Yield App

How to live off the interest from your stablecoins

8 min read

Stablecoin investment strategies are particularly well suited for long-term investment, as this allows the annual percentage yields (APYs) to compound over time and leads to wealth accumulation. Yet this strategy isn’t just for the long game; you can also generate a regular passive income that may cover your monthly bills. In this blog, we’ll guide you on how to live off the interest from your stablecoins. 

Since the 2021 crypto boom, yields on stablecoin strategies have dipped but remain attractive for consistent income generation. But remember, you’ll require a significant lump sum to get started, unlike the dollar cost averaging approach we covered in a previous blog. Let’s delve into the details. 

Determine your income goals

Start by identifying your passive income goals. Are you looking to supplement your current income, afford additional luxuries, or reduce your working hours for more leisure time? Or perhaps you have a larger lump sum that could potentially enable you to retire early? 

In this blog, we’ll explore how you can generate three levels of monthly income with Yield App: $500, $1,000 and $2,000.

READ: How to become a stablecoin millionaire

The most efficient way to achieve these goals with Yield App is to become a Diamond Tier member. This tier requires you to stake or lock at least 20,000 YLD tokens, equivalent to $1,800 at the current price of $0.09 per YLD (as of 31 July 2023). 

As a Diamond Tier member, you’ll have access to the highest rates on Yield App’s Earn products, bringing you closer to your monthly income goal.

If your objective is to earn a consistent monthly income, your best options are the stablecoin Earn+ products, offering 9% APY. Stablecoins are digital currencies pegged to fiat currencies, like the US dollar. Yield App currently supports four stablecoins: USDT, USDC, DAI and TUSD. 

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However, note that Earn+ products involve a 30-day redemption period. This means you will need to schedule your monthly redemption requests to ensure timely income payouts. Set a monthly reminder to request a redemption, and your wallet will receive the requested assets 30 days later.

IMPORTANT NOTICE: YLD is not pegged to a fiat currency and so its price can and does fluctuate significantly. The price can go down as well as up and investors may lose some or all of their capital.

Earning $500 a month: every little helps

Let’s start with the lowest of the three amounts. How can you generate $500 in monthly income from a Yield App stablecoin product?

An initial investment of 20,000 YLD (currently valued at around $1,800) allows you to reach Diamond Tier. Next, select a USDC, USDT, DAI or TUSD Earn+ product and earn 9% APY on your stablecoins. 

On top of this, you’ll also earn 6% on staked YLD or 12% on locked YLD. However, we won’t include this in the calculation as the price of YLD is variable.

Use our handy rewards calculator to work out your earnings as a Diamond Tier customer. To generate a steady $500 monthly passive income, you would have to make an initial investment of $67,000 (denominated in your stablecoin of choice) into an Earn+ product. You would then earn $502.50 every month.

The total initial investment needed to generate an income of $500 per month would be $68,800 (as of 31 July 2023).

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Yield App's rewards calculator

Don’t forget to schedule your redemptions 30 days ahead to enjoy your monthly earnings. Once you’re ready, off-ramp your income using our easy-to-use fiat rails for EUR and GBP.

LEARN MORE about Yield App’s on- and off-ramps for EUR and GBP

Earning $1,000 a month: supplemental income

If you have a higher initial sum to invest, you could aim to boost your income further. Let’s look at what it would take to generate $1,000 a month.

In addition to the initial investment of 20,000 YLD (currently valued at around $1,800), you would need to deploy $134,000 into one of our Earn+ stablecoin products to earn $1,005 in stablecoins each month.

The total initial investment needed to generate an income of $1,000 per month would be $135,800 (as of 31 July 2023).

Earning $2,000 a month: living off your stablecoins

Both examples above provide regular passive income to supplement your existing income. But what if you’re looking to fully live off the income from your stablecoins?

READ: Cryptocurrency and DeFi use cases: Stablecoins for seniors

In this last example, we’ll take a look at how to earn $2,000 a month from a stablecoin strategy – a monthly amount one person could live off if they are being frugal. 

In addition to 20,000 YLD (currently valued at around $1,800), an investment of $267,000 in a stablecoin Earn+ product would allow you to draw an income of $2,000 every month.

The total initial investment needed to generate an income of $2,000 per month would be $268,800 (as of 31 July 2023).

Long-term savings strategy 

Now you know how to supplement your income or perhaps even live off the interest from your stablecoins. However, this strategy is only suitable for investors with a substantial initial lump sum. If you don’t have the necessary assets upfront, consider using a long-term investment strategy.

READ: What is dollar cost averaging and why does it matter for investors?

Here, Yield App’s Earn+ 365 products can come in useful. Exclusively available to Diamond Tier customers, Earn+ 365 products offer an 11% APY on your stablecoins. 

Following your initial $1,800 investment to become a Diamond Tier member, depositing $1,000 every month for 4 years and 5 months would accumulate $70,122 – enough to generate a monthly income of $500 thereafter.

By depositing $1,500 into an Earn+ stablecoin product each month, you would reach $136,547 in 5 ½ years, yielding $1,000 a month going forward.

And finally, investing $2,500 monthly into Earn+ 365 for 6 years and 2 months would amass a total of $270,628 – enough to generate a comfortable $2,000 a month!

Long-term savings plan 

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IMPORTANT INFORMATION: All figures are for illustrative purposes only. The price of digital assets can go down as well as up and an investor may lose some or all of their capital.

Potential risks and considerations

However, it is important to remember that any investment in digital currencies is not without its risks. Crypto investment accounts differ from traditional investment accounts as they operate in a largely unregulated sector. Unlike a traditional bank account, there is no guarantee that your money will be safe, though Yield App takes security extremely seriously. 

Always invest what you can afford to lose and avoid putting all your eggs in one basket. In addition, research your local cryptocurrency tax laws, as these could affect your net income.

However, for those with the funds to invest, it is possible to earn an attractive monthly passive income from stablecoins, perhaps even enough to live off. And for many, that is the ultimate financial dream.

‍Want to earn passive income on your crypto? Sign up for a Yield App account today!

DISCLAIMER: The content of this article does not constitute financial advice and is for informational purposes only. The price of digital assets can go down as well as up, and you may lose all of your capital. Investors should consult a professional advisor before making any investment decisions.


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