Kraken currently has an offer to rebate 3% of a deposit into Defi, giving you this in USDC. You also get 6.37% APY. As I dont fully understand the concept of stablecoins, I have a few questions. The offer looks enticing to diversify my risk and perhaps transfer some savings to this concept since the rebate offer combined with the high yield seems very attractive…..almost too attractive. Im looking for an answer how this concept compares to the regular old fiat savings account at a bank

Many questions arise

I understand

– that the APY can fluctuate

– USDC follows the dollar 1 on 1 at all times (as far as I can tell)

– USDC is immune to all price fluctuations, except of course the dollar (right?..)

– Taxes might be different, but probably not where Im based (Netherlands)

– Euro/dollar fluctuations have impact. I see this as a bonus, since the dollar has piss poor value thanks to a certain narcissist. Should increase in favor of the dollar again in 2-4 years if/when Americans decide to finally vote for a non-drooling 70+ toddler

– It seems like a savings account but with a few extra steps. Since my bank gives a whopping 2%, those steps arent a problem (ceteris paribus)

I dont understand

– What drives the real value of USDC? Is it just a digital copy, nothing more, nothing less? Why should anyone choose the copy over the original?

– Who pays my APY? Is it just a leverage thing by Kraken/their partner?

– Kraken states that their partner reinvests it in USDC and some coin called Euler, which is doing abysmal in the charts. I have a hard time imagining its sustainable, but Im likely missing something simple

On paper this seems like an excellent deal to replace your fiat savings account with, but Id like to understand the increased risk, if any. Some insight would be appreciated

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