What is your favorite beverage? I mean apart from alcoholic drinks. As a German I would say, I'm very British in this respect: I love tea, especially Darjeeling, English Breakfast Tea or just a Chai. It is healthy and it is delicoius. Today I stumbled over chai.money and I thought: That is exactly my cup of tea.
Chai.money offers a simple method to earn interest on DAI stablecoin. You just connect your METAMASK wallet with chai.money. Then you convert your DAI into CHAI and let it brew. The developers of chai.money promise their service would be risk free and produce an interest rate of 2 % per year. Here is what chai.money the inventors Martin Lundfall, Lucas Vogelsang, Lev Livnev write about it:
With the launch of multi-collateral Dai, Dai holders can earn risk-free interest on their coins using the Dai Savings Contract, also known as the
Pot. The interest is funded out of the stability fees paid by CDP users, and is 2% per year at the time of writing. Even though Dai deposited in the savings contract remains instantly redeemable, interest accruing Dai cannot be directly transferred, or used in other dapps. Chai solves this by essentially "unlocking" your Dai savings balance, making it transferable, fungible, and ready for further DeFi integrations.When you convert your Dai to Chai, you receive a corresponding balance in the Chai contract. While your Chai balance remains constant, its corresponding Dai value grows with the Dai Savings Rate. You can think of it as Dai brewing in the Chai contract. At any point in time you can redeem your Dai along with additional interest, or continue to use the Chai token directly.
Why Chai.money Is Worth To Think About?
First of all, I have to admit: I haven't converted any DAI into CHAI, yet. At the moment I'm trying to figure out how I can get hold of some DAI first. Obviously, there are several ways to get DAI. For me the easiest one is to transfer money from my bank account to my COINBASE wallet. You can buy DAI directly on Coinbase. Then, transfer any amount of DAI to your Metamask wallet and connect it to chai.money. You should have at least 1.01801 DAI, that is the price for 1 CHAI.
Now, a 2 % interest rate per year is not very much compared to other lending opportunities. However, why is it worth to think about? It is simple. And in the future, it probably can be cheaper to use chai.money because it is working on a solution to support gasless transfers. However, chai.money is not there, yet. You still have to pay a gas fee when you want to convert DAI to CHAI. Anyway, it is only one transaction. In comparison to that, on Compound, for example, you pay a gas fee for enabling and for supplying a token. Suppose you can spare some DAI and save them to collect some interest via chai.money. There are several ways how to use the these additionally earned DAI:
1. You can supply it to Compound to earn more interest on it. By that you can collect the Compound token, transfer it into DAI or any other lending token and add it to your supply.
2. You can simply hodl it
3. You can convert it to Bitcoin or any other coin and profit from its increase in value. This can be very risky, because the coin market is very volatile
4. You can save, borrow and trade DAI on Oasis (I haven't done that, yet)
5. You can do all those things together
This is what I want to try out in the next months. I will write down my experiences trying to earn some passive income brewing some DAI/CHAI here. In the meantime I enjoy my cups of tea.
Disclaimer: I'm not a professional finance expert. Therefore this article represents my views on the topic and is not to be seen as product or finance advice.
