According to the announcement, the new Dai Rewards program will allow eligible users to earn 2% annual percentage yield (APY) on their Dai holdings. Dai holders from the U.S., U.K., the Netherlands, Spain, France and Australia, who hold at least $1 worth of Dai in their accounts, will receive payments on a daily basis, though the first reward will be received within five business days.
The exchange said in its blog post:
“With yields on savings accounts and government bonds at record lows, earning rewards on stablecoins like Dai and USDC stands out as an alternative way to passively generate income using crypto held on Coinbase.”
Although a good way to earn passive income on your Dai holdings, this is not the only program Coinbase offers that awards Dai. The exchange has already added the stablecoin to its Earn project, which awards users with cryptocurrencies for interacting with educational content on its website.
The U.S. crypto exchange has been offering similar reward programs for a while now. Back in October 2019, the exchange launched a USD Coin (USDC) program, which offered users a 1.25% APY reward for every USDC they hold, though that reward was later reduced to 0.15%. A month later, the exchange also rolled out staking rewards for Tezos (XTZ) tokens, enabling its users to earn five percent interest rate on their XTZ holdings.
The issuer of Dai, MakerDAO, is one of the largest decentralized finance (DeFi) platforms, which according to data from DeFi Pulse has over $1 billion worth of cryptocurrency locked on its platform. MakerDAO is already offering interest on holding Dai, which prompted Coinbase to clarify that its rewards scheme was funded by itself.