It’s about time to put on your oven mitts, because what we’re going to present today is so hot that you’d otherwise burn your fingers, our Freezer Program!
Currently, the ‘Freezer’ supports DFI and Dash staking. However, we already have firm plans in our flour drawers to roll it out to the majority of our current and future product lines like lending, other staking coins and even stocks.
The minimum deposit required is just 1 DFI, allowing more bakers to enjoy the flexibility and advantages of our Freezer. With our ‘Freezer’, we want to empower our bakers to individually set their preferential lock-away period — from just a few days to as long as several years — adjustable in just a few clicks. At the same time, the underlying mathematical function leads to an incremental rise in APY — the longer you lock away your investment, the higher your APY gets!
But now it’s time to showcase our ‘Freezer’. For this job, we’ve hired Alice and Bob, the two most experienced bakers in town, to take you on a tour through our amazing ‘Freezer’. Alice is still a student, lives at home and just wants to invest 1,000 DFI, whereas Bob has saved his whole life and is willing to invest 100,000 DFI by using the ‘Freezer’. Both have the option of withdrawing their returns or of reinvesting and compounding them (Figure 1).
Figure: How does the ‘Freezer’ work
After Alice has bought 1,000 DFI on Cake DeFi, she navigates to the ‘Freezer’ and she considers the myriad freezing options her favorite crypto company offers. After which, she scrolls down to the yield calculator and keys in the amount of DFI she wants to freeze as well as considering the targeted investment period. Figure 2 shows that Alice would receive nearly $US 1,170 by staking her 1,000 DFI for 6 months. However, if she now decides to lock away her DFI for 6 months using the ‘Freezer’, then she would earn an additional $US 23 extra.
Figure 2: Alice’s investment - 6 months
Yet, if she now decides to lock away her DFI savings for 10 years, then she would be able to enjoy an 85% discount on the staking fees (Figure 3). The difference compared to the normal staking without freezing her assets is tremendous: she would receive a significant $US 11,315 on top. Since Alice is thinking long term and has firm plans to build a house in the future, so she freezes her 1,000 DFI in order to enjoy the extra returns.
Figure 3: Alice’s investment - 10 years
Bob on the other hand is investing from a totally different perspective. His focus target is to receive enough cash flow from his investment to invite his wife to a once-in-a-lifetime, around the world cruise next year. For this purpose, he transfers his DFI to Cake DeFi to generate the needed cash flow out of his investment to pay the cruise bill. Since Bob wants to maximize his returns, he directly navigates over to the ‘Freezer’ and keys in his data into the yield calculator.
The result is striking: by staking 100,000 DFI for 6 months, Bob would receive nearly $US 117,000 in cash flow, but if instead he would freeze his coins for 6 months, then he would earn an additional $US 2,000+ extra, which is enough to spoil his wife with some good champagne and her favorite pastries during the cruise (Figure 4). In the end, that’s a compelling case for Bob and without hesitation he freezes his 100,000 DFI, already planning out the trip details in his mind.
Figure 4: Bob’s investment - 6 months
* Please note, that the used examples, numbers and figures, represented the rates during Q1 2021. The current rates may differ and can be seen on your Freezer page. Those rates may be subject to change in the future.
The staking yield can fluctuate due to a variety of factors, most notably: A higher number of staking masternodes in operation & time delays or failures of blocks
Both cases are not determined by, nor can they be influenced by, Cake DeFi. Cake DeFi serves as a technical provider and only forwards the received staking rewards to the users.
**Please note that in the meantime, the 5 and 10 year OnChain Freezer will go live at Cake DeFi. The 15% fees still apply for these. With the new 5 & 10 year freezers you no longer have a discount on the fees. This is effective immediately.