Earn contracts can be opened using USD Coin ($USDC), Tether ($USDT), Dai ($DAI), Frax ($FRAX), or ALTA cryptocurrencies, and the principal is returned in the same asset lent.
Today, if you were to take your money and head to a bank to put it in a CD and lock it up for five years, you’d probably expect to get about a two percent annual percentage yield. Yet Utah-based Alta Finance wants to provide a 10.33 percent annual percentage rate by promising exposure to real estate revenue through loaning crypto assets.
Compounding interest is taken into account in percentage yield, but it is not in percentage rate, which is the difference between annual percentage yield and annual percentage rate. Alta promises a rate of 7.75 percent for a 36-month term + ALTA token awards or, as of this writing, a rate of 7.95 percent for a 60-month term. As of this writing, the price of an ALTA token is $0.185; if 10,000 ALTA are staked in an earn contract, that 7.75 or 7.95 percent rises to 8.91 or 9.14 percent. 100,000 ALTA bets result in a 1.3x multiplier, which raises the rate above 10%.
Alta Finance will operate on the Ethereum and Polygon networks, with more networks arriving in the upcoming months. This is a lofty goal, but Alta Finance intends to do it. The principal of earn contracts is returned in the same asset that was lent, and they can be opened using the cryptocurrencies USD Coin ($USDC), Tether ($USDT), Dai ($DAI), Frax ($FRAX), or ALTA.
Some cryptocurrencies are known for their high returns, which is a hot topic among those who support them. As of this writing, major cryptocurrency exchange Binance offers Axie Infinity ($AXS) up to a 104.62 yearly interest rate, with a number of other well-known coins like Solana ($SOL) and Polygon ($MATIC) accessible at rates between 10 and 21 percent.
The back end of Alta’s business plan differs from Binance’s or other staking models. The business takes on debt, makes investments in “high-performing real estate assets,” and pays interest on a part of that debt to the lender. On the other side, when you stake cryptocurrency, you encrypt it in order to take part in blockchain operations. Newly created coins are used to fund stake payouts.
According to Jeremy Crane, CEO and founder of Alta, “staking and loan are very, very widespread in Defi, but the money sources from those come from a different area.”
Many people might be dubious about bitcoin businesses that promise rates that are substantially greater than those offered by conventional banking institutions. People have the right to naturally guard their money. Scams and bad investments are commonplace, just like everything involving money.
Crane contrasts funding Alta with funding a private lender.
They would receive a significantly larger interest if they lent money to a private lender as opposed to their bank, says Crane.
Alta would initially invest in “new real estate products,” concentrating on multifamily apartments, according to Crane.
The product Earn is excellent. People will be able to receive a fairly stable yield thanks to it. That’s a huge deal in the crypto world,” adds Crane.
Neither Alta nor Alta Earn are precisely the same as a CD. Alta is not a bank. In actuality, clients in the United States cannot currently access Alta Earn. Although Crane thinks it will be by the end of this year or the beginning of next year, the regulatory atmosphere “isn’t there yet.”
When it debuts, Crane anticipates that the majority of its clientele will come from Latin America, South America, and Asia, with ambitions to expand its availability globally.
According to him, the Earn product is the first stage in a multi-phased, 20-year plan to get there. “This is a significant change in technology. It will transform how everything happens on the internet over the next 10 to 20 years, but the typical user probably won’t realize it until two to three years from now since it is so important to ownership, which is why web3 has taken off. As the major web2 players make this move, they will then start to notice it.
“From our perspective, we [are] focusing on real estate since everyone needs a place to live and work. It is both a fundamental and universal aspect of the human experience. We’re going to take on that problem because it needs to be crypto-native and crypto-enabled.
Trust is crucial in bitcoin ventures, just like it is in any industry where money is involved. It takes time to gain that trust.
According to Crane, it requires hard labor and financial restraint.
To foster trust, the company publishes a balance sheet showing all of its money in the Alta Finance Treasury, along with a monthly net asset report, and makes the names, photos, and social media accounts of the Alta team public on the Internet.
“That’s really typical for funds. Crane said of the publication of a monthly report, “We’re not a fund, but we’re going to do it. “We believe that it’s critical for people to have some openness on the workings that are somewhat hidden behind the scenes.”
