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  • > Slashes Earn Rates, Will Users Flee the Platform? Slashes Earn Rates, Will Users Flee the Platform?

Late last month, introduced significant changes to their lending and staking rewards system. The update saw drastically reduced cashback on the company’s Visa card in addition to reduced staking rates.

Although the changes don’t officially take effect until June 1st, the effects of the reductions in rewards are already being felt within the market. The changes came just one week before a widespread selloff of cryptocurrencies in early May. is a well managed cryptocurrency exchange with one of the largest user bases and well-established brands. So while the changes may have upset a certain number of users, there is more than meets the eye. It is likely that this decision was difficult, but a strategic long-term decision to grow their business for years to come. Exchange

The Rate Update

In true style, the announced changes were met with user and community backlash. In the days following the announcement, CEO Kris Marszalek walked back the slashing of rewards to try and stem the upset. To those who have been with for a couple of years, this is the same strategy they used when updating rates in August 2021.

Prior to August, 2021, customers used to earn 20% APY on their CRO deposits, but this rate dropped to 6% only to rise back up to 10%. The critique here is that users are not given any heads up with these changes, and the reduction in rates are too much too quickly.

What they’re doing here is actually smart and necessary from a company perspective. They need to accomplish 3 things when making these large changes to their platform.

  1. They need to reduce rates which will inevitably upset users so that they make their business model more sustainable
  2. They need to make sure that insider trading doesn’t take place, which means that they need to drop the information “suddenly”
  3. They need to keep up their brand appeal and reputation as a service provider despite reducing rates

Accomplishing all three of these things at once is easier said than done. The model they’ve settled with and have repeated a number of times in the past is to drop the information, overstep in the changes, then walk them back. This initially irks a certain portion of the audience, only to reclaim user sentiment when they walk back the reductions.

The Rate Reductions

The newest set of rates put a serious cap on user rewards, especially the bottom two tiers of card holders (Midnight Blue, Ruby Red).

For starters, cashback for the Midnight Blue card is removed entirely. Ruby Red holders receive 1% cashback (instead of 2%). The Jade Green level is set to 2%, and the Icy White tier receives 3% (down from 5%). Additionally, rewards are capped at $25 and $50 per month for Ruby and Jade holders respectively. Lastly, staking rewards for the card tiers have been slashed. The Jade Green tier used to receive 10% APY, and now receives 4%. Icy White and Obsidian holders used to receive 12% and now get 8%.

It should be noted that initially wanted to reduce cashback for Ruby Red to 0.5% and Jade Green to 1.5% while removing staking rewards altogether. After customer backlash quickly revised the changes.

All of these reductions seem dismal on the surface, but there are different ways of interpreting the changes made by

User Growth on the Way

There are a couple of ways to read the rate reductions. I prefer to look at it as preparation for two things.

  1. A massive influx of users
  2. Interest rate increases from the federal reserve

Addressing the influx of users, obviously couldn’t sustain their current rates with another 5 million users being onboarded in 2022. So the reduction in rates is in anticipation of having to compensate a whole new cohort of users with rewards.

I think there is a lot to be said for companies reeling in their rewards in light of recent geo-political and socio-economic events. Money, debt, and investment are all becoming a little bit more scarce with the recent rate hikes at the federal reserve. The increase in the federal interest rate has already had cascading effects on the stock market and the cryptocurrency markets more broadly. Low interest rates correspond with more growth, while higher rates force companies to be more conservative with their spending. is Here for the Future

So in light of the above interpretation of the rate reductions, I can appreciate the decisions that has had to make. I myself am a long-time user of I bought their ICO, and have been invested in them ever since. I enjoy the service they give me, and am going to continue using their products for as long as they offer them to me.

While I enjoy when has high rewards and incentives in place, I want them to remain a service provider for as long as possible. So I trust that is a company that is well managed by competent and experienced people. I understand that tough decisions needed to be made, and I am ultimately happy that they made the decisions they did.

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About the Author

Keegan Francis

Keegan Francis is a cryptocurrency knowledge expert and consultant. He recognized the opportunity in cryptocurrency early in his career and has been invested in it since 2014. His passion led him to start the Go Full Crypto, a project that documents his journey of totally opting out of traditional financial services. Keegan has been living entirely off of cryptocurrencies since 2019.

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