Burst Secure is first (& safest) Burst Basket. It reliably earns ~5% per year. Keep reading to learn how it makes you money, how it might change over time, and how you can earn beyond 5% right now!
Burst Secure is the first Burst Basket. Before we jump in, let’s take a step back and learn what they are and why they matter.
What are Burst Baskets?
Burst Baskets give you access the financial upside of web3 without dealing with the complexities. Specifically, we use DeFi protocols to earn interest on your money. DeFi protocols replicate traditional financial infrastructure (like lending) with one fundamental difference - the financial transaction is facilitated by efficient code instead of large institutions. Since it’s way more efficient, you get to keep what large institutions usually take. We find reliable, blue-chip DeFi protocols and make them easy for you to access in the form of Burst Baskets.
How does Burst Secure make money?
Burst Secure prioritizes safety and stability (learn about its risks here). With it, you can earn 5%+ annually even during bear markets & crashes. Let’s take a look behind the curtains and see how it works in four simple steps:
1. You deposit your regular dollars into the Burst Secure basket using the Burst app.
2. We convert those regular dollars into digital dollars like $USDC. $USDC is a stablecoin - it maintains the same value as the US dollar while allowing anyone in the world to use it. For every 1 $USDC, there is 1 $USD to back it up (and their treasury is regularly audited).
3. We deposit that $USDC into DeFi lending protocols who lend out the money to a global pool of borrowers. Lending protocols use the blockchain to establish trust and allow strangers to securely borrow and lend money without the need for a 3rd party (ex: a bank). This is very similar to how banks loan money. We partner with a variety of heavily vetted lending protocols like Compound, all of which follow the same principles.
Let’s take a look at Compound as an example to learn how your money is used in lending protocols. Compound has a pool of $USDC that borrowers from around the world can use to take out a loan. When borrowers (like hedge funds) take out a loan, they have to put up more money as collateral than the loan they take out. This is called overcollateralization. Their collateral is locked up in the lending protocol, which no one has access to. In addition, they agree to an interest rate and a payment date. If the loan is properly repaid by the payment date, then the payment & its interest go back to the lender (aka you) and the borrower gets their collateral back. If they do not pay back the loan, their collateral is automatically liquidated by the smart contract and sent to the lender.
4. Our money earns interest as borrowers repay their loan (or get liquidated). Since this happens constantly, your interest compounds every 15 seconds. This means you can take your money out anytime. At Burst, we have a certain amount of money on deck for you to withdraw. If you want to take out more money than we have on deck - we simply withdraw your deposits from the lending protocols and convert it from $USDC back to $USD.
Boom! That is how Burst Secure makes you money in 4 simple steps. But there’s more…
You can earn even more $ with Burst Secure!
If you refer a friend and they deposit $100, we’ll put $10 in your account. It’s that simple. To access your referral code, go to the home screen → your profile → share with friends.
Let’s wrap it all up!
Burst Secure helps you earn reliable & safe returns using DeFi, around 5% a year (learn about the risks here). That’s 250x a high interest savings account, and only 2% less than the S&P 500 yearly average with none of the volatility.
We use DeFi lending protocols. And because of their unique design, “conservative” DeFi investments earn way more than “conservative” traditional investments. As we find more reliable & vetted protocols, we will continue to diversify where your money goes. Diversification will make Burst Secure even more safe, reliable, and (potentially) profitable.
All this said, Burst Secure shouldn’t replace a traditional savings account. Rather, it should be part of a well-rounded investment portfolio.