Outlet Finance is yet another DeFi project that we think is important and well organized and about which we want to talk today. Outlet has very specific objectives for its customers, namely to offer 6% interest on their deposits, far surpassing the traditional banks that are lowering their interest rates ever more, even going so far as to provide negative interest rates (i.e. that we have to pay the banks for our money).
When accessing the Outlet Finance homepage there is a catchphrase that explains in 3 seconds what it is all about: ‘Earn 6% on Every Dollar you Save‘. And to start using the service just enter a phone number and the download link will appear in a few moments. In case you are already browsing the website through your smartphone, just click on one of the two logos for Android or App Store to access the relevant page of the chosen store. A remarkable simplicity that will help even the less experienced to take advantage of the excellent services offered by Outlet.
After downloading the App, it takes very little to deposit or withdraw your money. Deposits are made through an ACH bank transfer and are really fast. The great thing is that Outlet, unlike other lesser known DeFi products, also offers insurance on your money (for multiple purposes). At the time of writing, this insurance covers accounts up to 50,000 USD, but the limit can be increased if you decide to contact the Outlet staff directly, using this official link. (Outlet.Finance website contact page)
The site also offers a form where you can choose the amount you want to deposit and know in real time the interest (without hidden costs) offered by Outlet and traditional banks. If for example we want to deposit 19,000 dollars, we will immediately understand that with Outlet we will have 20,140 dollars in 1 year, while with traditional banks (those that have not yet applied negative interest rates) the return will be lower and the total in 1 year will be only 19,019 dollars. In this precise example the total difference is 1121 dollars. Imagine now these numbers on much larger sums. Advantageous, isn’t it? And the beauty is that Outlet accepts more than 11,500 banks for their deposits.
However, it must be remembered that in order to use the services offered by the site you still need to send your documents and pass the KYC (Know Your Customer). This is required by law and can not be skipped for any reason. After passing the verification procedure, your account will be enabled for ACH transfers (i.e. electronic bank transfers on American soil) up to 2500 USD. And don’t be alarmed if you don’t see your money after making the transfer. It can take 3-5 days to transfer, which means that money sent on Monday morning may arrive on Friday. The time depends on the banks, not the service in question. What depends on the service are the transfer fees, which at the moment are at 0% both incoming and outgoing. So deposits and withdrawals are absolutely free of charge!
But how does Outlet, which is not a bank, generate more income than traditional banks? By investing your money in alternative money markets. This money is then lent digitally to other users who pay higher interest rates than those you earn through Outlet. This way everyone earns money without using outdated intermediaries like banks. The beauty is that those who apply for a loan of $100 for example, will have to pay a much higher collateral that guarantees that the loan is paid back on time. In this case, for the 100 dollars the total can become 120-150 USD. Digital assets, such as Ethereum, are of course used as collateral. This is a somewhat complex process at first glance, but it is getting a great response since there are now almost 1 billion dollars locked in DeFi, whether those who want loans or those who provide them. This number will continue to grow as there are very few people who trust centralized finance in 2020. (Just see how much money has been printed to fight the crisis caused by Covid-19).