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Generate Passive Income With DeFi

admin — Tue, 13 Dec 2022 08:50:00 +0000

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Many people are afraid of making money with cryptocurrencies because of untrustworthy investments such as the trend for NFTs, news about “hype” altcoins, or the risk of high-frequency trading. On the other hand, a cryptocurrency can be securely stored and generate a profit. Safer DeFi tools, which are unjustly underutilized, are ideal for this.

Earn the Highest Interest On Crypto

Crypto exchanges strive to have as many users as possible deposit funds with them. This allows exchanges to increase liquidity and use cryptocurrency for other purposes.

A savings account is the best way to earn high interest on cryptocurrency. This method is suitable for beginners because you don’t need to understand stock exchange quotes or know complex terms.

High Interest Crypto Savings Account

It functions similarly to a bank deposit in that an investor “rents out” a portion of his savings to an exchange or platform in order to return it later with interest. The percentage is determined by the exchange’s terms or the digital currency in which the investor deposits his assets.

The interest is charged because the bank uses the users’ digital assets to conduct other transactions, cryptocurrency loans, and blockchain operations.

Smart contracts, in general, include a guarantee of return on demand. For example, you can deposit $1,000 and receive up to 15% per year in USDT, or approximately $150.

A savings account has two types of contracts: flexible and locked. Flexible has a low-interest rate and allows you to withdraw money whenever possible. Locked has a higher interest rate because it’s set for a specific period (several days or months). There will be no way to withdraw funds before the expiration date.

You can use a calculator to determine which option will earn you the most money: several short-term placements or one long-term placement.

Pros: You can begin with a small investment and see how it goes. There is no requirement for equipment or investor qualifications. If you choose a trustworthy platform for placement, the risk of losing money is minimal.

Cons: The risk of joining a fraudulent platform remains. You won’t be able to earn a lot of money all at once. Offers with a high-interest rate are quickly weeded out.

Earn Crypto Passive Income

Of course, a savings account is not the only way to generate passive income, but it’s the most straightforward. How can you increase your income even more?

Staking. This concept refers to a contribution to a digital project in order to keep its cryptocurrency network running. To participate in staking, the user transfers the savings to the wallet or exchange account, where they are frozen. The percentage is given to the person with the largest staking wallet. Learn more about staking crypto in our article.
Yield farming. The user invests his digital savings in the exchange, distributing them as interest-bearing loans to other users. The owner of the coins is charged a percentage for this service. Investors are constantly moving funds between platforms in order to increase their income. They do it on their own, using specific strategies in order to profit from the difference in coin values.

Passive ways to make money with cryptocurrency can boost investment profitability or at least partially compensate for losses in a force majeure situation. However, if you want to increase your profits while also being willing to take on more risks, it makes sense to try your hand at crypto trading. Experienced traders earn more than 20% per month, and in some cases, per day.

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Creating Passive Income With Crypto

admin — Thu, 08 Dec 2022 06:47:00 +0000

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Passive income is a popular topic among millennials. They have more investment options than previous generations. And this is entirely justified: creating additional sources of income is a necessity in an increasingly unstable economic situation.

Interest With Crypto

There are other ways to earn passive income on cryptocurrency aside from investing and trading. You will also receive interest from capital. However, the growth of funds will occur not only due to the dynamics of the exchange rate, but also for the fulfillment of certain conditions.

Staking is a type of passive income in the cryptocurrency industry that consists of receiving rewards in the form of coins in exchange for the user storing digital assets in their accounts. To receive a reward, the user must save the available coins, keep the computer turned on, and the crypto wallet activated. Following the creation of each block, a randomly selected activated wallet is chosen, on which checks will be performed.
Lending is a type of passive income based on the transfer of assets for collateral from one user to another. The received funds exceed the issued funds as well as the interest rate. The average annual income from landing pages is 12-15%, depending on the exchange. Each platform independently determines the interest rate and provides digital assets based on it.
Yield farming. You put your coins in a liquidity pool or lend to others. You are rewarded in the form of interest or transaction fees for this.

Earn Interest On Stablecoins

A stablecoin is a crypto token whose value is pegged to the value of a fiat currency. The earliest and most popular stablecoin is Tether (USDT).

The original way for investors to profit from digital currencies was to purchase assets and hold them in anticipation of price increases before selling them. This strategy generally works because the cryptocurrency rate is constantly increasing, despite temporary downturns. However, the growing popularity of stablecoins has altered the earning opportunities, if only because their rate remains constant.

There is another way to earn passive income from stablecoins. In this case, investors use third-party crypto platforms. Investors are paid interest on deposits as a reward for depositing their coins on lending platforms, which is typically higher than traditional bank rates. Learn more about lending crypto in our article.

Compound Interest In Crypto

The main thing to look for when choosing an instrument for a cryptocurrency “deposit” is APY, which helps to compare returns between platforms or assets.

APY is the annual rate of return on investment, considering the compound interest accumulating or growing with the balance sheet. Compound interest is the sum of the interest earned on the original deposit and the interest earned on that interest.

Typically, investors receive interest on the same cryptocurrency they deposited in. However, there are cases when the interest earned can be paid in another currency (dual-currency investments).

DeFi Passive Income

For the past two years, decentralized finance has thrived. DeFi offers numerous passive income opportunities to investors with any size of investment capital.

DeFi platforms have enabled users to borrow, hold, lend, or trade cryptocurrencies without the traditional bureaucratic procedures associated with financial markets. Many people consider the best DeFi coins a solid investment option because of their popularity.

Decentralized finance (DeFi) is a developing financial technology in the blockchain space based on distributed ledgers, just like cryptocurrencies. The model seeks to eliminate banks’ traditional control over money and financial products and services.

DeFi allows individuals, traders, and companies to perform independent financial transactions using blockchain technology, eliminating the need for an intermediary. This is achieved through peer-to-peer (P2P) networks that use security, connectivity, and advanced software and hardware.

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Building Wealth with Cryptocurrency

admin — Mon, 05 Dec 2022 10:48:00 +0000

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With the onset of crypto winter, token holders are considering new ways to supplement their income. For many, selling cryptocurrency now means going into the red. On the crypto market, there’s an option to ride out the crypto winter with passive income – some of which are similar to interest on deposits and dividends.

Earn Crypto Passive Income

The modern banking system cannot boast of high deposit interest rates. Furthermore, the interest rate is sometimes negative – you pay the bank interest, not the other way.

Despite their high volatility, cryptocurrencies appear to be far more appealing in terms of long-term investment. Periods of depreciation are more than offset by periods of growth, due to its deflationary nature and growing popularity as a store of value.

Let us clarify that not all cryptocurrencies, but primarily bitcoin, have this quality.

On DeFi networks, “staking” and “yield farming” allow you to earn passive income. DeFi is a term for decentralized finance for blockchain-based currencies and smart contracts.

Staking and yield farming are fundamentally the same. They involve investing in one or more cryptocurrencies and collecting interest and commissions from blockchain transactions.

Staking. Cryptocurrency must be stored in an account in order to earn interest and commissions when funds pass through validators, which are blockchain nodes that keep the network running. Stakeholders receive a portion of the commission when validators participate in transaction execution.
Yield farming. This method is slightly more complicated, but not significantly different. Users contribute funds to the liquidity pool, frequently by combining different types of tokens. Rewards are accrued continuously and are typically paid in the form of crypto tokens. Tokens collected can be re-invested in the liquidity pool and added to the farm to earn higher rewards. They can also be withdrawn and exchanged for cash.

Compound Crypto Interest

The annual yield on principal and interest on investments or savings is referred to as the APY. The amount of compound interest applied, which can vary, also influences the calculation of APY.

Compound interest is a type of capital gain (interest) situation in which the income from each period is reinvested. As a result, economic income is generated from both the initial investment and the profits made in each previous period.

The profit earned in the first period is applied to the initial investment, resulting in an increasing profit in each subsequent period. Thus, compound interest produces a multiplier and exponential effect on the initial investment.

DeFi Benefits

Easy access to financial services, particularly for those who are unable to access the current financial system for whatever reason.
A smart contract contains the rules for carrying out business operations. Once activated, the DeFi app can function autonomously with little or no human intervention.
Control of the ecosystem is distributed evenly among all network members.
Transactions are completed quickly and without the use of an intermediary, lowering commission costs.
The source code of applications is available for study, allowing any user to understand the contract’s functionality or identify vulnerabilities.
Anyone can create and use an application. Other products can be combined to create new services.
Unlike the traditional financial sector, there are no controllers or accounts that require complex forms to be filled out.

Crypto Asset Management Companies

Midas.Investments is a CeDeFi custodial investment platform that provides the best market returns across a variety of cryptocurrencies. We want to use the crypto economy to help people achieve financial independence. The site provides trust management of a portfolio of popular digital assets for these purposes.

Midas offers two automated yield portfolios, each with a basket of selected cryptocurrencies that are rebalanced monthly to optimize yield. The Midas token offers 22.2% APY, which is backed by Midas’ income stream and universal utility, isolating it from market volatility.

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Making Passive Income With Crypto

admin — Thu, 01 Dec 2022 06:16:00 +0000

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Many of us associate cryptocurrencies with complicated and risky money-making schemes. Trading, for example, requires extensive market knowledge, financial and technical analysis methods, and prior experience with crypto assets.

In fact, cryptocurrencies can consistently generate passive income. Just like a bank deposit or government bonds. Most importantly, an investor doesn’t need to dive deep into the specifics of the crypto market. The most important thing is to find a strategy that appeals to you and a trustworthy platform on which to invest.

Interest On Your Crypto

So, how can you make your money work for you?

HODL. The method involves buying cryptocurrency at a lower price and then selling it at a higher price. A significant increase in the exchange rate, as well as significant investments, are required for the profit to be tangible. Many Bitcoin investors became wealthy by purchasing multiple coins at the start of development and selling them when the price of one coin reached thousands of dollars.
Mining. A method of generating new coins as a reward for adding new blocks of transactions to the blockchain. To make blocks, you must perform complex calculations that can only be handled by powerful machinery.
Masternodes. This is a blockchain network node that is in charge of processing transactions or performing any special tasks. The masternode’s owner receives passive income for the operations performed. However, in order to launch a masternode at home, you’ll need to make significant financial investments, as well as provide a dedicated IP address and meet other requirements.
Staking. In this case, the user purchases a certain amount of cryptocurrency and keeps it in his account, receiving additional funds on a regular basis as a percentage of the available funds. Staking is a component of the Proof-of-Stake mechanism that many cryptocurrencies use.
Lending. The method is as old as the world itself: you put your savings into circulation, exchange, or directly to other users, and then return them with interest.

DeFi Crypto Investment

DeFi are blockchain-based projects that are based on financial instruments. Their goal is to replace what is in the banking system now and become a worthy alternative that is chosen by millions due to its wide application possibilities. There are projects, for example, that assist people in earning passive income from the cryptocurrencies they have in their wallet.

DeFi Token Farming

Yield farming is widely practiced in DeFi. This is an investment strategy where users (liquidity providers) temporarily provide liquidity to the DeFi protocol in exchange for its tokens.

Yield farming is so named because it’s a highly profitable, albeit risky, investment strategy. You can achieve returns in the tens of thousands of percent with careful portfolio management and a little luck.

Why do DeFi protocols need liquidity at all? DeFi banks — for issuing loans. Decentralized exchanges (DEX) — for exchanging one cryptocurrency for another. Furthermore, all DeFi are interested in easily exchanging their own token for other cryptocurrencies, particularly the most popular ones. This requires the token to be listed on a centralized exchange. It’s long, expensive, and large exchanges have high requirements. Another option is to create liquidity pools on decentralized exchanges (permission isn’t required) and attract liquidity to them, with the reward of issuing their own governance tokens.

DeFi Lending Platforms

DeFi lenders are services that provide secured loans without the use of intermediaries. Instead of banks and brokers, DeFi lending makes use of smart contracts, which are automated and self-executing algorithms that specify all the transaction’s terms, such as amounts, terms, and interest rates.

How it works? A lender who has free crypto money places their funds on a DeFi lending platform.

Funds are locked up with a fixed annual percentage yield (APY) issued to the lender for each day the platform uses these funds.

Borrowers who need extra money for their operations come to the DeFi lending platform and apply for a loan. They specify the required loan amount and term (the latter is optional, but some platforms reduce the amount of collateral for long-term loans).

The platform calculates the collateral required to support the loan.

The borrower provides collateral and receives a loan. They may also need to add funds if the price of collateral falls sharply.

As soon as the borrower no longer needs the loan, he repays the full amount and the calculated interest for the term of the loan. The deposit is returned after 100% loan repayment.

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Passive Income with Cryptocurrency

admin — Thu, 17 Nov 2022 02:01:00 +0000

With the development of the decentralized finance (DeFi) industry, these opportunities for generating significant profits have become wider and more accessible. The real turning point in the game has come with the rise of cryptocurrency centralized exchanges (CEX) and decentralized exchanges (DEX) that are looking to provide customers with a variety of financial products.

It will not be possible to figure it out and choose a win-win option in a couple of hours. You’ll have to spend time, study various strategies, the work of decentralized finance, read forums, be sure to study the projects themselves, read the main DeFi attack vectors that lead to millions of losses. So on the one hand, this is passive income, and on the other hand, it suits investors with an active position in the market.

Crypto Passive Income Strategies

Staking and saving are the two main ways to earn interest on cryptocurrency. Let’s take a look at them.

Earn Interest On Stablecoins

Stablecoins are a class of cryptocurrencies whose price is more stable than non-fiat crypto, such as Bitcoin. The market value of stablecoins is pegged to the value of a “stable” reserve asset, such as the US dollar or gold.

Traders and investors can earn interest with stablecoins by staking. Its essence lies in the fact that the user acquires crypto and simply keeps them in his account, getting a reward.

Blockchains based on the Proof-of-Stake algorithm allow you to earn income by storing existing coins. To do this, you need to keep your computer turned on and your wallet activated. When a new block is created, a wallet is randomly selected to test this action. In other words, the more funds in the wallet, the more likely it is to be selected, and therefore to receive a reward.

Crypto Saving

Saving – in simple words, when you open a bank deposit in dollars, you receive interest in dollars. Here you open a deposit in cryptocurrency and receive interest in this cryptocurrency.

What are the advantages of saving:

We keep money in a coin, so in addition to the interest that we will be charged, we have the opportunity to earn on the very course of the crypto. Of course, you can lose on the course with the same success, but for those people who initially set themselves the goal of holding, for example, BTC with the expectation that the price will be higher, this is an ideal option.
You can withdraw your money with the profit you earned at any time.

Portfolio Management Crypto

It’s important to know that there are various ways to participate in the cryptocurrency markets, as well as ways to accumulate and profit from them.

HODLer: when you invest and accumulate assets with no intention of selling them right away.
Trader: when you speculate on the prices of cryptocurrencies in the short and medium term: you open positions with the intention of making a certain amount of profit, and then sell them back, receiving an asset that you want to accumulate.
Validator: when you are a member of a cryptocurrency network (for example, a miner or a staker) and receive a reward for both confirming a transaction and increasing the network’s stability.

You must first decide how much you are willing to invest before exposing your hard-earned money to the volatility of the cryptocurrency markets. It’s recommended to invest only 10% to 20% of your capital. However, it’s up to you to decide. The less you invest, the less attached you will be to any possible outcome.

How to create a portfolio:

Determine the initial investment size based on your total capital;
Make an investment strategy: passive, active, or both.
Develop a detailed plan, both passive and active.

Before you begin building your cryptocurrency portfolio, you must first understand the cryptocurrency market. More information about you can find in our article “Building your first crypto porfolio

Build Wealth With Crypto

The type of interest rate applied to the rate or loan product is an important factor in maximizing yield. Some of them pay interest based on APY, while others use the APR calculation method.

APR is a simple interest rate calculation that does not take into account complex accruals. APY is based on interest addition. An APY-based investment will give you a higher total return compared to an APR product with exactly the same numeric interest rate.

If You still have an issues look our guide Earning Passive Income with Crypto

Earn APY On Crypto

Cryptocurrency investors can earn APY by staking, storing them in savings accounts, or providing liquidity to liquidity pools via yield farming. You can start earning APY on your crypto fast with crypto exchanges, wallets and DeFi.

The 7-day APY rate is the annual rate of return using 7-day returns. It’s calculated by dividing the net price difference between 7 days ago and today by the annual percentage.

The following is the formula for calculating the 7-day APY rate:

APY = (X − Y − Z) ÷ Y × 365/7

Where:

X = price at the end of the 7-day period

Y = price at the beginning of the 7-day period

Z = any commission per week

This calculation aids investors in understanding weekly yields or return on yields.

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Crypto Interest Earning

admin — Tue, 15 Nov 2022 02:06:00 +0000

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A cryptocurrency interest account is a service provided by the DeFi platform that allows you to earn interest on digital assets that you have deposited and agreed to lend in exchange for a refund.

Given the volatility of the crypto industry, the key to getting the best crypto interest rates is to keep an eye on the market and find the best deals as they become available. Here are some tips for you:

Invest in stablecoins. The leading stablecoins — USDT, USDC, and BUSD.
Stick to one platform. To get a higher interest rate in the long run, it is better to choose a reliable platform where you will place and store your cryptocurrencies, instead of moving your assets.
Simple Interest vs. Compound Interest. The key difference is that APR is a simple interest rate calculation that does not account for complex accrual. On the other hand, APY is based on interest addition. All other things being equal, an APY-based investment will give you a higher total return than an APR product with exactly the same numeric interest rate. More information about you can find in our article “What is the difference between APR, APY and MIDAS Boost“.

Crypto High Yield Savings

Crypto platforms are constantly developing new alternatives to traditional financial products. In addition to trading and staking, “savings accounts” in crypto are gradually becoming more widespread. The essence is simple: if you hold a cryptocurrency in anticipation of a long-term growth in the rate, you can get additional passive income by putting it on a similar deposit. In turn, it’s divided into locked savings and flexible savings.

Locked Savings

Funds are placed for a fixed period of 7 to 90 days. The interest rate in this case is higher than in the flexible savings option. In addition, the rate is fixed, so you know how much you will earn in the chosen crypto: the total amount in dollars will, of course, be affected by fluctuations in the asset’s price.

Flexible Savings

The assets in the flexible savings account can be withdrawn to the main trading balance without fine at any time. The list of supported cryptocurrencies is much longer here than it is for the fixed rate option. But the yield is floating and changes on a daily basis: in a week, an asset can bring you 5%, or maybe 0.5%. Obviously, if the crypto exchange rate falls sharply against the dollar, the real profitability (even 5% per week) may turn out to be negative.

Earn Money Lending Crypto

Lending is a kind of leasing digital assets. In other words, the process can be described as lending with cryptocurrencies at a certain percentage.

Lending is one of the ways to make the cryptocurrency “work”. This is an opportunity to get real money, without having to sell your coins, but by lending them to someone. Earnings on lending pages are considered high-risk, but in a good scenario, a promising high income can fully compensate for the degree of risk.

Cryptocurrency Investment Platform

As the world of decentralized finance (DeFi) evolves, more and more platforms offer interest-bearing accounts for cryptocurrencies. Crypto interest accounts enable you to stake your coins for a period of time to earn interest similar to traditional savings accounts. The difference is that crypto interest rates can be well over 10% per year. Let’s take a look at Midas.Investments platform.

If You still have an issues look our guide How To Earn Interest On Crypto

Midas.Investments

Midas.Investments is a custodial “CeDeFi” investment platform offering market-leading yields on an array of cryptocurrencies, including BTC, ETH, and USDC. Midas’ mission is to bridge the ease of CeFi with the transparency of DeFi strategies, fueled by algorithmic infrastructures and 24/7 portfolio monitoring. These strategies allow Midas to offer premium yields while hedging against downside risk, thereby allowing investors to build sustainable, passive income. In the four years since our launch, we’ve attracted more than 10,000 active investors and over $300 million in assets under management.

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Crypto asset management for novice investors

admin — Thu, 10 Nov 2022 10:00:13 +0000

Asset management is the process of monitoring, purchasing, and selling investments in order to maximize portfolio diversification, balance risk, and/or increase the return on investment. The process of applying the same exercise to digital assets based on blockchain technology is known as crypto asset management.

Asset management tools capable of handling various digital assets have become essential for today’s investors, as well as the financial professionals who assist them.

Passive Income From Crypto

One way to make money in the blockchain industry is to trade or invest in projects. However, you will need to thoroughly research the subject of your investment and spend a significant amount of time on it, which doesn’t guarantee a reliable source of income.

Even the best investors can suffer long periods of continuous losses, and the only way to stay afloat is to have alternative sources to make passive income with crypto.

Crypto Capital Management

Crypto capital management is the process of adjusting the balance of positions to reduce risk and increase the value of trading accounts. This strategy limits the amount of equity in a single trade to 5% of the total account value. The indicator can be less, but not more. As the account value changes, so does the dollar value of 5%. The 5% cap, on the other hand, ensures that you don’t put your entire account at risk as a result of a single position.

For example, suppose you have 10,000 USDT in your futures wallet. In this case, the risk per trade should be between $100 and $200 USDT. If something goes wrong during the process, you will only lose 1-2% of the account’s capital.

Risk management entails using positions of a reasonable size, being able to use a stop loss, and considering the risk-to-reward ratio. A solid crypto capital management strategy will assist you in developing a worry-free portfolio. More information about the risks you can find in our article “A Complete Guide to DeFi Risks and How to Manage Them”.

Rebalancing Crypto Portfolio

To mitigate the risks associated with asset allocation, cryptocurrency traders are now turning to portfolio rebalancing.

Rebalancing is the process of returning your portfolio’s cryptocurrencies to their original state. You should understand that rebalancing is a tool, not a goal. Cryptocurrency rebalancing allows investors to increase their current profits by taking advantage of rapid price volatility.

Let’s say you have 30% Ethereum (ETH) and 70% Bitcoin (BTC) in your portfolio. Ethereum’s weight increased by up to 50% between January 2020 and March 2020. To reduce risk, sell 20% Ethereum and buy 20% Bitcoin (BTC) to restore the portfolio’s original asset allocation of 30% Ethereum and 70% Bitcoin.

When rebalancing a portfolio, investors use the portfolio’s previous asset ratio to maintain the desired asset allocation structure. The goal of employing this strategy is to establish a risk management structure that ensures the success or failure of one or two assets is not dependent on a single investment or market.

Investing in Decentralized Finance

Decentralized finance, or DeFi for short, is a network of financial applications built on blockchain networks. DeFi is also used to provide transparent financial services that operate without the control of any central authority. Anyone who owns a cryptocurrency can use DeFi. Furthermore, the majority of DeFi ecosystems have their own coin that powers their own blockchain network.

Decentralized finance allows for the creation of open, public, and fair markets that are accessible to anyone with an internet connection. Transactions on them are transparent and are confirmed by other network users. In addition, the data on the blockchain is tamper-proof, secure and verifiable. Users have complete control over their assets and interact with the DeFi ecosystem via P2P and decentralized applications.

Benefits of DeFi

Flexibility and speed

You can trade and transfer your assets wherever you want without worrying about bank transfers or paying bank fees. Furthermore, transactions are carried out in real time, and interest rates are updated several times per minute.

Publicly available

One of the most significant benefits of DeFi is easy access to financial services. Anyone with a crypto wallet and internet access can use DeFi services.

Transparency

DeFi data is hack-proof, secure, and verifiable thanks to blockchain technology. Every transaction on the blockchain is viewable and verifiable.

Full control over assets

DeFi applications don’t require intermediaries or arbitrators. Users can fully control their funds within the ecosystem by using non-custodial cryptocurrency wallets or a smart contract-based escrow service. The escrow service stores the tokens involved in the transaction until its conditions are met.

Invest In Cryptocurrency Platform

Cryptocurrency funds are similar to traditional exchange-traded funds that are linked to a specific sector of the economy, except that the link is to the digital money area.

The selection of a crypto fund begins with an examination of its market reputation as well as an analysis of its work history. One of the hallmarks of fraudulent funds is the promise to investors of guaranteed and high returns.

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Ethereum vs. Fantom: Everything You Need to Know

admin — Wed, 26 Oct 2022 13:22:47 +0000

Ethereum was birthed as the first programmable blockchain to improve on Bitcoin’s deficiencies. The network was also the first to consider the full potential of blockchain technology beyond just enabling the secure virtual payment method, giving birth to an entire financial ecosystem that runs without the need for middlemen or third parties.

While other new players have emerged to refine this invention over the years, Ethereum has still maintained its top position. The network is currently by far the largest in terms of total value locked (TVL), daily transactions, number of users, and every other metric.

In a bid to further benefit from the growing adoption and development of the Ethereum ecosystem, which maintains the lion’s share of the DeFi industry, the MIDAS token will migrate from the Fantom network to the Ethereum network.

The migration will take place in early November and will open up new opportunities for the continued development of MIDAS tokens in the DeFi ecosystem, further expanding on its utility. It will also make the MIDAS token available for the buzzing Ethereum community.

What is Ethereum?

Ethereum is a community-driven blockchain platform forming a peer-to-peer network that executes and authenticates application codes, known as smart contracts. Its native token, Ether (ETH), and many other decentralized apps (dApps) power this technology. ETH is currently the second largest digital asset by market cap behind Bitcoin.

Vitalik Buterin, the creator of the Ethereum blockchain, and his co-founders described the network in 2013 in a white paper. They secured funding in a public sale in 2014. The platform was officially launched on July 30, 2015, and has undergone several upgrades, the latest being “The Merge”. This phase which occurred last month successfully transitioned the Ethereum network from proof-of-work to proof-of-stake.

Since its creation in July 2015, Ethereum has become the most robust smart contract platform. Statistics reveal that in Q1 2022, developers deployed over 1.45 million smart contracts and 2700 dApps on its network. This value is almost a 25% increase of the smart contracts created in the last quarter of 2021, which was 1.16 million.

Ethereum’s decentralized, scalable and programmable nature has endeared it to many developers. This development has encouraged many technopreneurs to build life-changing inventions using Web3. With 2,980 developers in 2020 and 3,920 in 2021, Ethereum has consistently attracted 20-25% of this pool. This makes it among the fastest-growing blockchains today.

Recent data from onchain aggregator shows that Ethereum still dominates the dev community despite the market rout. As of October 2, the smart contracts platform recorded about 2000 active developers. This number consists of those in the core network and the sub-ecosystem.

What is Fantom?

Fantom is a DAG-based (Direct Acyclic Graph) smart contract blockchain protocol designed with a combination of high throughput and cheaper transaction fees. These modifications aim to tackle the shortfalls of Ethereum.

This open-source network is powered by the FTM token and designed to house digital assets and dApps. DAG data is a modeling and structuring innovation with networks made using vertices and edges. This architecture is different from most blockchains which consist of blocks.

For context, regular blockchains act like interconnected chains, while DAGs resemble graphs. Founded by South Korean developer Dr. Ahn Byung Ik in 2018, Fantom Foundation has established itself as one of the most popular platforms for DeFi (Decentralized Finance).

Ethereum Vs. Fantom

Both Ethereum and Fantom are smart contract platforms for decentralized applications (DApps). However, Ethereum’s first-mover advantage has given the network an advantage over competitors. More specifically, the Ethereum network is by far the largest network in terms of total value locked (TVL), daily transactions, number of users, and every other metric.

Total value locked (TVL)

The DeFi industry was not exempt from the current market carnage as its major players seem to have bottomed out. Data show that the volume of the top six blockchains maintained a flatline from March 2021 till October 2022. Ethereum’s TVL also plateaued during this time.

The total volume for the smart contract giant struggled slightly above the $31.6 Billion mark. Meanwhile, Fantom’s volume floats above $500 million billion after lurching significantly at the beginning of October 2021.

Daily transaction

During the 2017 ICO mania, which was accompanied by the crypto kitties’ frenzy, Ethereum’s daily transactions surpassed 1.25 million. Meanwhile, the number of new addresses peaked at 346,000.

Over the next four years, the total transaction count increased to 1.7 million. On October 21, 2022, this number fell to 1.117 million complete transactions following the market decline.

Fantom followed a different trend. The total number of transactions spiked to 1.8 million users – over a hundred transactions more than Ethereum. The high gas fees on the ETH network may have heightened the desperation for alternatives. As of writing time, Fantom’s total transactions stood above 753,000.

Daily Active Users

Courtesy of the decentralized finance ecosystem built on Ethereum, the network has the highest number of daily active users. These users interact with Ethereum for various reasons, ranging from trading and swapping to providing liquidity and lending and borrowing.

Nevertheless, Ethereum currently has around 500,000 daily active users. In comparison, the Fantom network has approximately 60,000 daily active users. This alone shows that there is considerably more opportunity for growth within the Ethereum network compared to competitors like Fantom.

NFT sales volume

The sales of digital collectibles seemed to buck the market trend for a while on the Ethereum network. The smart contract ecosystem continued to enjoy decent liquidity as the rest of the market plunged. NFT sales volume on ETH platform peaked at $6.28 billion on April 30, 2021, having almost 28,000 unique buyers. Since then, sales have plummeted drastically to $8.64 million.

On the other hand, the Fantom blockchain did not enjoy the same liquidity. After abrupt spikes, which occurred in Q4 2021. The network records trading activities from transactions. It appears the Fantom network is yet to have a decent NFT market.

Dapps, DEXes, Bridges

Ethereum also leads the way in terms of the number of Dapps, DEXes, and bridges available on the network. As of now, there are more than 3,500 Dapps, over 90 DEXes, and 25 bridges. By comparison, there are only 300 Dapps, 40 DEXes, and 20 bridges on the Fantom network.

The post Ethereum vs. Fantom: Everything You Need to Know appeared first on Midas.Investments. Crypto investment company blog..

GMX (GLP): Overview

admin — Mon, 03 Oct 2022 13:14:19 +0000

Introduction

Traders can profit from the price fluctuation of crypto assets by betting either on the progression or regression of tokens. There are different means that allow traders to take a position in regard to an asset, with the most common tools being spot trading and futures trading.

Spot trading is the most straightforward tool, which refers to the purchase or sale of crypto tokens. In spot trading, an investor buys the actual token and holds it for future appreciation. One important aspect of this method is that all trades are executed at the current market rate, also called the spot price.

Another more complicated method for getting exposure to crypto assets is futures trading, which is different from spot trading in several ways. For one, futures are contracts that allow investors to buy or sell an asset at a predetermined price at a future date.

What Are Futures and Perpetual Contracts?

As the name implies, a future contract is an agreement between two parties to buy or sell an asset at an agreed-upon price and time in the future. In a futures contract, traders don’t have to hold the actual asset. Instead, they bet on its future performance asset using another asset.

Traders can either take long or short positions in future contracts. A long position is when investors buy and hold assets because they expect them to rise in value. In other words, a long position implies you are bullish on an asset. In contrast, a short position is a bet on the depreciation of an asset.

The trader who has taken a long position will pocket a benefit when the asset’s value appreciates. Likewise, a short position holder will profit from the asset’s price depreciations. On the other hand, long position holders bear losses when prices drop and short position holders take a loss when prices increase.

It is worth noting that future traders usually use leverage to potentially multiply their profit. Leveraging allows traders to take a position with amounts higher than their collateral. This acts as a double-edged sword, enlarging profits or losses by the same magnitude.

One special form of futures contracts is a perpetual contract. Typically, a futures contract has an expiry date, beyond which the contract is not valid. However, a perpetual contract does not have an expiry date. This means that a perpetual contract will remain valid for as long as traders leave it open and maintain it.

The no expiry date in perpetual contract trading makes it difficult for traders to predict a reasonable settlement price and cost of funding. That is why they use a funding mechanism. It works by sending periodic payments between long and short traders, which also helps the price of the perpetual contract to remain anchored to the spot price.

In traditional finance, there are various platforms that support futures trading and perpetual contract trading. However, in the nascent decentralized finance (DeFi) ecosystem, there are significantly fewer such platforms, with one of them being GMX.

What is GMX?

GMX is a decentralized exchange (DEX) with a focus on perpetual futures. The platform is currently live on both the Arbitrum and Avalanche blockchains and supports low swap fees and zero price impact trades. It allows users to leverage up to 30x on popular cryptocurrencies like Bitcoin, Ethereum, Chainlink, Uniswap, and Avalanche.

The protocol was formerly known as Gambit and was based on the Binance Smart Chain (BSC) blockchain. It then went live on Arbitrum in September 2021 and expanded to Avalanche at the beginning of 2022.

GMX also offers decentralized spot trading, allowing investors to seamlessly swap and trade different crypto assets using their wallets. However, the protocol’s most popular product is its decentralized perpetual contract trading platform.

The protocol utilizes a unique multi-asset liquidity pool that generates rewards from trading fees, leverage trading fees like spreads, funding fees, and liquidations, and asset rebalancing to support trades. Notably, these rewards are channeled back to liquidity providers.

How Does GMX Work?

While there are few other decentralized perpetual contract trading platforms too, GMX stands out in several ways. Most notably, it employs a decentralized, multi-purpose liquidity pool called the GLP pool. The pool allows for spot trading and perpetual contract trading.

Community users, who are called liquidity providers, contribute assets to the GLP pool. The pool uses an Automated Market Maker (AMM) to facilitate the decentralized trading of assets. The leverage trading algorithm also uses the GLP pool to offer loans to traders.

Users who lock assets in the GLP pool receive GLP tokens in return. The tokens represent users’ stakes in the GLP pool. Furthermore, the token offers numerous benefits to holders, including high APR rates for those who lock their GLP tokens.

As of now, GMX has over $650 million in Assets Under Management (AUM). The protocol’s GLP pool also has over $364 million worth of assets on the Avalanche and Arbitrum networks.

What Are GMX and GLP Tokens?

GMX employs a dual token system that includes the GMX and GLP tokens, both of which act as the native tokens of the GMX ecosystem. GMX is the governance and utility token of the GMX ecosystem, while GLP is a tokenized version of assets locked on the exchange.

Similar to other governance tokens, GMX allows holders to create or vote on proposals. GMX holders can also stake their tokens and earn passive income. As of now, the platform offers over 10% APR for those who stake GMX tokens on Arbitrum and Avalanche. 30% of the fees generated on the platform are used to reward stakers.

The GMX token has a maximum supply of 13,250,000. Approximately 7.5% of the supply was distributed to presale participants, and 15% is allocated to the Floor Price Fund. Another 15% of the GMX supply has been added to the GLP pool, and over 45% of the GMX token supply is expected to be absorbed by old Gambit and XVIX holders migrating their tokens to GMX.

Meanwhile, GLP is a tokenized version of assets locked on the GMX exchange. When users lock their assets, they can mint GLP tokens. Notably, GLP tokens are not tradable and can only be used to redeem the assets locked during the minting process.

GLP holders can also earn passive income on their tokens by staking. As of now, the platform offers around 25% interest on Avalanche and 31% interest on Arbitrum as staking rewards. GLP holders also receive esGMX rewards and the remaining 70% of the fees generated by the GMX exchange.

Midas.Investments Uses GMX Protocol to Offer Market-Leading Rewards in CeDeFi Strategies

Midas.Investments uses the GMX protocol in a CeDeFi strategy to offer market-leading rewards. Dubbed “GLP” – Index Liquidity Provision on GMX, the strategy generates 20% to 30% APR in ETH by providing blue-chip liquidity for leveraged traders on GMX.

This strategy offers a sustainable ETH yield of around 30% by allowing users to gain a soft long position on ETH (~0.25x) and BTC (~0.25x). Furthermore, investors will be eligible for ETH-denominated yield derived from activities performed by traders on the GMX exchange.

GLP’s source of yield is %100 sustainable. Rewards come from two sources:

Fees paid by traders (~20% of the yield comes from this source) for: swapping assets using GLP liquidity, opening and closing their leveraged positions on GMX, liquidations on GMX.
Traders’ losses: When traders lose money by misjudging the market, their net losses are GLP’s net profits. GLP is effectively the counterparty for traders; this yield source accounts for around 85% of the GLP yield

Midas.Investments is a custodial CeDeFi platform seeking to bridge the gap between CeFi and DeFi, combining the former’s reliability with the latter’s high profitability. The platform implements a strict risk management policy and mandatory audits of all products in a bid to enhance security and transparency standards while reducing the possibility of fraud.

The post GMX (GLP): Overview appeared first on Midas.Investments. Crypto investment company blog..

Price Impact introduced to Midas swaps

admin — Wed, 14 Sep 2022 13:16:21 +0000

Blog — Articles

We are glad to present the AMM Price Impact function on the Midas platform. The first asset to undergo this update is MIDAS token. What does it mean?

Automated market-making (AMM) algorithms are used on decentralized exchanges to calculate the price impact on an order. The algorithm provides liquidity and depth to open markets providing investors with the flexibility and ease of entering and exiting positions of almost any size.

Every trade on decentralized exchanges has a degree of price impact, causing slippage to the market. On tokens that have significant exposure on DEXes (in terms of overall market liquidity in comparison to CEXes), Midas will mirror these market conditions on our platform Swap feature. Doing so will allow Midas to reduce swap fees on 95%+ of swap trades on certain pairs.

How is price impact calculated?

At its core and in its simplified form, we utilize AMM calculations shown below:

x * y = constant product formula (k)

where x and y represent the total sum of MIDAS across LPs and the total USD value of paired assets across LPs.

The above formula allows us to consider liquidity across all available LPs to provide our users with the optimal swap conditions for their exchange and calculates for us the amount of x and y that will be held in an LP after the given trade has been made.

With the necessary information, we calculate in live time the impact a trade would make to the LP and use this data to correlate the price offered to our users based on the order value/size being processed.

(2*sqrt(k)/k + 1) – 1

where k is the percentage price difference.

Finally, the fixed routing and spread fee are deducted from this price calculation to display live and accurate price impact calculations to users.

Why does this make Midas swaps better than using DEXes?

Combined liquidity. We consider liquidity across all LPs to provide advantageous conditions for investors wishing to trade. By combining this liquidity, users will experience less trade slippage in comparison to utilizing dexes directly.
Easier to manage UI. Our intuitive UI allows investors to shift assets quickly and hassle-free in comparison to utilizing DEXes.
Lower fees. Through utilization of batch processing, we are able to process trades with fewer fees and pass this cost optimization across to our investors resulting in less gas and slippage than by processing trades directly to DEXes.

As a result of these benefits, investors will optimize returns from trading and processing their investments via Midas.

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