May 2nd , I believe that the entire crypto market is still fresh in the memory of Bitcoin’s roller coaster performance last year. After a year of ups and downs, the cryptocurrency market today seems to be teetering on the brink of a bear market. According to the latest data, the price of BTC fell below $38,000, which once again sparked more and more voices about the “bull and bear” battle. Investors also seem to have lost their way. Should they stay in this market and let go? Fighting should be decisively withdrawn to reduce losses, which makes it difficult for many people to decide.
For years, cryptocurrency proponents have believed that digital currency and blockchain technology can change the world. However, as the market cycles continue to cycle, new and old projects ebb and flow, and those projects that promise to be applied to the “real world” never live up to expectations. While most cryptocurrencies start out promising to solve real-world problems, in the end only a few coins achieve this, while others are speculative vehicles at best.
However, investors should not be discouraged. Even if the bull market in the cryptocurrency market has come to an end, it does not mean that investors must stop investing. As long as you use the right approach to investing in cryptocurrencies, you can also make gains during bear markets. This article provides investors with three profit models as investment advice.
The first monetization model is the simplest and is one of the oldest use cases of money in finance – lending. Since the decentralized finance (DeFi) industry took off in 2020, the opportunities for cryptocurrency holders to earn rewards by lending their tokens have increased significantly. Some high-quality DeFi protocols like Aave, Maker, and Compound provide investors with desirable returns through stablecoins, while those niche protocols usually offer higher returns in order to attract liquidity.
More recently, crypto lending has also extended to traditional finance. This is especially true for the real estate industry, where many platforms have launched cryptocurrency-based staking operations. For example, Vesta Equity, a real estate investment company, and USDC.homes, a newly established encrypted home loan company, provide cryptocurrency holders with a pledge business. Holders can obtain loans by pledging digital assets, and at the same time, they can also lend digital assets to homebuyers for long-term benefits.
2. Stablecoin Mining
The second mode that can ensure returns is stablecoin mining. The cryptocurrency market has a reputation for high volatility and high risk, and earning returns through stablecoins is a safer way to grow your portfolio. Because investing in stablecoins does not have the same uncertain downside risk as investing in Bitcoin or other alternative tokens.
In addition, whether in a bull market or a bear market, DeFi protocols need liquidity to function properly, and centralized exchanges and decentralized exchanges can help the market gradually mature and ensure sufficient liquidity by integrating stablecoins.
At present, the decentralized trading platforms Curve Finance, Beefy Finance and Trader Joe can provide investors with considerable yields through stable currency liquidity pools, and some annual interest rates are even as high as 20%.
3. Provide lossless Token
The last way to make money with cryptocurrencies is to participate in the operation of the entire ecosystem by providing lossless tokens.
For example, parachain auctions on the Polkadot and Kusama networks are one use case for offering lossless tokens. At the launch of this type of agreement, investors interested in the project can lock their own DOT (Polkadot Token) or KSM (Kusama Token) as collateral in the smart contract for a specified period of time, as a guarantee for the project a kind of support. Project backers, on the other hand, will receive native tokens of the newly released protocol in exchange. After the specified lock-up period ends, all proceeds from staking tokens are returned to project backers, meaning they can not only get their assets back intact, but also add new assets to their portfolios .
Coincidentally, Lockdrop is also an example of providing lossless tokens, which have been applied in some recently released DeFi protocols. In fact, Lockdrop and Airdrop (airdrops) are very similar in that neither technically helps a project raise funds, but rather requires a certain level of commitment from token holders about how the tokens will be used in the future. The difference is that an airdrop simply distributes tokens to users who join the project, while a lock-drop requires users interested in the project to commit to locking up a certain amount of liquidity so that they can take advantage of the project’s initial launch.
It is worth mentioning that some DeFi protocols also include an innovative liquidity “Bootstrapping” phase when they are released, in which participants can earn more rewards by providing liquidity pool pairs. When the tokens of liquidity providers are locked, they will receive a one-time lock-up reward, and for these rewards, liquidity providers can choose to hold, trade, or continue to provide liquidity. In addition, liquidity providers can also obtain transaction fees and other rewards through the liquidity pool, which greatly reduces the opportunity cost of providing liquidity. Finally, when the agreed lock-up period ends, users are free to release liquidity and dispose of their assets freely.
Offering lossless tokens gives long-term holders of those cryptocurrencies the opportunity to earn tokens through the new protocol, earn yields, and be rewarded with the tokens they want to hold.
Of course, the above-mentioned suggestions do not represent any investment views. There is no investment or trading behavior in the world that is not linked to risks. Investors must remember to make their own assessments before making a final decision. Grasp the battle and don’t do anything unprepared, so that you can win the crypto bull market or bear market.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/the-crypto-bear-market-is-coming-again-but-here-are-three-win-win-models/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.