What is Okto “Earn”?
Okto’s Earn is a type of financial product offering that allows users to earn passive income on their crypto holdings.
In traditional finance, banks pay interest on deposits, but in DeFi, users can earn interest by depositing their crypto in a pool of assets (liquidity pools). These activities are facilitated by smart contracts, which automate the investment process, pay out interest, thus eliminating the need for intermediaries such as banks.
With DeFi Earn, users can earn interest on a wide range of cryptocurrencies, including Bitcoin, Ethereum, and stablecoins such as USDT and USDC. Overall, DeFi Earn provides a decentralized, transparent, and often lucrative way to earn passive income on crypto holdings while also contributing to the growth of the DeFi ecosystem.
With Okto Earn, you can either stake your single token and earn interest (also known as APY) or you can invest in Liquidity Pools.
What is Staking?
Staking is the process of locking your crypto for a certain period. In return, you earn interest by staking your tokens. For example, if you hold ETH in your wallet, instead of letting it stay idle, you can put your holdings to work by staking it on Okto and earning additional income on it in the form of APY or annual percentage yield.
What are Liquidity Pools?
A pool of crypto assets that hold funds and provide liquidity to a DeFi platform so that people can trade easily without any intermediary. This pool is created when liquidity providers (LPs) add an equivalent value of two tokens to the pool. It is mandatory to add an equal value of 2 tokens in a liquidity pool. In return, you earn interest for providing your tokens to a pool.
What is Annual Percentage Yield (APY)?
The return that you earn on your crypto investment. With APY, you earn interest on your principal amount as well as the interest, offering compounding returns.
What are Receipt Tokens?
They are like acknowledgement tokens that you receive in return for depositing or staking your token within the “Earn” feature. For example, for every 1 MATIC staked, you would receive 1.3 MATICX. Furthermore, if there are liquidity pools for these receipt tokens, you can invest them in those pools and earn additional interest on the same.
How to invest in a Liquidity Pool?
- Sign in on Okto and click on the Earn tab at the bottom of the screen.
- Browse through the listed assets and select a token of your choice.
- Let’s say you selected ETH, you will then see a list of all the available trading pairs of Ethereum pools.
- Click on the trading pair (for example, ETH-BNB), explore the details of the pool such as the returns (APY), and click on “Invest Now”.
- Enter the quantity of each token. Please note that it is mandatory to add equal value of each token.
- Click on “Proceed to Deposit” if you do not have sufficient balance for each token in your wallet.
- You can either buy with Fiat (using a bank transfer) or deposit it from an external wallet or your CoinDCX wallet.
- Once you have deposited tokens, review your order and confirm. You will receive LP tokens in return as a proof of investment.
Hooray! Now your crypto will make passive returns for you!
How to stake your token?
- Go to Earn and select a token (for example MATIC)
- Click on the token, and review the details such as APY, min amount, lock-in period, etc.
- Click on Invest now, and enter the amount of MATIC you wish to invest. If you have an insufficient balance, you are required to buy or deposit MATIC.
- Once you have added MATIC, review your order and Confirm.
- In return, you will receive a “Receipt Token” which is MATICX in the case of MATIC. Receipt token is an acknowledgement token or a proof of your investment.
Here is a step-by-step video guide to invest using “EARN” on Okto.
How to exit staking and claim your principal and rewards?
- Go to “Your investment” under the “Portfolio” tab.
- Select the token and click on Exit (For example, MATICX)
- If the token is tradable (which means you can sell your receipt token), you can either:
- Request Exit or
- Sell MATICX
- If you “Request Exit”, enter the amount, review the details and confirm your order.
- If you select “Sell MATICX”, you can choose the token you wish to receive in return and confirm your order.
- If the token is non-tradable, simply place an exit order, review the details, and confirm your order.
Please note: if the payout duration exists, you will only be able to claim your rewards after the payout period, or else you will receive your rewards instantly after the exit order.
How much returns can you make?
You can earn passive returns ranging from 0.5% -50% or even higher*.
Top USDT Liquidity Pools
What are the risks involved?
Earn offers a range of passive earning opportunities that vary in returns, from 0.5% to more than 50% per annum. However, it's important to note that higher returns are usually associated with higher risk factors that can lead to a depreciation in the invested amount.
Some of the primary risks associated with higher returns are:
- Price depreciation of the underlying asset
- Impermanent Loss
- Liquidation
- Fraudulent protocols or rug pulls
- Unstable chain/network
Before investing in high-yield Earn pools, it is important to research and understand each of these risk factors to make an informed decision. By understanding the potential risks, you can invest in Earn pools with higher returns that match your risk tolerance and investment goals.
Let us make it easy for you to start your journey by sharing a quick video:
Frequently Asked Questions
How do I opt for Earn?
Click on the Earn tab and choose to deposit your preferred crypto asset from the listed crypto assets under the Earn feature. Next, choose the lock-in duration, review the details, and confirm.
How many tokens are available under Earn?
Over 1000 tokens are available under Earn. We will continuously keep adding more tokens.
When can I withdraw my assets?
Assets can be withdrawn depending on the lock-in duration.
What is a lock-in duration?
The minimum period for which you are required to lock in your crypto in order to earn interest. You cannot do anything with your crypto during that period.
What is a payout duration?
After you exit your Earn investment, sometimes it may take a few days to process your returns after which you can claim your rewards.
What are tradable & non-tradable tokens?
With Tradable Receipt Tokens, you can exchange your receipt tokens for another token while with non-tradable tokens, you cannot exchange your tokens.
How do I monitor my investments?
Go to the “Portfolio” tab then click “Your investment”. You will be able to view all your investments.
What is Impermanent Loss?
The loss that occurs when the price of the asset you provided to the liquidity pool changes compared to the price when you initially deposited it. The larger the price change, the greater the impermanent loss you will experience.
Are there any tax implications on rewards received from Liquidity Pools?
- Taxation depends on your geography and jurisdiction.
- Please file tax as per the laws yourself.
What fees are involved in adding/removing liquidity to/from Liquidity Pools?
You will be charged a gas fee in adding/removing liquidity to/from Liquidity Pools.
*With high returns, comes high risk. Users should do their own research before investing in crypto.
