The Earn service on cryptocurrency platforms like others is a means that allows you to earn passive income from the currencies you own through staking, lending, or liquidity providing. However, it is not without risks.
Here are the pros and cons clearly:
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✅ Pros:
1. 💰 Passive income without trading:
You earn profits from the currencies you own without the need for speculation or selling.
2. 🔒 Various options:
You can choose between fixed Earn or flexible Earn based on your liquidity preference.
3. 📈 Increase in returns:
Some currencies offer attractive returns ranging from 5% - 20% annually (or more sometimes).
4. 🧩 Benefit from unused currencies:
Instead of leaving your currencies idle, you can activate them via Earn to increase your balance.
5. 🌱 Ease of use:
Most platforms provide simple interfaces to activate Earn with one click.
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❌ Cons:
1. 📉 Risk of price decline:
Even if you profit from the interest, you may lose more if the value of the original currency decreases.
> Example: You earned 5% from Earn, but the currency dropped 20% → you are at a loss.
2. 🕒 Locking funds:
Some options force you to lock currencies for a specific period (7 - 90 days), preventing you from selling during a sudden drop.
3. ⚠️ Platform risks:
If the platform fails, gets hacked, or declares bankruptcy (like FTX previously), you may lose everything.
4. 🧮 Uncertain returns:
The rate of profit may decrease or the terms may change without prior notice.
5. 🕵️♂️ Ambiguity of some projects:
Some currencies offer suspiciously high returns and may be misleading or unstable.
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🧠 Golden advice:
Only enter Earn with a currency you trust long-term, and study the return against the risk well.
And do not put your entire portfolio in Earn, but rather a part that does not affect if any emergency occurs.