Simply put, because they don't want to - they are making too much from your deposits. In effect these are interest-free loans which are invested in whichever assets they choose to back their stablecoins with at the behest of holders. We feel it is only right that our holders share in this yield generation, carefully invested in only the most reputed sources and with full transparency.
What is a stablecoin?
A stablecoin is a type of digital asset that makes use of economic incentives to target a certain price point. As COFI stablecoins are backed 1:1 with their respective underlying assets and are fully redeemable, this ensures that they maintain pegged.
How do we keep the yield generation low-risk?
We follow a rigorous vetting process when selecting the yield partners we integrate with. As of today, these are on-chain money markets Aave and Compound, and yield aggregators Yearn Finance and Beefy. These protocols house TVLs in excess of $100m and follow strict "up-only" practices such as engaging only in secured lending and utilising assets with ample liquidity.
What future yield sources will be added?
Whilst being selective, our team reviews yield sources on an ongoing basis. In the future these may include yield derived from tokenized RWAs (Real World Assets) such as treasury bills and LSDs (Liquid Staking Derivatives) such as from ETH 2.0 staking. Note that assets are deployed only at the direction of the user, for the yield sources available on our platform.
What chains does COFI operate on?
COFI is launched on Optimism, a layer 2 roll-up network that inherits the security of Ethereum. However, we maintain a chain-agnostic stance, and will therefore expand to other networks in the future in accordance with changing opportunities and requirements.
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