Crypto Academy Season 2 Week 7 Homework Post for (@imagen) - Different Methods to Generate Income with Cryptocurrencies

in SteemitCryptoAcademy3 years ago

This week, the professor talked about different ways to generate income with cryptocurrencies. The cryptocurrency industry is expanding day by day and offers traders different options.

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1.) What platform did you choose? Why did you choose it? What other types of services do you offer? (Add relevant information)

I chose Pancakeswap as the platform. Now I will brief you about Pancakeswap. Then I will explain why I chose this platform. Then I will talk about what other types of services it offers.

What is PancakeSwap?

The cryptocurrency industry is shifting towards decentralized applications. Maybe decentralized applications will become more popular after 5 years. Pancakeswap is a decentralized exchange based on Binance Smart Chain created by anonymous developers.

It is possible to exchange BEP-20 tokens on the decentralized exchange. Those who know Uniswap and Sushiswap are well versed in how Pancakeswap works.
A lot of service is provided on pancakeswap. I'll talk about these a little later.

Why did I choose pancakeswap?

We know that the cryptocurrency industry is shifting towards decentralized applications. Pancakeswap is also one of the most popular and most trusted decentralized exchanges.
You do not need to be a member to trade on Pancakeswap. You need to do KYC verification. Your funds cannot be stolen. Because you do not directly transfer your funds to the stock exchange (pancakeswap). You interact with the exchange through decentralized wallets such as MetaMask, Binance Chain. If the stock market gets hacked, you do not have to worry about whether I will lose my funds or whether the owners can steal my funds.

Since Pancakeswap is based on Binance Smart Chain, gas fees are quite affordable. Imagine comparing it to the Ethereum network. You want to make a profit from your transactions, but you pay most of this profit as gas fees. With Pancakeswap, you pay BNB as a gas fee. BNB Coin is one of the coins supported by the Binance exchange.

Although Pancakeswap was developed by anonymous developers, it enjoys strong support from the Binance exchange. Binance exchange CEO CZ occasionally mentions this decentralized exchange on social media. So Pancakeswap is not a scam and has a lot of supporters. A stock market that has proven itself in the industry.

APY rates are quite high on the Pancakeswap exchange. You can get returns that you wouldn't get elsewhere on this decentralized exchange.

It is possible to benefit from services such as Trade, Farms, Pools, Prediction, Lottery, Collectibles on Pancakeswap exchange. Not all decentralized exchanges can provide these services.

What services does Pancakeswap offer?

Exchange:
There are many services that users can benefit from on Pancakeswap exchange.

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Swap
As you can see in the screenshot, you can trade cryptocurrency on the decentralized exchange. You can convert BNB to other cryptocurrencies. On the contrary, it is possible to convert other cryptocurrencies to BNB. There is a fee you have to pay for this. This is not the commission charged by the exchange. It is the fee paid to users who contribute to the liquidity pool.

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Liquidity
In the Stock Exchange section, there is a section called Liquidity, apart from swap transactions. Here you can make an income by contributing to the liquidity pool.

Farms
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The service I will use for this homework is Farms. Pancakeswap's governance token is CAKE. To do farming, you need to lock your tokens to the liquidity provider (LP). In return, you can earn CAKE as a reward.

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Each LP token has different returns. These rates of return vary daily, weekly, monthly and yearly.

Pools

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In this section, you can have the chance to earn a large amount of CAKE by staking your CAKEs. In Syrup Pools, it is possible to earn earnings by staking BEP-20 tokens and other tokens / cryptocurrencies other than CAKE.

Predection

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In this section, it is possible to make a profit by estimating the prices of cryptocurrencies (BNB). You predict whether the BNB price will rise or not. Then if you know you will make a profit, if you do not know you will lose.

Lottery

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It works like normal lottery tickets. You pay 1 CAKE for 1 ticket. If the user knows 4 numbers, he wins the big prize. If he knows 3 numbers, he will win a slightly lower prize If the user knows 2 numbers, he wins the lowest prize. If the user knows number 1, he will not win any prizes.

Collectibles & Team Battle

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Collections are one of the most popular topics of the last period. In this section of Team Battle, you can win prizes by competing with other teams.

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2.) Explain the process to transfer the funds to that web platform. Show Screenshots

PancakeSwap platform is a decentralized application. You must have a cryptocurrency wallet to access / interact with this platform.

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I thought it would be better to use a Binance Smart Chain wallet for PancakeSwap.

First, I will transfer cryptocurrency to Binance Smart Chain via the Binance exchange. Some BUSD and some BNB. I will use BUSD for farming transactions, and BNB for gas fees.

Transfer BUSD to Binance Chain Wallet

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I copied the BUSD address on Binance Smart Chain. I will make a transfer transaction on the Binance exchange.

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I will transfer 26,425 BUSD. I will not pay any transaction fees.

Transfer BNB to Binance Chain Wallet

I need BNB as a gas fee to trigger smart contracts on PancakeSwap platforms.

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I copied the BNB address from the Binance Chain Wallet.

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I will send 0.03580278 BNB from Binance exchange to your Binance Chain Wallet. I will pay a network fee of 0.0005 BNB.

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I have completed all transfers to earn returns from PancakeSwap platform. Binance Chain wallet interaction with Pancakeswap is the only one left. I'll show you that in a moment.

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PancakeSwap and Binance Chain Wallet Interaction

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  • I log in to https://pancakeswap.finance/. I am opening a Binance chain wallet. I click where it says "Connect". I choose Binance Chain Wallet as my wallet.

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*I made the interaction. I click where it says "Farms".

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I choose the BUSD-BNB pair. I click on the place I marked.

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I want to contribute 11.4118 BUSD + 0.03 BNB to the liquidity provider. The total is equivalent to $ 22.42.

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Then I confirm the transaction. I am doing another confirmation from the Binance Chain wallet.

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As you can see in the screenshot, I contributed to the liquidity provider.

3.) Explain the profitability of the chosen method.

I added the stable cryptocurrency BUSD and the token of the Binance exchange BNB to the liquidity pool. I added 11,4118 BUSD and 0.03 BNB. I have added $22,8236 in total. For these, I will earn CAKE as a reward.

If I do not fail before the 72 hours are up, I will have to pay a certain rate. So I shouldn't unstake it for 72 hours at least.

Since BUSD is a stable cryptocurrency, the price of BUSD will remain more or less the same. However, when the BNB price drops, even if I make a good return, there is a possibility that I will make a loss. So it is not wise to contribute to the liquidity provider during bear periods / when the market trend is going to decline. Contributing to the liquidity pool normally yields returns, but you lose money when the price of the cryptocurrency you contribute to drops.

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The daily return is 0.09%, the weekly return is 0.66%, the 30-day return is 2.89% and the annual return is 41.24%.

Especially the annual return rate is very good. We are likely to enter the bear period after 1 year. That's why we hurt. But the monthly return can be used for a while.

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Conclusion

We can utilize cryptocurrencies in many different ways. We can limit ourselves only by buying and selling. We must seize all opportunities in the industry. Sometimes we can lose money while taking opportunities. That's why we need to be very careful. While contributing to the liquidity pool and obtaining similar returns, we need to determine the period in which we will operate.

Cc:
@steemitblog
@imagen

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You have explained well as usual sir. Your post are really good to learn new things. @tht

#affable

Hola @tht

Gracias por participar en la Academia Cripto de Steemit.

Mi apreciacion: Buen trabajo, cubristes todos los temas solicitados, sin embargo, pudistes ampliar un poco mas la descripcion de los servicios que ofrece la plataforma que escogistes.

Calificacion: 8.5

Thank you.

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