[Updated] RIP Stablegains: 15% APY Crypto Savings Account

Update: Stablegains is shutting down and sign ups are no longer available. You can read a bit of my experience here: Stablegains Destabilized: How the Stablecoin Crisis Happened and What I’m Doing Next.

As always, this is not financial advice.

I finally got comfortable using Stablegains after sitting on the account for a year. It is currently my #1 stablecoin account for earning interest. This post will contain my referral links to Stablegains, which gets you a $25 bonus if you deposit $1000 or more for 30 days (see referral program details). Make sure the referral code IEWUE1AC27 is applied.

A year ago, I started seeing Facebook ads for a new crypto interest account. What’s this new, barebones startup offering 15% APY? What is Stablegains, and is it legit?

Using the rule of 72, earning 15% interest means doubling your money in under 5 years. Pretty impressive.

At that time, I hadn’t wrapped my mind around stablecoins yet. I was suspicious of how firms were able to offer such high interest rates using them. So I stuck with “CeFi” firms I was more comfortable with, like BlockFi and Celsius.

Since then a couple of things have happened that leads me using Stablegains and writing this review today:

• I finally understood where stablecoin interest came from and wrote an Intro Guide to Stablecoins.
• Friends I trusted started using – and telling me – about Stablegains
• New developments at Stablegains gave me more confidence

Let’s dive in.

What is Stablegains and how does it work?

Stablegains is a crypto startup that, in its current iteration, offers a crypto savings account.

They’re able to offer 15% APY by earning more yield in the decentralized finance world, then passing the difference onto consumers.

Here’s an excerpt of their mission:

Make it simple for regular people to benefit from advances in the financial system so they can reach financial freedom. We identify the best projects and make them accessible and understandable for individuals to benefit from.

One example of Stablegains identifying “projects” and making it accessible is their use of the Anchor Protocol. Anchor is part of the Terra crypto ecosystem that’s been offering a relatively stable 19% APY.

Getting your money onto Terra is not easy. I’ve tried it and there were a few surprise fees and transfers involved. Turning US Dollars into UST, which is required for getting Anchor protocol rates, is simply not that user friendly yet. Stablegains abstracts this away to make it easy so all a user needs to do is deposit funds from a normal bank account.

Imagine your smart crypto friend tells you “Hey, give me your money and I’ll manage it for you using my crypto knowledge. I’ll earn a lot of interest for us, then take a cut for myself.”

Stablegains (and most banking firms) operate with a similar model.

So why did I wait a whole year (and piss off my initial referring friend) before jumping in?

Is Stablegains legit?

A lot of people would see a claim like earn 15% APY and immediately think “Stablegains is a scam!” Luckily, bloggers like me act like your financial guinea pig so you can learn from my experience. I’ll start with a little-known reason that this startup gained my trust.

Stablegains recently joined Y Combinator as part of its Winter 2022 cohort. Y Combinator (or “YC”) is the famous startup incubator that has funded legendary companies like AirBnB, DoorDash, and yes…Coinbase. See the top companies they’ve backed.

Acceptance into YC gives me a lot more confidence in any fledgling startup. While YC startups can totally fail, they at least have to go through a rigorous application process—it’s like the Ivy League of startup incubators. Then YC funds startups $500,000 to get a 7% stake. This vested interest from a top Silicon Valley firm boosts my confidence.

As of August 2021, Stablegains has also registered itself as a Money Service Business “MSB” with the Financial Crimes Investment Network (FinCen). You can look up Stablegain’s registration number: 31000195645232. Their willingness to consider regulation up front also confers trust.

Legitimacy is different from having “no risk.”

At the end of the day Stablegains is using a DeFi protocol (Anchor) to generate yield. They convert your US Dollars or USDC to UST (Terra) on the backend in order to put it on Anchor and generate yield. The existential risk here is that UST, Terra’s algorithmic stablecoin, loses its peg. So please consider Stablegains an “investment” vehicle, for which the value of your holdings aims to be 1:1, but may fluctuate in value.

How to Use Stablegains.com to earn interest

Using Stablegains straightforward: it’s just like setting up any financial account.

1. Sign up using my referral link to get a free $25 bonus after depositing $1000
2. Connect your bank account to Stablegains using Plaid (this the gold standard for account linking that nearly all online banks use)
3. Deposit funds using ACH. It’ll take a couple days. You can also deposit using wire transfer or bring your USDC from another crypto wallet

Before, Stablegains only had wire transfers and USDC deposits. Now they have fast, same day ACH Transfers.

Here’s a slideshow of how depositing funds into Stablegains works:

Bonus tip: you can also buy USDC from crypto exchanges like Coinbase and transfer that directly to Stablegains. Just go to “Deposit” and follow the “USDC” instructions. This is also helpful if you already have USDC sitting around somewhere and want to gain higher yield.

Stablegain risks: how much should you put into the platform?

Stablegains is still in its infancy, but I think its barebones functionality is just fine for a crypto savings account. IMO the risks are mostly operational to the business:

Risks of using Stablegains

• Stablegains deposits are not FDIC insured (common for most investment products)
• The 15% APY may decrease just like at any other bank (also common and to be expected)
• The startup gets hacked or goes under (existential risk)

I test out new financial accounts with a few test transfers. Then after I get comfortable, I may put more money in. There is no perfect answer as it all comes down to two things: your comfort level and avoiding putting all your eggs in one basket.

The easiest way to check if Stablegains is a scam? Deposit a little deposit money in, then withdraw it. Kick the tires for yourself. I did and it works seamlessly.

For example, you might still hold a majority of your USDC elsewhere like Coinbase and BlockFi, then drip in some money into Stablegains to try it out.

I like how Stablegains is transparent about its risks in their FAQ. And by the way, you should turn on 2FA on your account (in fact…all financial accounts you have) for extra security.

At this point, I feel more confident about Stablegains as a company to begin experimenting more with it. If you’ve been looking for an “easy” investment that beats stock market performance without the volatility, then Stablegains is a compelling option to explore.

Get your Stablegains referral bonus

The current promotion is that you get $25.00 after signing up with a referral link and then depositing $1000. Here are my deets:

• Referral link: https://app.stablegains.com/signup?ref=IEWUE1AC27
• Make sure the referral code IEWUE1AC27 is applied during sign up

Happy rate hunting, stay safe, and let me know how your experience is using Stablegains!