ince yesterday, the Celsius platform started to support 5 additional assets: $MATIC, $SNX (Synthetix Network Token), $LPT (Livepeer), $KNC (Kybernetwork) and $LINK (Chainlink).
The first three come with a very appealing interest rate, both for earning in kind and for earning in CEL. So, as not all of them are mainstream tokens, I thought it could be useful to give an overview about Matic, SNX and LPT. I will try to be as simple and short as possible so it can happen that some descriptions will be incomplete. Please, always do your own research before deciding to invest your money in whatever asset
MATIC: giving scalability to Ethereum
Matic is a second layer chain and has been created with the purpose to scale the limited capabilities of Ethereum to process a decent number of transactions per second (currently, Ethereum can process only 15 TPS). The concept is to “group” transactions off chain and to push them on the main Ethereum chain at every given time (30 minutes in the case of Matic).
In this way, the number of TPS can scale up significantly and, at the same time, the costs associated to each single transaction can be significantly reduced.
Matic has launched its main net on last May and its consensus is achieved via Plasma combined with PoS (Proof of Stake).
If you are interested in more technical details you can find all the information you want on their website. From a potential investor side is more relevant to know how their business model looks like. It is true that Ethereum has limited capabilities, but Ethereum 2.0 is about to come and it must be seen what kind of improvements the main net will offer. If Ethereum 2.0 will prove to be a significant improvement in the areas covered by Matic, highly likely that project could lose appeal (and value). Matic is focused on gaming Dapps and the so called “DeFi” industry: for sure two industries that will grow a lot in the future and with a huge potential in terms of on-boarding new users. The full list of Dapps built on Matic can be found here.
Before deciding to invest in Matic be aware that the project had some troubles in the past. On last December, soon after the listing on Binance, the value of the token dropped 70% in about an hour leaving the community of traders/investors almost speechless. The team always denied being behind the drop, but the event happened. Since then, Matic had a steady growing trend even if it still did not manage to re-gain the price it had before.
Overall, Matic seems a solid project, but the caveat above should be considered.
On Celsius the token offers an appealing 16,16% APR if interest in earned in kind, a huge 22,40% if earned in CEL (ratio over 15%)
Synthetix: a trip on synthetics assets
What Synthetix is could a bit hard to understand, especially for people not remarkably familiar with finance. Synthetix is a decentralized synthetic asset issuance protocol built on Ethereum. But what a synthetic asset (Synth) is? Synths are a mix of assets that mimic the return of another asset. In simpler terms, a synth can be the tokenization of a call option and a put option on the same stock without you having to own the stock at all. Confused? Well, not surprising. The market of complex financial instruments like these has been traditionally the hunting ground of institutional investors. The point is that, when these assets can be created with crypto and a smartphone, this world could become accessible to a huge number of players who has been kept far from it till now.
What a normal user of Celsius should think about this opportunity? Well, my suggestion is to leave it to specialists or to people into the topic. It is understandable that the interest rate offered on $SNX can be tempting (same as for $Matic), but if you are not into complex finance, the decision to invest in this token would look like to buy a lottery ticket. Legit, but risky.
Not talking of the token itself because Synthetix is performing really good and it has likely a market to serve and space to grow further, but is a token for a specific target of investors. If you don’t belong there, go for other, easier options.
Livepeer: decentralized video transcode and distribution network
Livepeer is a platform offering a decentralized system to transcode and distribute videos. Said simply: to broadcast or livestream videos is extremely costly in terms of used bandwidth because you need to take a raw video and then, in order for the user to get the best possible experience regardless of the bandwidth and the device he has, you have to “re-format” it in the best fitting one for him. Livepeer handles this process by giving the task to re-format videos to its network of users (let’s say miners) who, in exchange for a fee, offer their computational capacity (CPU and GPU) and bandwidth to perform the assigned task(s).
Complicated? Well, not that much. Instead of using a centralized computer to do the job, they simply split the task around their network.
The catch is that you must own their tokens to be part of the network of transcoders/distributors (they call them “orchestrators”) or simply to stake them (“delegators”): the more tokens you own, the bigger job you will be assigned to and the more rewards you’re going to earn.
The project seems solid because the demand for streaming and broadcasting videos is growing constantly despite the huge costs associated to video broadcasting and streaming. I do not have any particular knowledge about this industry, but – like many others – I am a video consumer. Video platforms are springing up everywhere and the number of people willing to communicate in this way is huge. I tend to think that there is a big space for growth for business able to offer the requested quality at a cheaper price. And the cheaper the price it goes, the more it will attract new users/broadcasters to the business.
It could be worth a go, also because the interest offered (10,51% in kind and a remarkable 14,43% in CEL) is high.
In short, these new three tokens supported offer a much higher interest in respect of the ones available until today but be aware that is always valid the same rule: the higher the reward, the riskier is the business.
All in all, a cool addition to the platform and a good opportunity to invest part of your portfolio in higher yield assets. In my opinion, particularly interesting for those willing to grow their asset portfolio a bit faster.
Nice article