FAQ’s on M2 Earn

1. What is Earn?

M2 Earn allows users to earn rewards on their digital assets. With M2 Earn, users have the advantage of growing their crypto holdings by earning passive income on their idle assets.

The rewards are generated through:

1. Staking in Proof of Stake (PoS) networks.

2. Mining hash power from Proof of Work (PoW) networks such as BTC.

3. Over-collateralized lending of assets.

4. Basis earned from perpetual futures funding arbitrage.  

2. What types of plans are offered under Earn?  

M2 offers the following Earn plans across various assets:

a. Fixed-duration plans: These plans have durations of 30, 60, or 360 days. Assets deposited under Fixed plans are automatically returned at the plan’s maturity date (end date of the plan).

b. Custom-duration plans: The terms for these plans are similar to Fixed-duration plans except users have the option to decide customizable durations depending upon their schedule. Custom plans range anywhere between 30 and 360 days.  

c. Flexible plans: Flexible products allow users to redeem assets fully or partially whenever they need. Assets will be credited within 24 hours of the next reward cycle.

3. How are Earn rewards calculated?  

All Earn plans on M2 operate on a 24-hour reward cycle, with each cycle starting at 10:00 am UTC.

Users can subscribe to Earn plans any time. Once subscribed, users will be able to start accruing rewards beginning from the next reward cycle.  

Example 1: Alice subscribes 10,000 USDT to a 4.5% APR Fixed 60-day plan at 17:00 pm UTC on 16/8/23. This subscription gets activated at 10:00 am UTC on 17/8/23, and the first reward will be credited to Alice on 18/8/23 at 10:00 am UTC.

Example 2: In each reward cycle Alice will earn 1.25 USDT. A 60-day plan has 60 reward cycles, so Alice will earn a total of 75 USDT once the plan matures.  

Daily Reward = Deposit Amount * APR * 1/360  

It is important to note that Flexible plan rewards are calculated using the smallest balance held in the plan throughout each reward cycle.

Example 3: Bob creates a flexible plan with 10,000 USDT. His eligible amount at the start of the reward cycle is 10,000 USDT. If he adds 500 USDT to his Flexible plan at 11:00 am UTC and then removes 1,000 USDT at 16:00 pm UTC, his qualifying amount for rewards at the end of the cycle is 9,500 USDT.  

Should a user cancel a plan, no rewards will be given for the reward cycle during which the plan was cancelled, and the cancellation was confirmed.

Example 4: If Bob cancels his plan at 21:00 pm UTC on 21/8/23 which is validated and confirmed by M2, no rewards will be provided for the reward cycle ending at 10:00 am UTC on 22/8/23.

4. When are Earn rewards distributed?

The initial subscription, along with accumulated rewards, is distributed either at the end of the plan (upon maturity) or upon cancellation (subject to penalties mentioned in FAQ#6).

Example 5: Continuing the first example from our previous question, Alices initial subscription to the Fixed 60-day plan is 10,000 USDT at 4.5% APR. If the plan activated at 10:00 am UTC on 17/8/23 gets cancelled on 19/8/23 at 21:00 pm UTC, then 10,002.5 USDT will be credited to Alices account. The amount credited is subjected to a reward penalty (explained in FAQ#6).  

Example 6: If Alice keeps her plan open to maturity, then she would receive 10,075 USDT (10,000 USDT initial deposit + 75 USDT in rewards) once the plan expires.

5. When do I begin earning rewards?

Rewards start accumulating from the beginning of the subsequent reward cycle after subscribing to an M2 Earn plan. Each reward cycle starts at 10:00 am UTC.

6. Can I cancel a plan before its maturity?

Flexible plans: Yes, these plans can be wholly or partially cancelled at the user's discretion without any reward deductions. Please note that your assets may be credited within 24 hours for Flexible plans.

Fixed/Custom plans: Cancellation requests are subject to M2's approval. If M2 accepts a cancellation request for an Earn plan, the original deposit will be returned, and a penalty will be applied to the accrued rewards (75% of the APR earned for all assets).

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7. Are there any fees if I cancel an Earn plan before its maturity?  

Yes, rewards will be reduced by a penalty when cancelling Fixed or Custom plans before maturity. The exact amount depends on the plan and will be conveyed to the user before the cancellation is confirmed.

8. When will I get my assets after closing an Earn plan?

The timeline to return assets post plan completion or cancellation varies based on the asset and plan type. Once the reward cycle ends M2 endeavors to return assets within 24 hours for Flexible plans and within 48 hours for Fixed and Custom plans.

Example 7: If Bob cancels his Flexible plan at 17:00 pm UTC on 25/8/23, then the plan will be disabled at 10:00 am UTC on 26/8/23, and he will receive his assets by 10:00 am UTC on 27/8/23.

9. Are there any limits to Earn plans?

Yes, there are minimum and maximum subscription caps per user, as well as pool limits for each plan. You will see the limits left in any pool when selecting a plan.  

10. Are there any fees for starting Earn plans?  

No, starting an M2 Earn plan is completely free.

11. What is Boost?  

By enabling Boost on Fixed/Custom plans users can earn $2 worth of bonus rewards* over the life of their plan for every $1 of MMX they burn today. The amount of bonus rewards available scales with plan size and may differ between assets and plan durations.

Example 8: Charlie is considering boosting a 10,000 USDT 360-day Fixed Plan that yields 5% APR without boost and 7% APR with boost.
Without Boost the 10,000 USDT deposit would yield 500 USDT in rewards over 360 days.

With Boost the same plan would earn an additional 200 USDT over 360 days (700 USDT in total earnings) in exchange for burning 100 USDT worth of MMX today*.  

The process of burning MMX is automatic. Charlie simply needs to enable boost and confirm his plan. The required MMX will be automatically debited from his account. If Charlie does not have any MMX, he will need to purchase the asset first in order to take advantage of Boost.
*Assuming the price of the reward asset stays the same

12. Why do Flexible plans and Fixed/Custom plans have different returns?

Fixed/Custom plans typically offer higher returns because they require a commitment for a specific period, whereas Flexible plans can be cancelled at any time.

13. How does M2 determine which tokens are included in Earn plans? Will this list expand?  

Curating which tokens are eligible for Earn plans is a continuous process. At M2 we consider several criteria: the potential for sustainable yield generation, the token's popularity, its scale, and a comprehensive evaluation of both the asset and its underlying network.  
We are actively exploring the inclusion of more assets and plans.  

14. Will Earn plan reward rates be subject to change?  

Yes, reward rates are periodically reviewed and adjusted based on the evolving yield opportunities available to M2.

15. How do alterations in Plan rates affect existing Earn plans?  

Rate adjustments are applied instantly to all active Flexible plans. Existing Fixed and Custom plans are typically unaffected by new rates. The revised rates will apply to new Fixed and Custom subscriptions. However, M2 retains the discretion to modify and duly notify users of rate changes to existing Fixed/Custom plans.

16. How does M2 generate yields from assets in Earn plans?  

M2 consolidates assets from each plan and allocates them into various yield generating opportunities: staking, liquid staking, and lending.

17. What risks are inherent in M2's yield generation?  

Yields on M2 are generated through multiple activities: staking, liquid staking, proof of work mining, basis arbitrage, and over collateralized lending. The predominant risks present in these strategies are counterparty risk, operational risk, credit risk, and market risk.

See the Disclosures in Section 7 of the Earn Terms & Conditions for a greater discussion on Risks.

18. Is my principal safe with Earn plans?

As with all investments, M2 Earn plans come with risks. M2 endeavors to minimize risk through diversification and rigorous due diligence on yield-generating opportunities. However, M2 doesn't guarantee principal preservation. Before committing to an Earn plan, users must understand the risks and consult professionals and review the Product Risk Disclosure.  

19. Are there overarching risks associated with M2?  

While assets under Earn plans reside in M2’s custody, users do bear some inherent risks. Nonetheless, M2 is bolstered by a robust capital foundation. Our team consists of seasoned industry experts complemented by emerging professionals. M2's commitment to best-in-class processes and information security further ensures the safeguarding of assets in our custody. For regulatory assurance, M2 operates under the purview of the Securities Commission of the Bahamas (SCB).