Investments tools for dummies - Intro

0 14

So we got our crypto, we set up our wallets and finally we adcquire some of those sweets assets. What do we do now? Do we stare at the screen watching the candles go red, green, red, green, and we click sell trying to make somewhat a decent profit?

No, of course we don't do that.

I will give you some tools to put your hard earned crypto to work, but this is not financial advice and you should do your own research and not trust a stranger on the internet.

I mainly use Binance. Yes i know, "not your keys, not your coins" but still, i go by the rule of using Binance because at this moment, it's "too big to fall" so it gives that little bit of security. What this exchange do, it's offer us some tools to gain a little bit on our currency and pretty much force you to learn and understand some of what we thought were the most sofisticated methods that only big brokers use.

They're not that hard to learn, but they do imply some risk analysis, so be ready to be aware and to be sharp while learning about them.

Flexible and Locked Savings

Flexible and locked savings are the most common tools you'll be introduced to.

They're actually pretty simple. Assuming as always you won't do scalping or day trading, but you'll hold your coins; you basically just lock them away to earn some interest. You're not gonna sell them anyway so why don't gain something by having them sit there.

Main difference about these two is that Flexible Savings allows you to withdraw your crypto instantly, it doesn't have a time set. Which is good if you wanna make a quick sell at some time and you want them.

Locked Savings on the other hand, it pays more interest but it requires you to have your crypto locked up for a certain amount of time. 7, 14, 30, etc days. Of course they pay you more interest if you have it locked by 30 days. But still it's a good way to earn some interest if you're not on the trading train.

DeFi stacking or give your liquidity to a project so they can grow and earn some money back!

Basically what Binance does it's say to you: "Bro, here's this new nice project, this smart contract in this blockchain, they kinda need assets, and we'll let you in! But you may lose some. Wanna join?"

I personally use this option only with stablecoins and in short periods of time. At the moment of writing this article, USDT it's paying 8% interest per year, which compared to a bank it's........ 7.9% more. So yeah, there's that.

I do not recommend it for novice investors if they don't do their research about the project itself.

Liquid Swap - my personal favourite

First in order to understand this tool i'll give you some simple explanation about it so you can understand it.

Think about it like this, let's say a friend it's opening an exchange to lend money to other people or allow them to make some transactions. They will need cash and assets to do it. Like, if they wanna offer to trade BCH, they will need someone to give them BCH. So in this case scenario what we do it's lending them our assets. We provide the money for them to lend or transact. What do we get in exchange? A piece of the action, we get a percentage of the fees in the crypto we stake and some BNB rewards too!

It's submitted in pairs, like AAVE/USDT and they keep an equal share according to the needs of the pool. This is a risky tool - i repeat, it ITS RISKY - I only use it with stablecoins USDC/USDT pair since they're the less volatile. You absolutely CAN lose money if the prices of the coins starts to get all crazy. That's why i recommend stablecoins because well, they're stable. The rewards are of course a lot smallers but a lot safer.

At anytime you can redeem your liquidity from the pool and back to your spot wallet. But this is a tool i particulary like.

Please, i can not stress enough that if you intend to use any of this tools, make your own research. You can lose money but you too can win money. Just analyze the risk, understand it and make intelligent choices.

Thank you for reading!

1
$ 0.10
$ 0.10 from @TheRandomRewarder

Comments