Active Rewards provides a way for you to earn on your crypto in an otherwise down or flat market. Specifically, it lets you subscribe to a strategy to earn rewards if you believe the price of crypto assets won’t go up significantly in 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 higher than the current market price. If you believe the price will be 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.
The trigger price and the rewards rate are set at the start of each weekly cycle and if you don’t withdraw your funds you’ll automatically be rolled into the strategy for the following week.
Since the specific trigger price changes each week, let’s take a look at some scenarios using the following values:
- Currency: BTC
- Duration: 1 Week
- Annual rate: 8%
- Current price: $20,383
- Trigger price: $22,000
Scenario 1 - Price of BTC is at or lower than the trigger price at the end of the week
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.
So in the scenario depicted below, 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.
Scenario 2 - Price of BTC is higher than the trigger price at the end of the week
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 balance.
So in the scenario depicted below, 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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