RIO DE JANEIRO, BRAZIL – British startup Monolith announced on Tuesday, March 8, the launch in Brazil of Token.com, a platform that uses decentralized finance (DeFi) to offer customers returns of up to 12% per year.
The company created a solution through a digital wallet that uses the stablecoin TerraUSD (UST), which is paired one-to-one with the US dollar. The interested user deposits amounts in Brazilian Real (BRL) in the wallet, which are converted on the spot and start earning money.
Token.com says that the estimated return is about 12% per year, in addition to the exchange rate variation. These returns are tied to loans with crypto assets as collateral made on the DeFi Anchor protocol on the Terra blockchain.
“The user will invest in a digital asset with access to earnings from Anchor itself, a low-risk lending platform with no history of losses,” the startup explains.
The Anchor protocol works through so-called smart contracts, which are computer programs that operate automatically according to pre-established rules, without intermediaries. It offers an income for those who make UST deposits on its platform, making these assets available for loans.
Because borrowers must leave collateral above the requested credit, Token.com says that in case of default on the loans to which the investment on its platform is tied, the collateral is automatically triggered through smart contracts to cover possible financial damages.
The company further explains that its profit comes from the returns generated in addition to the 12% interest made available to customers. Those who access the Anchor protocol directly can achieve an annual return of close to 20% but have to deal with the technical side of using smart contracts. Token.com, therefore, takes a percentage of the revenues and passes the rest on to its customers.
For William Ou, CEO of Token.com and CCO of the Monolith Group, DeFi’s potential today is accessible only to a small group of people with the knowledge and time to operate directly in the market.
“We chose Brazil as the first country to host Token.com because of the impact the product can have. The Real was one of the currencies that lost value the most in recent years (more than 35% since 2020), and most of the population does not have access to investments that can protect their economies from this devaluation and still make them grow,” he says.
In light of this, the company intends to facilitate people’s access to DeFi, reducing bureaucracies such as quotation processes, transfers, creation of multiple accounts, management of cryptographic keys, and withdrawal fees.
To use Token.com, there is no minimum deposit amount, and redemption can be requested at any time, directly to the user’s bank account. The company also states that it will be possible to use the wallet balance to purchase other tokens through the application in the future.
Monolith operates in 31 countries and is the creator of the world’s first decentralized Visa debit card. It is registered with the FCA, the UK’s financial market regulator, and is audited by Moore Global, one of the world’s most reputable firms.