Compound interest sounds technical, but the idea is simple: it is interest on interest. Because the Trade Lend Earn program credits your interest daily and reinvests it automatically, your balance grows a little more each day. This article shows exactly how that looks over a concrete 12-month example.
Key takeaways
- Compounding means interest that has already been credited earns interest itself.
- In Earn, interest is credited daily in the respective coin and reinvested automatically.
- At 3% p.a. with daily interest, the effective annual return is about 3.05%.
- Everything is counted in the coin — the coin price can still move up or down.
What is compound interest?
With simple interest, only the amount you originally deposited earns interest. With compound interest, the interest that has already been credited is added to your balance and earns interest from then on. „Interest on the deposit“ becomes „interest on the deposit plus all interest so far.“ The more often interest is credited and reinvested, the stronger the effect.
- Simple interest
- Interest only on the amount you originally deposited. Credited interest does not earn further interest.
- Compound interest
- Interest on the amount plus all interest credited so far. As a result, the balance grows a little faster.
- Reinvestment
- Each interest credit is added automatically to your interest-earning balance instead of being paid out separately.
Why daily crediting matters
In the Earn program, interest accrues daily — not just at the end of the month or year. Each daily credit immediately increases your interest-earning balance, so the very next day a slightly larger base earns interest. Over a year, these many small steps add up to a return that is slightly above the plain nominal rate.
At a fixed rate of 3% p.a., the daily rate is about 0.0082%. On an illustrative deposit of 10,000 coins, that is a first-day credit of roughly 0.82 coins. It looks small — but because each credit raises the base for the following day, the daily amount slowly grows over the course of the year.
Effective, not just nominal
3% p.a. is the nominal rate. Thanks to daily reinvestment, the effective annual return is about 3.05%. The difference is the compounding effect — honestly calculated and without any assumption about the coin price.12-month example at 3% p.a.
Take an illustrative deposit of 10,000 coins in the fixed plan at 3% p.a. All figures below are expressed in coins, because that is exactly how crediting actually happens: in the same asset you deposited. This is a purely illustrative calculation.
- Day 1: a credit of about 0.82 coins. New balance: approx. 10,000.82 coins.
- From day 2 this slightly higher balance earns interest — the daily amount rises marginally.
- After 12 months: approx. 10,304.5 coins, i.e. about 304.5 additional coins.
Remember
The fixed 3% rate is guaranteed for the first 12 months. After that a fair, market-standard rate applies. What is guaranteed is the interest rate — not the coin’s price value.Monthly snapshots
The table below shows selected snapshots of our example: 10,000 coins, fixed plan at 3% p.a., interest credited daily and reinvested automatically. Values are rounded to one decimal place.
| Point in time | Balance (coins) | Interest so far (coins) |
|---|---|---|
| Start | 10,000.0 | 0.0 |
| After 1 month | ≈ 10,025.0 | ≈ 25.0 |
| After 3 months | ≈ 10,075.3 | ≈ 75.3 |
| After 6 months | ≈ 10,151.1 | ≈ 151.1 |
| After 9 months | ≈ 10,227.5 | ≈ 227.5 |
| After 12 months | ≈ 10,304.5 | ≈ 304.5 |
Notice how the gain per quarter grows a little from quarter to quarter, even though the rate stays constant. That is compounding at work — the interest-earning base grows with you.
Counted in the coin — the price moves
Every figure above is expressed in coins. This matters: over time you accumulate more units of your coin. What those coins are worth in US dollars depends on the current price — and that can rise or fall. Compounding increases the number of coins you hold; it says nothing about their price value and does not remove the price risk.
Price risk remains
More coins do not automatically mean more fiat value. If the coin price falls, the US-dollar value of your balance can decline despite the interest credited. The guaranteed rate applies to the interest, not to the price.Flexible or fixed
The compounding effect works in both Earn plans, because both credit and reinvest daily. What differs is the rate and the availability:
- Flexible – 2.5% p.a.: variable rate, no fixed term, withdrawable any time on request.
- Fixed – 3.0% p.a.: guaranteed for the first 12 months, then a fair, market-standard rate.
Which plan suits you depends on whether certainty or maximum availability matters more to you. We go deeper into that trade-off in Earn: fixed or flexible?
How to start
Model your potential return without obligation and without an account, and choose your plan in the Earn section. For a detailed comparison of the fixed and flexible plans, read our guide Earn: fixed or flexible? All amounts in the examples are illustrative; interest is paid in the respective coin, and the US-dollar value depends on the price.
Frequently asked questions
Compound interest arises when interest that has already been credited earns interest itself. Because Earn credits your interest daily and reinvests it automatically, your growing balance earns every day — not just the original amount.
At 3% p.a. with daily crediting and reinvestment, the effective annual return is about 3.05%. On an illustrative deposit of 10,000 coins that is roughly 304.5 additional coins after twelve months. The fixed 3% rate is guaranteed for the first 12 months; after that a fair market rate applies. All figures are purely illustrative.
In the same coin you deposited. If you deposit BTC, you earn interest in BTC and accumulate more BTC. The fiat (US-dollar) value of that balance depends on the current price and can rise or fall — compounding does not change the coin price risk.
No. Reinvestment is automatic. Each daily credit increases your interest-earning balance without any action from you. Your coins remain yours and are withdrawable on request.
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This article is for general information only and does not constitute investment, legal or tax advice. Crypto loans carry risks, including price fluctuations of the collateral.