Block Earner has secured $6.4 million in seed funding and is preparing to offer fixed income on Aave and Compound to Australian investors.

Australian fintech firm Block Earner has officially launched, offering everyday investors a 7% fixed-rate investment product using decentralized finance (DeFi) technology.

Block Earner has already caught the attention of big names in the crypto industry, closing a $6.4 million seed round last December. The financing was led by Framework Ventures, with participation from Coinbase Ventures, DeFi Alliance, LongHash Ventures, and crypto veteran Kain Warwick, founder of Australian crypto derivatives exchange Synthetix.

In an interview with Cointelegraph, Block Earner co-founder Jordan Momtazi said Australia’s current economic climate makes products that offer savings yield attractive, especially when it’s nearly impossible to earn similar returns using methods offered by traditional financial institutions.

According to a survey by Block Earner and Sydney-based market researcher Pure Profile, 86 per cent of Australians have noticed the impact of recent inflation and 22 per cent are concerned about how they will make ends meet given rising prices for goods and services.

When comparing the difference between traditional finance and DeFi’s return benchmarks, Montazi said:

"The best range of returns Australians can get from a traditional savings account is 0.1-0.3 per cent - compared to 7 per cent products like Block Earner, it's easy to see where people end up going."

Momtazi went on to say that the whole point of Block Earner is to ensure Australians have access to new technology every day without having to do any "heavy lifting" so they can grow their savings over time.

Block Earner works by exchanging Australian dollars for the US dollar stablecoin USD Coin (USDC). Block Earner lends USDC to two major DeFi protocols, Aave and Compound, providing yield to investors.

It’s also worth noting that Block Earner is the first fintech company to integrate mainstream into Aave and Compound.

While Momtazi promised investors a fixed return of 7% until July of this year, he added that Block Earner’s floating rate product could see investors return as much as 18% annually.

The booming and largely unregulated space of DeFi is not without risks, and companies like Block Earner still face the occasional problems in DeFi, such as smart contract glitches, demand for lending products and liquidity pools (Aave and Compound) Insufficient) suffer some form of attack.

Momtazi emphasized that Block Earner is a “conservative” company, emphasizing that the company “chooses a stablecoin like USDC because of its security and legality.”

We see conservatism as part of a long-term project. We believe security and trust are fundamental components of a long-term strategy, we just don't choose to double down on digital returns from other, less regulated areas. "

To assuage the fears of crypto skeptics, Montazi went on to say that Block Earner’s continued performance will gradually validate DeFi’s legitimacy over time.

“It’s only natural that new things are always considered scary — and we will continue to demonstrate the legitimacy of DeFi tech,”

While Block Earner is registered with AUSTRAC, Australia's financial intelligence agency, and protects investors' funds through Fireblocks, one of the world's largest digital custodians, the company does not need to apply for an ASIC license.

When it comes to the potential regulatory issues of the Australian government on DeFi products, Montazi is completely optimistic, saying that regulation is a positive measure for the encryption industry, and Block Earner is ready to adapt to the regulatory measures that Australian lawmakers deem appropriate.

"Legislation to legitimize the space in a better way ... the regulatory front so far has been very positive; enforcing standards around asset custody and keeping audits to a minimum, all of that has been positive."