Crypto Academy Week 10: Homework Post for @fendit | Make your Cryptocurrencies work for you
Introduction
It's another great time at the crypto academy, a time to equip oneself with more knowledge in cryptcurrency through learning from seasoned crypto professors. I was in attendance of professor @fendit lecture and all went smoothly in the lecture. In this post, I will be solving the task as given by the crypto professor.
Which is your risk aversion, which of these products you find the most appealing and why?
In cryptocurrency trading/inventing, it is important to know that we have three levels of risk aversions, namely; Conservative tolerance to risk, Moderate tolerance to risk and Aggressive tolerance to risk. From the three mentioned above, I find my self in the second category which makes my risk aversion to be Moderate Tolerance to Risk which means as an investor, I can accept a higher risk and price volatility in any asset I've invested in.
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Traders/investors that fall into this category (moderate tolerance to risk) as me are capable of entering an investment that might come with higher risk and volatility but one thing to be remembered is that, such investment brings the best out of them, the more risky it is, the more you move towards getting the best out of them.
The Product I find most appealing
The product I find most appealing in this case is the Fixed savings when I will have my assets locked up for a long period of time, up to 90days.
Binance Fixed savings
In locked savings on my Binance, I have my assets locked for many days knowing how much price volatility can also affect my income but even with that, I am still comfortable with the investment and that makes me moderately tolerable to risk in cryptocurrency investment.
Why I choose Fixed savings.
The reason to which I choose fixed savings is the fact that I get to earn income on my assets locked in the savings account throughout the locked savings period. The income is based on percentages in Annual Percentage Yield (APY) and the more days I have the asset locked in there, the more income I should be expecting. So, I can decide to divide my assets into various parts and use some for locked savings to earn from it, despite knowing that volatility can affect my income.
Explain in your own words fixed and flexible savings, high risk products and launch pools
Fixed and Flexible savings
Fixed Savings: Fixed savings on Binance exchange is the act of my having one's asset locked for a period of time to earn steady and passive income from the assets staked over the period of time having the asset locked up. The income is based on percentages in APY and you can decide to subscribe to the locked savings if you are comfortable with the APY given on any asset of choice. An important thing to note is that, you can't access/remove your locked savings period is completed and the higher the duration, the higher the Annual Percentage Yield (APY).
Binance Fixed savings
Flexible Savings: Flexible savings is a way of putting your cryptocurrency assets to work by keeping in flexible savings and in such way, you expect certain amount of income from your assets in savings. The income is also based on percentages in APY and one notable difference between flexible and fixed savings is that, flexible savings allows you to take out your asset whenever you wish to.
Binance Flexible savings
High Risk Products
High risk products are highly risky product offered in the realm of cryptocurrency investment which could include being a liquidity provider, staking in DeFi and entering a Dual Investment.
Liquidity Provider: In this situation, investors put their assets into the liquidity pool such that the assets are used for providing liquidity for a particular project and income is earned in return. Assets put into the liquidity are not accessible by the investor until the end of the liquidity period.
DeFi Staking: Investors has the opportunity to invest their assets into different DeFi platforms and in return, income are expected depending on the weight of the asset put into the staking and the income is realized at the end of the staking period.
DeFi Staking
Dual Investment: Dual Investment is the type of investment whereby investors deposit funds into the dual investment platform using their crypto assets and in this situation, the income is generated at a fixed APY and at end of the investment period, the income is not paid based on the settlement price only but the strike price too would be put into consideration. Note that, this investment involves two crypto currencies. The income can be greatly affected by price volatility and this makes this a high risk product.
Launch Pools
Launch pools can be related to ICO "Initial Coin Offering" but in this case, it is IEO "Initial Exchange Offering" because this is offered by exchanges. In short, Launch pools is a platform where new cryptos are first reserved before listing on an exchange, investors are allowed to stake their crypto assets into the pool to provide liquidity for the asset on the exchange and they earn income at end of the period which is termed as "farm yield". You should take note that this investment type income is also affected by price volatility.
Binance Launch pool
Show and give detail on how to set the investment you chose in Binance. If you don't use Binance as your exchange, let us know which alternatives you have in your own exchange and simulate the process of investing in Binance.
The investment I choose to go with on Binance in this case is the Fixed/locked savings and the process of entering the investment type would be shown in a few steps below.
Step 1
- Go to Savings from the Binance App landing page.
- Switch to Fixed.
Savings
Fixed/Locked Savings
Step 2
- Select an asset.
- Hit the subscribe button.
- Select the duration period; 7, 14, 30 or 90 days.
- Input the amount of asset you are fixing.
- Agree to terms by checking the small box.
- Hit Confirm Purchase button.
Fixed Savings Last Stage
With the above steps, after confirming the purchase my fixed savings will start accruing interest based on the APY of the duration chosen during the process.
In conclusion, the concept of making the cryptocurrencies work from you is the best you could think of, as you don't have to wait until the price of your owned crypto assets in the wallet rise before making profits rather put the assets into different crypto investments based on your level of tolerance to risk. Thanks to professor @fendit for bringing up a wonderful lecture like this. Thanks to you all for reading.
Cc: @fendit
Written by; @fredquantum
Thank you for being part of my lecture and completing the task!
My comments on your work:
All three tasks were really good!
General comment:
You explained these concepts really good! It shows that you understood what you wre talking about!
For future references, try to pay a bit more attention to markdowns as if helps you polish a lot more your work! But still, great job!
Overall score:
6/10