At Donut, our goal is to provide the easiest and safest earning experience in DeFi. Today, we're excited to introduce our upcoming release of Plans, a super simple and secure way to work your money harder.
In 2021, the DeFi sector has grown exponentially to $60 billion. DeFi lending in particular is thriving, and has shown incredible resilience in the wake of recent crypto fluctuations. This is partly due to the technology being powered by stablecoins, which are 1:1 pegged to the US dollar.
At Donut, we’ve set out to take DeFi lending mainstream, by providing consumers access to higher interest rates over 20x what you would earn at your typical bank.
What are Plans? 🪐
We wanted to help you earn more with DeFi while also providing stability and certainty. And so, we've designed three simple plans:
Save is our most secure plan, offering a predictable 4% Fixed APY. We directly oversee your funds, lending them out only to a trusted pool of institutional borrowers. This is a great plan for steady saving, college funds and debt payments.
Save is exactly the same as Donut Fixed, with no change.
Build is designed to provide a balanced approach to capital preservation and growth by lending to institutional borrowers and by using Yearn, a trusted service that manages over $2 billion in assets. Yearn's unique algorithm optimizes your yields across several DeFi protocols (including Compound, Aave and dydx) to help you earn more interest on your money, so you can build your future nest egg.
In the prior app version, Build is similar to 50% Donut Fixed and 50% Variable Pro.
Grow is a yield-optimized DeFi lending opportunity powered by Yearn, designed to make the most of DeFi lending opportunities. The plan is perfect for income and capital growth.
In the prior app version, Grow is similar to Variable Pro.
Will the rates drop below 4%, 5% and 6%? 👀
No. As part of Plans release, we’re super stoked to introduce a protected base APY at 4%, 5% and 6% respectively.
DeFi lending rates often fluctuate due to borrower demand. We’ve spent a lot of time thinking about how we can give you high interest rates on your money plus stability in the case of rate variability.
Our new floor mechanism does exactly that. We rebalance your funds across our trusted lending partners whilst sharing some of our revenue to offer you a protected APY floor.
What are the fees? 💰
We never charge you any fees on top of what is displayed in app. 4% APY means you get exactly 4% APY.
We target an annual fee of 2% that is built into the Plans.
How do I get started? ✨
Once you complete the sign up process, you will automatically start on the Save plan. You can switch to Build or Grow by following three easy steps:
- Tap “Optimize” on the Home Screen
- Select a Plan
- Swipe the switch bar at the bottom, et voila!
What happens to existing users? ❤️
No worries, we got you.
If you are currently on Donut Fixed, your plan will automatically switch to Save, and nothing will change.
If you are currently on Variable, your plan will automatically switch to Save, giving you a fixed 4% APY on your investment. If you would like to earn more interest, you can switch to Build or Grow in the app at any time.
Variable Pro customers will automatically be transferred to Grow. There is no other change other than a protected base APY of 6%.
Why are we introducing plans? 🖐
We know you want more ease and security.
Whether you want to save with a conservative strategy, expand your wealth by maximising the potential of DeFi lending with an algorithmic approach, or find a happy balance between the two, we’ve got you covered.
In addition, we are providing everyone with more security and less risk by guaranteeing that you will always get 4% APY with our Save plan, a minimum of 5% with Build and at least 6% with Grow.
Is my principal safe? 🛡
We always protect your funds through overcollateralization. This is typically over 125% of your principal, and protects you in case a borrower defaults.
In addition, we only work with trusted partners with the highest security standards, such as Yearn, who safely manage over $2 billion in assets. Funds on Yearn are protected by regular smart contract audits and diversification across different lending protocols to further minimize risk.
Security is our top priority, and we will continue to add extra layers of protection in the coming months. If you want to learn more about risks, you can read our previous blog here.
Are Plans FDIC insured? 🏦
Whilst our trusted lending partners manage billion of dollars in digital assets, Save, Build and Grow are not FDIC insured, and therefore are not zero-risk.
What can we expect next with Plans? 😅
Our aim is to provide you with the best saving and earning experience with DeFi. These plans will continue as they are, although we may add new features and improvements.
We’re looking into adding more security over the coming months along with the ability to split your funds across Save, Build and Grow. We've got some exciting other updates too, but we can't reveal much for now!
Sounds awesome. When can I start? ⚡️
Plans will launch in the next week.
The Donut team is continually striving to make DeFi lending even more simple, accessible and secure for you, so we’re excited for this next step.
We hope that this article has helped clarify Plans, if you have any further questions, don’t hesitate to reach out by e-mail or DM us in-app.
Real Talk 🚨
Any saving and investment strategy puts your capital at risk.
The above information is intended for informational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.