Cake DeFi vs BlockFi – Which Is Better?

Cake DeFi vs BlockFi

When you are looking for ways to earn higher returns on your crypto, you may have come across Cake DeFi and BlockFi.

How are they different, and which should you choose?

Here’s what you need to know:

The difference between Cake DeFi and BlockFi

Cake DeFi gives you access to DeFi services like staking and liquidity mining, which BlockFi does not. However, you are able to earn interest on a larger variety of cryptocurrencies on BlockFi (10), while you can only earn interest on Cake DeFi with BTC, ETH or USDT.

Here is an in-depth comparison between these 2 platforms:

Founder

Cake DeFi was founded in 2019 by Dr. Julian Hosp and U-Zyn Chua. They are currently based in Singapore and have started out as a small team.

Meanwhile, BlockFi was founded earlier in 2017, and they are headquartered in New York.

Number of cryptocurrencies

Here are the different cryptocurrencies that you can earn with either platform:

Cake DeFi has 8 currencies

Cake DeFi currently supports 8 different currencies:

  1. BTC
  2. BCH
  3. DASH
  4. DFI
  5. DOGE
  6. ETH
  7. LTC
  8. USDT
Cake DeFi Wallet Supported Currencies

DFI is the native token of DeFiChain.

BlockFi allows you to hold 10 different currencies

Meanwhile, BlockFi only allows you to deposit 10 cryptocurrencies into your account.

BlockFi Number Of Currencies

The number of cryptocurrencies that you can hold are much lower on BlockFi.

Buying cryptocurrency

Cake DeFi allows you to buy BTC and ETH via SEPA or a credit card.

You can use USD or EUR to buy either cryptocurrency.

However, this feature is not available if you’re from Singapore.

Cake DeFi Buy Crypto Not Available In Singapore

You are able to buy DASH or DFI from BTC or ETH that you’ve either bought, or deposited from another platform.

Cake DeFi Swap Between Currencies

You can consider using Gemini to send your crypto to Cake DeFi as they do not charge you any fees for your first 10 withdrawals. Furthermore, Gemini’s Active Trader platform only charges you up to 0.35% for each trade you make.

BlockFi does not allow you to purchase crypto directly

Meanwhile, BlockFi only allows you to transfer USD into your account.

BlockFi Deposit USD

You are able to transfer your USD via a wire transfer. The minimum deposit is $10.

You are unable to buy crypto using your credit card.

When you deposit USD into your BlockFi account, you will receive the equivalent in GUSD.

GUSD is a stablecoin that is created by Gemini.

After depositing your USD, you can trade to other cryptocurrencies from your GUSD.

BlockFi Trade GUSD To Other Crypto

Interest rates

The main thing you’ll be interested in are the interest rates that either account offers you.

Both Cake DeFi and BlockFi allow you to earn interest based on the currencies that you own.

Here are the interest rates that you can earn on either platform:

Cake DeFiBlockFi
BTC5% – 7.5%0.5% – 6%
ETH5% – 7.5%0.5% – 5.25%

The interest rates that you earn on each platform depends on certain scenarios:

You will earn the higher interest rates on Cake DeFi based on the crypto’s performance

For both BTC and ETH, there is a base reward rate that you will receive.

However, if the price of BTC or ETH increases more than 20%, you will be able to receive the higher rate!

Cake DeFi Rewards Rates Lending

Even if the price of BTC or ETH goes down, you still will be guaranteed the base reward rate.

The highest interest rates you can earn on BTC and ETH is capped to a certain limit

For BlockFi, you will earn the highest interest rates your 1st BTC (6%) and your first 100 ETH (5.25%).

When you exceed this limit, you will earn a lower interest rate on your crypto.

The interest rates may change

Like all other accounts, the interest that you earn on your crypto is not guaranteed.

Cake DeFi offers their lending services in batches, which starts every week. The interest rates may change for each new batch that they offer.

For BlockFi, they will review their interest rates each month and make any changes accordingly.

How you earn your rewards

For Cake DeFi, your rewards are paid out to you within 24 hours after the end of your batch. Each batch runs for 4 weeks, so you are only paid your interest around every month.

This is rather similar for BlockFi, where your interest is paid on the first business day of each month.

Borrowers of both platforms

How can both of these platforms afford to pay you such a high interest rate on your crypto?

Cake DeFi is a decentralised finance platform. As such, the borrowers that Cake DeFi lends out your funds to are not really disclosed.

Due to the decentralised nature of Cake DeFi, it is possible that your crypto may be loaned out via P2P lending too.

BlockFi possibly provides safer loans

Meanwhile, BlockFi lends your crypto to “trusted institutional and corporate borrowers“. They also lend your crypto “on overcollateralized terms“.

Over-collateralization (OC) is the provision of collateral that is worth more than enough to cover potential losses in cases of default.

Investopedia

This means that your crypto is lent to rather reputable sources who are able to pay in case of a default.

This is less risky compared to the potential unsecured loans issued by Gemini Earn.

However, the assets that you own in BlockFi are not insured by the FDIC!

Deposit

Cake DeFi does not have a minimum deposit requirement. This means that you can start earning rewards on your crypto, no matter how little the amount is.

BlockFi also does not have any minimum deposit. However, you may not be able to withdraw small balances if you decide to only deposit a small amount.

BlockFi Deposit Currency Address

No deposit fees

You are also not charged any deposit fees for either account.

However, you’ll need to consider the fees you’ll incur when sending your crypto from an exchange!

This depends on the exchange that you’re using, and some of them may be very hefty.

Lock-in period

Cake DeFi has a lock-in period of 4 weeks for every batch that you choose to deposit your crypto into.

You aren’t able to withdraw the crypto from the batch after it’s been locked up.

Cake DeFi Lending Lock Up 4 Weeks

Meanwhile, BlockFi do not have any lock-in periods. This means that you are able to freely withdraw your crypto any time you wish!

However, you have certain withdrawal limits over a 7-day period:

CurrencyWithdrawal Limit
(Over 7-Day Period)
BTC100
ETH5,000
LTC10,000
Stablecoins1,000,000
PAXG500

Withdrawal fees

If you want to withdraw your crypto out of Cake DeFi’s platform, you will be charged withdrawal fees.

This depends on the currency that you intend to withdraw.

The withdrawal fees may be quite high, and may change from time to time.

However, the good thing is that you’re able to see the fees you’ll incur before making a withdrawal.

Cake DeFi Withdrawal Fee

BlockFi has one free withdrawal a month

Meanwhile, BlockFi allows you free withdrawals for each month:

  • 1 free crypto withdrawal per month
  • 1 free stablecoin withdrawal per month

This free withdrawal can only be applied to one currency only.

After that, you’ll be charged withdrawal fees which depends on the currency you withdraw:

CryptoWithdrawal Fee
BTC0.00075 BTC
ETH0.02 ETH
LTC0.0025 LTC
Stablecoins$10.00 USD
PAXG0.015 PAXG

These fees can eat into your returns! You may want to consider Celsius which does not charge any fees when you withdraw from your account.

Other features

Cake DeFi offers 2 other DeFi services:

  1. Liquidity Mining
  2. Staking

Liquidity mining requires you to stake a pair of tokens at a certain rate, to earn high yields on both tokens.

Cake DeFi Liquidity Mining Pairs

Most of these token pairs usually include DFI being paired with another token:

  1. BTC-DFI
  2. ETH-DFI
  3. LTC-DFI
  4. USDT-DFI
  5. BCH-DFI
  6. DOGE-DFI

Meanwhile, Cake DeFi also lets you stake your crypto with them, while they run the masternode.

So far, you can stake 2 tokens:

  1. DFI
  2. DASH
Cake DeFi Staking Currencies

You will be issued your staking rewards on a periodic basis.

Cake DeFi Receive Staking Reward

You can take loans on BlockFi

If you are looking to take a loan, you can do so on BlockFi.

BlockFi Loan

You will need to select a collateral from 4 cryptocurrencies:

  1. BTC
  2. ETH
  3. LTC
  4. PAXG

You can only take a loan in USD. This is more restricted compared to Nexo which allows you to take a loan using stablecoins.

The minimum amount you can loan from BlockFi is $10,000 USD.

BlockFi Minimum Loan

The interest rate that you are charged depends on your Loan-To-Value (LTV) ratio:

BlockFi Loan To Value Ratio

Platform

Cake DeFi currently only has a web platform.

Cake DeFi Web Platform

They do have plans to release a mobile app in the future.

Meanwhile, BlockFi has a web platform,

BlockFi Web Platform

and their mobile app.

BlockFi Mobile App

Security

If you intend to leave your funds with either account, you will be more at ease if they are secure.

So what measures do both of these accounts have?

Cake DeFi stores most of your assets in cold storage

Cake DeFi stores the majority of your funds in an offline ‘cold storage’.

If hackers gain access to Cake DeFi, they are only able to steal the funds from the hot wallet, which only contains a small percentage Cake DeFi’s holdings.

This is a common security measure on other platforms as well, so your funds should be rather safe.

BlockFi uses Gemini as their primary custodian

To ensure that some of your assets are available to be withdrawn quickly, BlockFi leaves your assets under the custody of 3 institutions:

  1. Gemini
  2. Coinbase
  3. BitGo

Gemini is BlockFi’s main custodian of your assets.

Majority of your assets on the exchange are stored in an offline cold wallet.

Moreover, the remaining funds in the hot wallet is insured.

Our policy insures against the theft of Digital Assets from our Hot Wallet that results from a security breach or hack, a fraudulent transfer, or employee theft.

Gemini

It seems that Gemini’s owners are quite confident about the security of their platform!

As such, you can be reassured that your assets are rather safe with BlockFi.

Verdict

Here is a comparison between Cake DeFi and BlockFi:

Cake DeFiBlockFi
Year
Founded
20192017
HQSingaporeNew York
Number of
Currencies
810
Buying
Cryptocurrency
Via SEPAAvailable
(via Exchange)
Interest RatesLower, but may
have bonus rates
Higher for first
BTC or first 100 ETH
Accrual
of Interest
Rewards given
every 4 weeks
Every 1st business
day of the month
BorrowersNot really
disclosed
Accredited
institutions
Deposit FeesNoneNone
Minimum DepositNoneNone
Lock-in Period4 weeksNone
Withdrawal FeesDepends
on currency
1st withdrawal for both
crypto and stablecoin are free
Other featuresStaking
Liquidity Mining
Taking loans
PlatformWeb onlyWeb and
mobile platforms
SecurityCold storage
+ hot wallet
Gemini as
primary custodian

So which platform should you choose?

Choose Cake DeFi for easy access to DeFi services

Apart from lending out your crypto, Cake DeFi allows you to stake your coins, or participate in liquidity mining.

If you do not have the technical know-how, doing these by yourself can be quite tough!

Both services have the potential to earn you really high yields, especially for liquidity mining.

Furthermore, Cake DeFi offers a more attractive rate on your BTC or ETH if you’ve exceeded the 1 BTC or 100 ETH limit on BlockFi.

Choose BlockFi for higher lending interest rates and lower withdrawal fees

BlockFi offers higher interest rates on your first BTC and first 100 ETH, compared to Cake DeFi.

However, Cake DeFi will offer a higher interest rate if BTC or ETH performs very well during the batch period.

BlockFi also offers one free withdrawal each month, which can help you save on the hefty withdrawal fees.

Currently, Cake DeFi charges you 0.0005 BTC or 0.03 ETH for each withdrawal you make.

If you intend to make one withdrawals each month, then BlockFi may be the better platform to save on your fees.

Conclusion

Both platforms offer ways for you to make your crypto work harder for you.

Here are some factors you may want to consider:

  1. The currencies you want to earn interest on
  2. Whether you want to use DeFi services, or you just intend to lend out your crypto
  3. Whether you want to save on a withdrawal fee each month

Cake DeFi Referral (Receive $30 USD worth of DFI tokens)

If you are interested in signing up for a Cake DeFi account, you can use my referral link.

After making your first deposit of ≥ $50 USD worth of crypto, you will be able to earn $30 USD worth of DFI tokens!

Here’s what you’ll need to do:

  1. Sign up for a Cake DeFi account
  2. Make a deposit of ≥ $50 USD worth of crypto into your Cake DeFi wallet
  3. Receive $30 USD worth of DFI tokens ($20 base + $10 referral bonus)

Your DFI tokens should be credited to you on the following Monday.

Cake DeFi Bonus Received

The DFI tokens that you earn will be locked up for 180 days in the Confectionery program. You will be able to earn the base APY for staking DFI tokens.

Even though your DFI is being locked up, you are still able to earn rewards on it!

Cake DeFi Receive Staking Reward

BlockFi Referral (Earn $10 USD in BTC)

If you are interested in signing up for a BlockFi account, you can use my referral link.

You will be able to receive $10 USD worth of BTC in your BlockFi account!

BlockFi Referral

Here’s what you need to do:

  1. Sign up for a BlockFi account
  2. Deposit $100 USD or more into your BlockFi account
  3. Hold the balance until the next interest paying day (1st business day of each month)
  4. Receive the $10 USD worth of BTC in your BlockFi account

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