We're pleased to offer the Active Rewards feature to eligible Blockchain.com users.
Note: Active Rewards is an advanced product feature that may not be suitable for retail users who are unfamiliar with the volatile nature of crypto asset prices. Do your research to understand the risks associated with categories of crypto assets, in addition to understanding the risks associated with the Active Rewards feature, as described below.
How ‘Active Rewards’ Works
Active Rewards provides a way for you to earn on your crypto asset balance in an otherwise “down” or “flat” market. Specifically, it lets you opt-in to a strategy to earn rewards if you believe the price of crypto assets will remain “flat” (not increasing significantly) within the next week.
Every week, a new Active Rewards strategy is made available to all Active Rewards customers that sets a “trigger price” for crypto assets that is above the current market price. If you believe the price will remain under the trigger price at the end of the week, you can subscribe to the strategy and earn an annual rewards rate on your crypto, paid out weekly on Fridays at 8am UTC.
Risks of ‘Active Rewards’
While Active Rewards can offer attractive weekly rewards on your crypto asset balance, the feature remains fundamentally tied to the volatile nature of crypto asset market prices. As such, it is critical that you understand its risks before participating:
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Volatility: If a crypto asset’s weekly market price movements exceeds the Active Rewards weekly “trigger price,” it could reduce the crypto asset balance in your account.
- Opt-Out: If you have opted-in to Active Rewards, you will remain in a participating mode unless you opt-out of Active Rewards again. If you wish to opt-out, and do not do so before the following week’s “trigger price” and rewards rate are set, you will automatically be rolled into the Active Rewards strategy for the following week.
Examples of the ‘Active Rewards’ Feature
The following examples are based on the following sample information.
(Note: this information is not reflective of current market prices, and is provided for educational purposes only):
- Currency: BTC
- Duration: 1 Week
- Annual rate: 8%
- Current price: $20,383
- Trigger price: $22,000
Scenario 1 - Active Rewards: At or Below “Trigger Price”
If the price of BTC ends the week at or lower than the “trigger price,” you’ll receive your rewards for the week and your BTC will be returned to you valued at the market price.
In this scenario, if you start the week by depositing 1 BTC in Active Rewards, you’d end the week with 1.00147705, which would then be re-subscribed to earn rewards for the following week unless you opt-out.
Scenario 2 - Active Rewards: Above the “Trigger Price”
If the price of BTC ends the week higher than the “trigger price”, you’ll still receive your rewards for the week but your BTC will be returned to you valued at the trigger price, resulting in a reduction in your BTC-denominated Account balance.
In this scenario, you’d start the week with 1 BTC. At the end of the week you’d receive your 0.00147705 BTC reward, but because the price of BTC went over the trigger price your BTC balance would go down from 1 to 0.88147705 BTC. Thus, you’d have a balance of 0.88147705 BTC which would be re-subscribed to earn rewards for the following week.
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