If you have been thinking of diversifying into alternative investments, and peer-2-peer investing is on your list, then check out this review of MyConstant.
|Services:||Cryptocurrency loans and income services|
|Price/Fees:||No fees for lenders or borrowers (partners may charge wire transfer fees)|
|Main features:||3 basic products i) pooled lending, ii) peer2peer lending, iii) crypto liquidity lending|
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MyConstant is a US-based cryptocurrency peer-2-peer investing and lending platform.
For investors, MyConstant has three products:
- Instant Access is an investing pool that pays 4% APY where you can withdraw your funds anytime with no penalty.
- Crypto-backed is an investment product where you choose to lock up your funds from 1 to 6 months. 1 month will earn you 6% APY while 6 months will earn you 7% APY.
- Crypto-lend is where your cryptocurrency provides liquidity to the markets. You earn 4% APY and can withdraw at any time.
The advantage for investors is you gain access to much higher rates of fixed return than are available from other sources such as certificates of deposit, and you can diversify your portfolio into cryptocurrencies as alternative investments.
For borrowers on MyConstant, you put up your cryptocurrency as collateral, and the platform loans you either in cryptocurrency or fiat currency charging you interest. The loan approval process is much simpler than with conventional sources of loan capital.
The MyConstant platform also has 24-7 customer support, charges no fees, and has a library of helpful online educational financial materials.
However, MyConstant uses partner organizations as custodians and exchanges. ACH transfer fees do apply. Also, MyConstant is a young and growing company. Customer complaints show that they have struggled at times with processing requests for withdrawals. On the positive side, MyConstant engages and responds to all customer complaints and seeks to resolve any issues.
MyConstant Instant Access
Open an Instant Access account with MyConstant and your funds will be earning interest every second of the day and night. You receive 4% APY constantly compounded and updated to your account balance.
Make withdrawals anytime, there are no fees. The minimum investment is $10 and there is no maximum. You also receive a $15 reimbursement for any wire transfer of $1,000 or more.
With an Instant Access account, your rate of interest beats the rate on a savings account by a factor of fifty times and you still have access to all your funds at any time with no fees, hidden costs, or penalties.
Your funds will form part of a collateralized lending pool from which borrowers can take out loans then pay interest on those loans. Your deposit is protected because MyConstant monitors the value and exchange rates of the components of the pool calling in collateral on loans if the value drops to preset threshold levels.
MyConstant is a US-based cryptocurrency company. It is not a bank or a financial institution that is covered by the Federal Deposit Insurance Corporation or FDIC. However, MyConstant manages its assets and liabilities to ensure that your deposits are protected.
If you are able to tie up your funds for fixed terms, MyConstant crypto-backed investments will pay you higher rates of return. This is peer-2-peer investing and lending. The rates and terms available are:
- 5% APY for 30 days
- 6% APY for 60 days
- 7% APY for 180 days
The minimum investment is $50 and there is no maximum. Like with the Instant Access account, MyConstant cashback $15 for each deposit equal to or larger than $1,000
MyConstant protects your investments by requiring borrowers to put up 150 to 200% of the sum they borrow, depending on the types of cryptocurrencies they are using as collateral. MyConstant sells the collateral if the borrower defaults on the loan or if the value of the collateral drops to a threshold level set to 110% of the loan plus any unpaid interest. This is not the same as FDIC coverage but it does give investors confidence that their funds are protected.
MyConstant Crypto lend
MyConstant crypto lend is another product that gives you instant access to your funds. With Crypto lend you are putting up your cryptocurrency to provide liquidity to crypto exchanges and lending pools. For your Bitcoin/BTC, Ethereum/ETH, or Binance Coin/BNB you will earn 4% APY. Interest is accrued to the balance on your account every second round the clock.
An account minimum of 0.001 BTC applies. MyConstant also applies a maximum of $3 million on these accounts. You can withdraw funds at any time with no fee or penalty.
MyConstant for borrowers
Borrowing on MyConstant can be achieved in a matter of minutes. You use any combination of up to 71 cryptocurrencies as collateral. You choose whether your loan has a 30-day, 60-day, or 180-day term. You choose whether you want to receive your loan in cryptocurrency or in fiat currency. There are no fees. Your funds are held in secure escrow using smart contracts and Prime Trust. This way your collateral is protected and MyConstant can return it to you as soon as you repay your loan without delay. There are no background checks or credit score checks.
If you are interested to give peer-2-peer investing a try MyConstant currently has a free trial offer. With this promotion you open an account, MyConstant will credit your account with $4,000. You will experience compounding interest for 15 days. At the end of the 15 days, MyConstant reclaims the $4,000 but the interest earned stays on your account. This offer only applies to US citizens and is for a limited time.
As a US citizen, if you sign up friends or acquaintances for MyConstant you will also earn a $10 bonus once they have passed Know Your Customer, or KYC requirements and deposited at least $10. You will also earn 10% of the interest they earn during their first year of investing with MyConstant.
Protections and risk
It would be untrue and misleading to claim that there is no risk in this investment model. There is always risk involved in any type of investment. However, MyConstant is very careful about which cryptocurrencies it accepts as collateral, ensuring that only liquid assets are held that can be sold instantly should the need arise.
It is important to note that MyConstant is not a bank and it uses partners as custodians of fiat currencies and cryptocurrencies. This is intended to add extra layers of protection for both customers and for MyConstant.
The effect though is that transfer processes, in particular, ACH transfers can take a number of business days.
While MyConstant does not charge fees, their partners often do. In particular, you will be charged fees for ACH transfers.
MyConstant is registered on Trustpilot and there are many customer reviews. I read through all the bad ones and all of them had responses from MyConstant and attempts from MyConstant to resolve the issue.
Many of the very positive reviews are quite short and from people who seem new to the platform.
However, there are many elements to investing with MyConstant that you should carefully consider before taking the plunge. Firstly, it seems to me that transfers take time and often more time than anticipated and you have to understand the process to avoid making any mistakes.
From the complaints, it seems that customers often have problems if they try to cancel or change a transfer before it has gone through and been verified. It seems advisable to read and carefully follow all instructions. It also seems that you need to have reasonable expectations of the time it takes to process transfers. If you experience problems then reach out to their customer service. It does look as if MyConstant seeks to resolve these issues though.
A number of complaints also related to transfers using Zelle. MyConstant has stopped using Zelle.
It also looks as if MyConstant was understaffed at times during 2020. Both MyConstant and some of their partners were having trouble keeping up with the volume of requests for withdrawals.
Some borrowers also complained about losing their collateral when MyConstant sold it to cover the loan. There is a risk of this happening during flash crashes. You should be aware that flash crashes happen from time to time in the cryptomarkets.
Generally, MyConstant takes all feedback whether positive or negative and tries to use it to correct issues and grow the company.
If you are unsure about this area, this article explains more about cryptocurrency exchanges.
You will probably also have heard of the term blockchain, in connection with cryptocurrencies.
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Disclaimer: I am not a financial professional. All the information on this website and in this article is for information purposes only and should not be taken as personalized investment advice, good or bad. You should check with your financial advisor before making any investment decisions to ensure they are suitable for you.
Affiliate Disclosure: This article contains affiliate links. If you click on a link and buy something, I may receive a commission. You will pay no more so please go ahead and feel free to make a purchase. Thank you