When you transfer funds from your Xfers Account into your Earn Account, Singapore Dollars in your Xfers Account will be converted one-for-one into XSGD and credited to your Earn balance. You then earn interest in XSGD on your Earn Account balance.
Your Earn funds are held in XSGD stablecoins, as stablecoins run on the blockchain. This allows your funds to be in the same blockchain environment as the decentralised finance (DeFi) protocols where yield is generated.
You may redeem XSGD in your Earn balance (including earned interest) one-for-one for Singapore Dollars back to your Xfers Account at any time.