This article is intended for Australian members. If you're looking for instructions for CoinJar UK, visit this article.
CoinJar Earn is a new feature built into CoinJar that allows you to interact with popular DeFi protocols. You make the decision about where your coins go and what they do.
When you need your crypto again, tap withdraw and it’ll appear in your CoinJar, along with any rewards you’ve earned.
How does CoinJar Earn work?
CoinJar Earn is a ‘pass-through’ service, which means we help you access certain DeFi protocols. Right now, CoinJar Earn allows you to supply to and withdraw your coins from Compound.
Compound is a DeFi protocol on the Ethereum network that creates decentralised cryptocurrency pools that users can both supply to and borrow from.
Interest rates are determined algorithmically, based on supply and demand for the particular cryptocurrency. These interest rates (also known as the APY, or average percentage yield) are recalculated every Ethereum block.
When you supply assets to a Compound pool, you receive an equivalent amount of cTokens (i.e. cETH, cUSDT). As interest accrues over time, you are able to redeem your cTokens for a larger amount of the original asset.
Note that these cTokens won’t appear while using CoinJar Earn – we hold them on your behalf and represent this increase in value as “rewards” you receive when you withdraw your funds.
Is CoinJar Earn available to all users?
Currently, CoinJar Earn is only available to verified CoinJar users residing in Australia. Users residing in the United Kingdom or unverified users will not be able to access CoinJar Earn.
Does CoinJar Earn have any fees?
CoinJar does not charge any network or transaction fees for depositing or withdrawing funds into CoinJar Earn. Other fees may apply depending on the program selected. These will be displayed to you before you add funds into a program.
For Compound programs, we will retain any COMP tokens (the governance token of the Compound protocol) generated by the supply of your tokens, but will not charge any additional fees.
Where do the rewards come from?
CoinJar Earn facilitates the transfer of your tokens into selected DeFi protocols - for example, Compound - and passes on any rewards received into your CoinJar account.
Are there any risks?
Interacting with third party protocols can be risky and can lead to a total loss of any assets supplied into a program. Before using CoinJar Earn, we encourage you to do your own research and never invest more than you can afford to lose. Please also read and familiarise yourself with the "Additional Risks Specific to CoinJar Earn" section in our Terms of Service before choosing to proceed with adding funds into a Program.
Key risks include:
- Software risk: Protocols, including DeFi applications and staking validator nodes, rely on underlying software code which run on the blockchain. This software code may have bugs, errors or vulnerabilities which may cause the software to malfunction or be exposed to hacks, which may result in a total loss of funds from the protocol. There is no method to guarantee that a protocol is free from software risk, even with security audits completed by independent professionals.
- Regulatory risk: The current and future regulatory treatment of CoinJar Earn is uncertain. It is possible that CoinJar Earn or any one of its Programs will be forced to cease operating in the future without advance notice to you because of changes in legislation, regulatory intervention or court order. It is impossible to predict how these events may affect any funds held by a user within a Program.
- Counter-party risk: This is the risk that any funds added to a Program may not be repaid by a protocol (e.g. due to a failure of a third party to repay borrowed assets to the protocol) or that rewards may not be paid by a protocol as expected.