Steemit Academy Season 2, Week 2 || Make your cryptocurrencies work for you - by @fendit
It is great to be part of the steemit crypto Academy season 2, I am willing to learn at all times and this won't be an exception. After going through the lecture by @fendit, participating in the assignment was a venture worth giving a try.
Homework Topic
Write a post explaining:
a) Which is your risk aversion, which of these products you find the most appealing and why
b) Explain in your own words fixed and flexible savings, high risk products and launch pools
c) 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.
Investing is a very risky adventure that could bring great returns as well as great losses. With investment, it deals with uncertainty and this uncertainty is where the investors risk tolerance comes in.
Risk is as a result of decision made and when it comes to investing or trading, it most often has to do with finance(funds).
Like the professor said, there are different risk tolerance, the Conservative tolerance, the Moderate tolerance and the Aggresive risk tolerance, so to answer this question "Which is your risk aversion, which of these products you find the most appealing and why?" I will first like to say the tolerance level I fall into. As much as I love to put my money in a place where my hands can reach at all time, I can risk any amount without care of losing them all {that's investment I must say but not everyone can take this risk} which means that I fall in the third tolerance category (Aggresive risk tolerance
I have been using Binance for a while and I have been using several of their investment products. Looking through Binance products, one I have been a part of is the Token Launch Platform
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Token Launch Platform is my favorite, although I use all products as I like my money to work for me but then the Token Launch Platform goes with my policy (putting my funds where my hands can reach). With the token launch platform, I can stake BNB, BUSD, and other required coins to get fractions of tokens which will be listed on Binance before they get listed and at will, I can take my funds out and use them for other purposes.
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As much as I like the token launch platform, I do not like the launchpad as tokens needs to be staked there until the staking period is over.
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Fixed Savings
With this saving method on Binance earn, funds are fixed for a particular period of time where the funds won't be tampered with but allowed to generate interest.
For Fixed savings, a certain period is agreed upon alongside with the percentage of interest (APY) to be emanated.
The Anual percentage yeild (APY) is dependent on the period in which the coin/asset is staked. The longer the period, the bigger the returns.
Flexible saving
This form of saving as the name implies is flexible meaning funds can be deposited and removed at any time. Funds deposited into the flexible saving wallet and staked will begin to recieve interest 24 hours after staking, also, APY are lower compared to fixed saving.
Higgh Risk product
You should expect that it is a high risk investment as the name implies. This product has three types of investment options which are Defi Staking, Dual Investment, Liquid Swap (Liquidity provision)
Defi Staking
With Binance Defi Staking, you do not have to worry about the complication of Defi platforms, all you have to do is stake and get rewards for staking as Binance will allow you stake into Defi projects without worrying about keys, and other complicated issues related to Binance.
Defi Staking can be flexible or fixed, depending on which you prefer. Staking is done on Defi platforms such as Curve, KAVA, VENUS, Compound, and HARD.
Dual Staking
With Binance Dual Staking, yeilds on stakes are earn in two assets, the staked asset and BUSD. Returns are determined by both strike price and settlement index. If the value of the settlement index for the asset is higher the strike price at the end of the stake, yeilds are paid in BUSD, but if the settlement index is lower than the strike price, yeild is paid in staked currency.
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Binance Liquid Swap
Adding liquidity into a liquid pool and becoming a liquidity provider is not risk-free. When the market price of tokens fluctuates greatly, the staking income may be lower than the income of ordinary holding of the tokens, and losses may even occur. For more details about the principle of Liquidity, please refer to Binance Liquid Swap Terms of Use.
The above warning is from Binance and it should explain the entire process of Binance liquid Swap. With Binance Liquid Swap, you provide liquidity to pools and earn incomes for providing liquidity to AMM. Liquidity can be provided with Stable coins or with volatile coins such as BTC and so on, in the innovation pool section.
LaunchPool
Binance Launchpool is a good way to earn passive income in a flexible way by staking BNB, BUSD, or other required coins to get coins that are listing newly on Binance. Binance has had several tokens in their launchpool such as DODO, LIT, BTCST, and many more. IT is flexible because coins can be unstaked at any time after staking them.
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.
Binance Launchpool
Since I use Binance and I am very familiar with investing in the Launchpool, I will be explaining this. First, the farming period is often between 14 and 30 days and coins can be staked and removed at will.
There are two major coins that can be used to farm in launchpool, BNB, and BUSD, other coins can be specified. Each of these coins has a specific amount of token allocated and snapshots are done every hour to check the balance to determine how the token will be distributed to holders.
- To participate in Launpool farming, you trade your available coin to BNB or BUSD.
- Click on Launchpad.
- Click on a project to farm and stake the coin of your choice (BNB/BUSD)
- You can also use the custom allocation that is used to stake coins.
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- You can redeem rewards or leave them there and get them automatically in your spot wallet after the farming period.
Conclusion
Using Binance to earn passive income as well as investing is one decision that has been profitable. The Binance ecosystem consists of several investment platforms and products but while investing in any of this, you should not forget your risk management and risk tolerance.
All Images were screenshots from Binance except stated otherwise
Thank you for being part of my lecture and completing the task!
My comments on your work:
All three tasks were very well explained! I really liked that you provided more info than expected when it comes to high-risk products.
General comment:
Nicely done!!
I really enjoyed reading your work, you can tell that you know what you're talking about and it's very well explained. Congrats! :)
As a suggestion for other lectures, I'd focus a bit more on the overall presentation of your work. You have very strong and consistent knowledge, so by paying a biiiit more attention to markdowns (for instance, you took a paragraph from Binance and it's alright that you included the source, it'd be better if you quoted it differently), you'd do a perfect job! Still, what you did was great!
Overall score:
8.5/10
This will be an error from the editor page newly introduced by steemit. I will edit this. thanks a lot.