DeFi Project Tokens: are they the cryptocurrency version of dividend stocks?
I read with great interest recent Cointelegraph articles regarding the potential reallocation of capitol from 1st generation cryptocurrencies to DeFi projects with great interest. I am a fan of dividend investing and I find cryptocurrencies which provide both appreciation and income to be the most interesting cryptocurrency investments. I think the popularity of DeFi platforms and the growing value of their tokens may represent unconscious investor embracement of these same concepts. I am currently invested in Steem which I feel acts more like a dividend stock then a buy and hold crypto.
Steem and Steemit, as I discovered the “social media platform” on a blockchain actually has three tokens, a locked or powered up form of Steem called SteemPower which provides an annual APR and additional income from upvoting articles on the platform, something called “curation”. I discovered this buried form of decentralized finance while reading about a new program on Steemit, called Steem Staking, which advertises itself as a safe in-wallet staking form of DeFi, similar to what’s offered on other DeFi platforms with an ROI projected at 10-12% per annum. I provide you these links to this basic DeFi project on Steemit called Steem-staking should you wish to explore it further. It provides not only the safety on in-wallet staking, but also locks up your Steem token as an illiquid, non-saleable form via smart contract, as Steem Power. Lastly the Steem is protected by a cryptography passwords of 40 characters. I think it warrants further research by the serious cryptocurrency investor.
Addendum: I contacted the writer of the article and asked them to look at DeFi on Steemit and provided them two links.
The most interesting Smart Contract is called Steem Power which is also the backbone of an account's voting-potential. Locking up your Steem tokens as Steem Power grants you a 3% APR paid in Steem. This is also widely known as in-wallet staking, the most basic for of decentralized finance currently offered by many DeFi platforms. Additionally the Steemit platform allows you to further earn on your locked up Steem tokens via SteemPower, which gives you influence or voting power, which allows you to direct Steem tokens to authors or other content creators via upvotes, which look like Likes from Facebook, and the amount of rewards you direct is directly proportional to your Steempower. In other words, the more Steem Power an Individual has, the more rewards their vote provides. The beautiful part of this voting process is the investor gets 50% of the rewards he directs to the content creator. This process, called “curation” on the Steemit further increases the ROI on invested SteemPower. This provides a strong effort incentive to investors to read and reward content from authors on Steemit. stronger their vote is on Steemit. I believe this in-wallet staking, which is made possible by the specialized smart contracts on Steemit is one of the earliest forms of decentralized finance. It also appears to be a very safe one, as the locked tokens are not sale able on any exchange and require multiple passwords and a 4 week waiting period to redeem for sale as regular saleable Steem tokens.