finance and Defi, saying:
“When you compare the best rates Australians can get from a regular savings account to a 7 percent product like Block Earner, it’s obvious to see where people are going to end up.”
Momtazi went on to clarify that the whole goal of Block Earner is to ensure that ordinary Australians have access to modern technologies without having to do any “hard lifting” in order to grow their money over time.
BlockEarner works by converting Australian cash into USD Coin, a stablecoin backed by the United States dollar (USDC). Block Earner invests that USDC in two key Defi protocols, Aave and Compound, to deliver a return to investors.
It’s also worth noting that Block Earner is the first fintech startup to provide Aave and Compound with mainstream integration.
While Momtazi promises a set 7% return until July of this year, he also mentions that Block Earner’s variable interest rate offering could reward investors with up to 18% annual profits.
The emerging and highly unregulated world of Defi is not without its dangers, as companies like Block Earner are still vulnerable to issues like faulty smart contracts, a lack of demand for lending goods, and the liquidity pools (Aave and Compound) being attacked.
Block Earner is a “conservative” company, according to Momtazi, who emphasizes that the company “chose stablecoins like USDC due of their security and validity.”
We feel that conservatism is an important aspect of the long-term plan. We feel that trust and safety are essential components of a long-term plan, and we’re not willing to sacrifice double digital returns in less regulated sectors.”
Momtazi went on to say that the continuous success of Block Earner will gradually confirm the authenticity of Defi over time, assuaging the anxieties of crypto skeptics.
“New things are always viewed as terrifying, which is reasonable — we will continue to demonstrate the legitimacy of Defi technology through continuing performance,” says the company.
Block Earner does not need to seek an ASIC license because it is registered with the Australian financial intelligence agency AUSTRAC and secures investors’ cash with Fireblocks, one of the world’s largest digital custodians.
Momtazi was upbeat when asked about prospective Australian government regulation of Defi products, adding that regulation is a good thing for the crypto business and that Block Earner is ready to integrate into whatever regulatory measures Australian legislators consider acceptable.
“Legislation legitimizes this place far more effectively… and things have been pretty positive so far 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.”
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