I want DeFi to go viral....
Although I have no idea how to write an article that more than 100 people will read....
And I have no idea how to make a video highlighting the combination of words 'You Guys' 'Amazing' 'Smash' and 'Algorithm'.... but...
I can write articles that have a wealthy amount of information and definitely love sharing them. Sharing is caring and the information on offer here is only going to make you think and act more on your wealth creation journey. I want everyday people to see these articles just so the awareness continues to increase. The more awareness we have, the more popular DeFi becomes and more power we gain over money as a tool for our own wealth creation.
I want to help the ants out there to stop letting their hard earned money do nothing for them, sitting in a legacy bank account.
The 4 things that have gained my utmost attention in the DeFi space are lending, compound interest, staking and the return multiplier effect. Here's a more thorough look into why they should be on your radar.
-Collateralised Lending-
A collateralized loan is made possible via a held asset with a liquid-able value. Like equity in a house. You can borrow up to a certain value with no down payment because the asset can be sold for an amount to cover the loan. You have the ability to make money from the collateral you have via investments. This is called leverage... Robert Kiyosaki calls the kind of debt associated with leverage Good Debt.
If you're already in the crypto market, or if you're a retail investor (small cap, personal investor that does not benefit a corporation) with a couple bitcoin, using this leverage at this specific time in bitcoins cycle may be of interest, but perhaps just not on your radar. Huge amounts of leverage can be used to expand wealth with land owners, companies and corp's utilizing this feature at opportune times as they have large amounts of quantifiable liquid-able assets. Ever wondered why it's easier for rich people to stay rich? This is one of the ways how. Leverage grants you access to money that you can use to expand on any financial portfolio. Now it is possible to take advantage of this with bitcoin using DeFi platforms, enabling a wealth creation system to all and not just the wealthy.
Why would you want to get a loan in the first place? Pick any reason you'd normally go to a bank for: a car, a bike, an engagement ring, a consolidation loan.... but...maybe, your're like me and want to utilize leverage to buy more bitcoin in this markets bottom end. A loan to risk a bet on an asset class may sound crazy to some people, but given the possible future outcome, I'd be more crazy to give up the opportunity.
A ratio is used to determine how much you can borrow with your coins as collateral, called an LTV - Loan to Value. For example bitcoin will provide 50%, Xrp 40%, Stablecoins 90% (rates taken from Nexo.io) of your deposit value can be borrowed. You will usually find a native token attached to the platform at hand which, if held, can be used to pay for lower rate on the interest generated on the loan, reducing the cost of the loan dramatically. When you pay for the loan's interest with the native token, let's say Nexo token, the interest you generate on the loan comes down to 5.9%, which is 2.1% less than what you receive from the USDT account...not very appealing I know, but, this isn't what we're focusing and even still....it's a net positive.
There's no way I'll save the potential level of profits I stand to make by using legacy bank accounts and if we don't try to explore multiple routes of income, then we'll be working and paying taxes until we're dead. By using leverage and buying some of this bear cycles's lowest prices to date, it is in my personal opinion that it would yield some amazing outcomes.
So to wrap that up, you can borrow a loan against an appreciating asset class, use it for any means necessary, only ever need pay for the low interest incurred and pay it back with a possible future, net-positive, yield.
Win, win right?
Don't worry it gets better.
-Compound Interest
On participating platforms, while you wait for your coins to appreciate in value, you can also reap the benefits of compound interest. As soon as you have a token in a compound wallet such as Celsius, it will automatically start accumulating compounding interest paid out, weekly. You can also choose whether to be paid in like-interest (paid in the coin you're holding) or in the native token. This token gives you an increased yield on all coins you earn on and discounts on loans.
Some platforms will also have their own special offers and loyalty rewards which give you good reason to want to "bank" with them. Crypto.com has a Visa style debit card that you can use to pay for anything and in return receive a percentile of your spend back in bitcoin. Similar to Flybuys or Frequent Flyers, except the yield is in btc/bitcoin instead of points.
The interest rates offered on the held coins will far exceed the performance of any bank you use. Celsius, as mentioned above, offering up to an extra 35% when you accept interest paid out in their native cel token whilst holding a portfolio of more than 15% in cel. Most stablecoins on these platforms will be offered a compound interest yield at a standard now of 8 - 10%, that's where this space is at in 2020, competition has sparked innovation for better ideas and smarter systems, hence, generating much more enticing products for retail investors and new generational savers alike.
Once your coins are on these platforms gaining interest you may want to start getting into staking.
-Staking-
The process of locking your held coins to an exchange or wallet and opting them up to a 'pool' to support operations of a blockchain network. This mostly relies on users participating in blockchain activities via another crypto wallet. In simpler terms, you can stake coins held on a platform to produce yields on it's utility to others. We are loaning out our crypto.
The benefits are that you can earn a bigger yield by providing a portion of currency to invest with that bigger pool of contributors. Similar to a syndicate for the lottery.
There are different staking opportunities on different platforms to take part in such as one of my favorites, Crypto.com and their CRO token. There are amazing benefits by staking and holding a certain amount of these tokens as the rewards they offer are going to not only help you save, but also help you earn.
The Crypto.com exchange offers a staking reward of 20% on CRO tokens but also has a soft staking wallet reward of 3%.
23% interest on an appreciating product is incredible and any of these kinds systems that are trustworthy should be given the time of day. Combining this with other earnings can multiply your returns pretty fast...but more on this when I go over the specifics of each platform.
-Multiplier Effect-
I gave an example on this in Crypto Boom #2, but I want to share it again a little differently here.
You maybe familiar with what this is and skip ahead if you do, but if not...then a multiplier effect refers to a multiplied final yield due to a repetitive injection of value. You can see this in a variety of things, let's take games for example.
If you've ever played a game where with each piece of equipment or upgraded skill attained gives you a percentage of extra stats, you'll be familiar with multiplier effects.
Or for every frag you make, the multiplying factor of the points accrued increases.
For each addition of value made to a pool, both the pool value and multiplier increase. Here's some quick math....
If an apple is worth 100 points, then 10 would be worth 1000.
If you are given 10 apples over a time frame where with each apple given, a multiplying effect is applied, the outcome may be as follows:
You have an apple worth 100 points.
1 apple/100 points
You receive another apple of 100 points giving you 200 points.
2 apples/200 points
You now have 2 apples and receive a x2 effect going forward....
You are given another apple and receive 200 points. Now you have 3 apples, worth 400 points.
3 apples/400 points
3x multiplier going forward....
You are given another apple worth 300 points because you hold 3 apples already, making your total 700.
4 apples/700 points
4x multiplier going forward...
One more apple gives you 400 points in that you have 4 apples already.
5 apples/1100 points
Now you have 5 apples worth more value than the base worth of 10 apples.
Utilizing multiplier systems together with interest-generating platforms, you can make some healthy returns on your assets.
If you hold crypto in an account that earns compound interest, you are already within a multiplier effect system. For each injection of interest that hits your account, the new total is what determines the next injection of interest. Although 8% interest rates over a year period is painstakingly long to make big gains, it's still far better than all banks so I want to arm you with some tips to maximize on these multipliers.
I use these platforms like a savings account in that I don't really expect to pay for anything with any of my tokenized currency...yet. For those that are worried about getting it back into their bank account and native dollar, this is entirely possible and becoming easier to do in order to combat the status quo around crypto which inherently strengthens the utility, functionality and popularity of the space. I wrote this to spread how you can utilize this technology as a savings and accumulation system. We have the halving next month and going off historic chart data and new predictions, 9 months after the halving will most likely be the cycle's all time high's. So earning, staking and stacking these coins until then should be number one priority.
However, it's up to you to get that same level of understanding before you dedicate any of your hard earned cash. These blogs are a great place to start and you're on the right path.
So now, let's go over some of the stand out platforms that should be considered.
-NEXO-
I started using nexo because they offered a fantastic compounded rate on their stablecoins which includes usdt, gbp, eur, pax and a few others.
The interest yielded is a healthy 8.6% which is paid daily in usdt and there is a transaction tab in the app where you can see how much interest per day is being accrued. nexo's loan features are a bargain when you pay for the interest with the nexo token, bringing the rate down to just 5.9%. If you can offset the cost of the loan with a stablecoin yield then the loan becomes cheaper and can even be free. If the price of bitcoin goes up, you still have the bitcoin held as collateral to rise in value which might even end up paying the loan off itself.
The initial $700 that I funded my account with is generating a whopping 16c per day! Pretty amazing returns right? I know I know, but here's the thing....this was the first platform I found and started testing, Since then I have found incredible return percentages and plan to use a much large pool of coins to earn from.
In any case though
16 x 30 days equals about $4.80 monthly
This x 365 gives me a yield of $58.40 yearly.
But as the total is compounded daily my total has become $59.14
Now compound interest being paid at a rate of 16 cents per day isn't going to really matter so just keep this idea in mind as I'll retouch with more examples in a little bit.
Albert Einstein famously referred to compound interest as "the eighth wonder of the world."
-Pro's-
8.6% compounding yield on supported stablecoins.
5.9% interest loans (after the interest is paid in nexo tokens).
The nexo token earns dividends each year based on 30% of company profits.
Future plans to have all their supported coins generate a yield.
-Cons-
Crypto does not produce a yield yet.
No recent updates.
Competition has since gained better features.
-BlockFi-
I was attracted to BlockFi initially as it was the first platform I liked which, coins other than stablecoins, produced a yield of reasonable size. But it also offered compound interest on bitcoin.
The offering on btc was a whopping 8% at the time but since has dropped to 6%, is compounded, paid out monthly in btc...not usdt. Hang on a sec, if I can have compounding interest paid out monthly in an appreciating asset class, doesn't that mean that each interest payment received would grow in value as the base price does? Yes, yes it does and yes they would.
If you have been receiving payouts each month in btc and it's price doubles, the principle + all interest received is doubled. Just remember that if you can be paid in like interest, that yield is susceptible to all future price fluctuation; you have something of value in motion.
BlockFi is a serious contender for DeFi due to it's product line producing some nice yields, rewarding Bitcoin, Etherium, Lightcoin and Stablecoins. Holding all your Bitcoin here is a great way to kick start a multiplier effect. To really oil the machine though we will end up using profits made from other accounts as free injections to the compounding system.
If you'd like to earn 10% when referring a friend and do the same for me, click my affiliate link...
https://blockfi.com/?ref=c73caadf
-Pros-
Compound interest on btc and eth
Great wallet for using as base multiplier
Great customer support
-Cons-
Long wait times when transferring coins out
Only one free withdrawal per month
Crypto.com
First of all, there are 2 entities to talk about here. The Crypto.com app and the Crypto.com Exchange which is website only. They only recently launched their exchange site and alongside having a fantastic and easy to use app, the website is much the same
I became attracted to this app because of the high interest yield of 16% on their native token, the cro. Among other benefits, this figure becomes 18% when you stake 500 mco tokens, the other native token.
Confused?
Mco and cro are both, stakeable, crypto.com native tokens, each possessing unique benefits.
If you buy and stake 50 mco tokens, you will receive a Midnight Blue debit-style card from them (In accepted countries) which gives you 1% back on all purchases paid in btc. It acts as a loyalty card, like Frequent Flyers but instead of receiving points in return it gives you btc back on all purchases.
I'm a huge amazon shopper and if I wish I could take part in this as 1% of my last 2 years of amazon would be quite significant, but the card isn't available in Canada yet.
There are 5 staking tier levels with each level up gaining extra benefits and a bigger btc return with a maximum of 5%
You can receive rewards such as free airbnb, netflix and spotify, even vip lounge access at airports with the tier 3+ card which comes in either Jade Green or Royal Indigo composite metal replacing the base plastic card.
Check out the specific of each card here https://crypto.com/en/cards.html
Cro tokens that are staked on the app yield up to an amazingly high 16% if the 3 month period is selected. There is a flexible option which gives you 12% and the option to move those cro around as you please. Seeing so I'm here to generate as much crypto as I can, I just finished a 3 month staking period and received 413 cro, equating to $20.65 in usd. Not a bad return, just for holding onto an asset that wasn't doing anything on another exchange.
This brings me to the exchange part of crypto.com
Cro tokens have more staking utilities on the exchange.
1. Another high yielding interest rate of 20% paid out daily.
2. A soft stake feature of 3% just by holding cro in your wallet (23% combined with the staked cro)
3. Syndicate Events
Syndicate events are sales on tokens where you can take part in buying some coins at discounted rates when you use cro to buy. The discount is applied to a pool of staked coins and depending on how full the allocated pool is, each contributor receives an amount of the sale coin back and is refunded what cro was not sold.
With another coming up in 3 days time for VeChain (VET) which I was interested in buying anyway, I have a dedicated amount of cro sitting in my wallet ready to go.
This is another multiplying opportunity as by doing this, you can buy tokens at 50% off them have them go straight back into the high yielding 23% cro staking account.
If you'd like a referral bonus of $50 for funding an account with 50 mco ($250usd) use my referral link
https://platinum.crypto.com/r/5dva8j4yxg
-Pros-
Possible 23% interest on cro
Easy UI navigation
Syndicate events / half price deals
Debit card credits you btc on purchases.
Membership mco reward system.
Great customer support.
Low trade fees.
-Cons-
Under par rates when staking other coins.
You need to unlock the app every time you exit it.
Celsius
There are indeed platforms that offer similar compound interest on crypto, but the research I've seen and read pertain to me trusting in Celsius a lot more. Having a platform where all crypto held can earn compound interest is what I'd been searching for. Now I can truly have one wallet to hold all my coins, earn great interest and use profits from other sources to add to this bank/pool to kick in that multiplying return.
Although I'd found out about Celsius probably 3 weeks after I found Nexo, at the time, they didn't offer compound interest on any of their products and the yields on anything besides stablecoins were sub par. I wasn't too interested seeing as I was searching for platforms that rewarded me a multiplier system and at the time their interest yields weren't too impressive to me. But that all changed for me coming into 2020 when Alex Mashinsky, the CEO and figure head of Celsius, announced that all coins would be compounding going forward.
Btc was now offering a base level around 4% but if you held some of their native token, cel, then you would receive an additional yield based from the ratio you held. I'll explain...
There is a reward system where if you hold 5% or more cel token, you will be rewarded with an increased yield in cel token. On the top end of the scale, platinum, if 15% or more of your total portfolio is occupied in cel token, all held coins will be buffed with an additional 35% interest in cel. This is the best rate on the market and if you just have $500 to put into a new savings account I would recommend this one. With a small amount of money you'll gain fantastic exposure to the space and of that $500 you'll only need about $100 in cel for the top tier loyalty bonus to engage.
Given this high interest return, it is only natural that the utility on the coin will gain interest across the internet driving the price with it increasing the value of the cel token itself, which would in turn, drive your profits further.
This is why I want DeFi to go viral.
I am now happily sitting in the top tier on 18% held CEL and am reaping the 35% benefits.
Celsius has become my new favorite crypto bank and putting a few different types of coins into this account has seen more gains already than what my TFSA savings account with CIBC has given me all year ( $0.75USD :D ). After using this app for about a month now, I plan to put all my coins in here going forward, after locking up periods are complete.
The app is smooth and easy to navigate, follow and it kind of addicts you to looking at the earnings. The total interest earned tab on the top right is updated weekly and fluctuates with the market.
This is a fantastic loyalty program and is another perfect base multiplying system. The ridiculous 35% is the most I've found and why I shared this platform last. The earning potentials on this are amazing and I'll be employing just a couple of strategies to maximize my returns.
If you're thinking about joining any of these platforms I would highly recommend Celsius due to all the boxes being ticked.
If you'd also like to receive a free compensation when making the account, be sure to use the referral code 164391fe3b or click on this link https://celsiusnetwork.app.link/164391fe3b
In doing this we both receive a free $10 bonus when you open fund an account with $200 for a 30 day period.
Pros:
Compound interest paid weekly on all coins.
Loyalty system pays up to 35% extra interest.
Discounted loans.
Amazing app.
CEO does monthly live Q&A's.
Cons:
Interest is average unless loyalty program is employed.
As always, getting the necessaries out of the way is riveting, but it is pretty valuable information. If you've followed these articles you'd know why I am bullish on crypto and maybe you're interested or know a little about DeFi. I'm writing a sister article titled "Compound your Crypto" to really giga drill canon the utilization of the systems discussed here and why why everyone should be interested in them.
It will be revolutionary.
It creates solutions to many economic tyrannies.
It creates the opportunity to make money from our own money.
PEACE!
-Noteable youtubers-
Moon Lambo
Kevin Cage
DIY Investing
Altcoin Daily
-Notable News and Chart Analytics-
Trading View https://www.tradingview.com/
Coin Telegraph https://cointelegraph.com
Coin Market Cap https://coinmarketcap.com/
Coin Desk https://www.coindesk.com/
Decrypt https://decrypt.co/
Coindesk https://www.coindesk.com/
Peace and happy researching!
