Crypto Academy Week 10- Homework Post for Professor @fendit - Topic: Make your cryptocurrencies work for you.

Due to the complexity of some of the concepts in cryptocurrency, most persons are unable to fully explore the benefits and profits it has to offer. While few people in the world still wonder how profitable cryptocurrency is, majority only know that they can make money through cryptocurrency by buying them and selling them later when their values has increased. Just the same way a half-filled cup is neither empty nor full, but is more inclined to the negative, having only a little knowledge about how to make your cryptocurrency work for you has done more harm than good.

Pixabay.com: Cryptocurrency

Am really grateful to be a part of Steemit Crypto Academy, am also thankful for being a part of Professor @fendit lesson today. Thanks to the lesson I am now exposed to multiple ways of making lots of money through cryptocurrency. Below is my response to the exercise given by the professor.

Question 1: Which is your risk aversion, which of these products you find the most appealing, and why?

My first sets of experiences in the area of cryptocurrency were not funny ones. Being a choleric, I had goals on how I expected each of those investment to run, and I invested heavily on them. I remember when I learnt about the initial coin offering (ICO) of Swiss coin, then I do wake up some night to calculate how much I expect that the tokens I got for investing on the coin will turn into in few years time. I made lots of other crypto currency investments, (laughs) and began to see my self as a future self-made billoniare. I need not tell you what happened with those coins and their token.

Today, I don't invest as I did those days, in fact, I don't like hearing about tokens talk more of investing on them. What they said is true, "we are what we have experienced". Right now, I prefer investing on already thriving coins, and even while doing so, I invest at moderate risk, as I will really mind if I lose my investment.

Pixabay.com: Strategy

With all these facts in place, I believe that my risk aversion is moderate risk tolerance, for although, I know am not making too much, I don't mind because it is not little as well. If I happen to lose in the process, it will be lot easier to curb the losses and bounce back.

When it comes to the product I find the most interest in Binance, I think I will go for binance savings. For an investor with a moderate risk tolerance, I believe Binance savings as the best way to make money at moderate risk, and considering that binance savings is not complex to understand, you can easily exploit it advantages.

Binance savings is of two kinds the flexible and the fixed savings. In both savings you receiving passive incomes. The percentage profit on each saving differ based on the duration of the savings. I prefer the flexible savings as I can withdraw at any time I want. The few times I have saved on the fixed savings, I never allow my coins to stay fixed for more than 30 days.

Screenshot from my Binance App

As an investor with a moderate risk tolerance this is actually a smart move, as most times coin values go crazy at month ends. To stake my coins in flexible savings on Binance, I normally first convert my idle coins to BUSD (I started doing so after a suggestion from a friend, although I don't see why I need to go through all that stress, but you know, "old habits die hard").

Question 2: Explain in your own words fixed and flexible savings, high-risk products and launch pools

FIXED SAVINGS

Just as mentioned earlier, fixed savings is one of Binance savings options. The concept of fixed savings is not so different from that of fixed deposit savings in normal banking system. Every money in fixed deposit savings are none withdrawable until a certain stated period reaches. The same applies to cryptos saved in fixed savings. Now, while these coins are in the fixed savings, they yield profits at a predetermined (or agreed) interest rate.

Fixed savings are best suited for long term investments. The saving duration or lock period offered by Binance are 7days, 14 days, 30days or 60days, and the higher the durations the higher the risk and as well as the interest earned.

Pixabay.com: Locked

Immediately a user selects how much he wants to save and how long he wants his fixed assets locked, Binance automatically deducts the subscribed amount from the user's wallet and keeps them for the pre-agreed period.

FLEXIBLE SAVINGS

Flexible savings is another type of savings offered in Binance. It can be compared to the regular savings offer you get from your bank. Unlike the fixed savings where your funds are locked up till an agreed date, flexible savings allows you to withdrawal your funds anytime you wish to.

Although flexible savings has a smaller interest than the fixed savings, it is advisable to subscribe to the savings than just leaving your coins idle in the wallet.

Immediately a user subscribes to flexible savings, binance deducts the amount they want to save and locks them up for 24 hours. At the end of the 24 hours, both the funds and the interest it has accumulated can be withdrawn. In case you don't wish to withdraw immediately after 24 hours, you can still leave your funds in the flexible account and withdraw it anytime you have a need for it.

Pixabay.com: Flexible savings can be withdrawn anytime

HIGH RISK PRODUCTS

Just as the name implies, high-risk products poses a high amount of risk on a users fund/investment. These high risks are due to the volatile nature of the cryptocurrency market, as prices can be all time high in the morning, and by evening could be very low.

How high risk products are affected by the volatile nature of the cryptocurrency market can be better understood by considering an example. Let say you staked 1 BTC for a period of 1 month. At the time you made the stake the market is high and its worth was about $50,000. As the month drew to an end, BTC drops in value to $30,000. At the end of the stake duration, although you will be paid back the exact money you invested (in this case 1 BTC), plus the profit it accumulated through out the staking period, (let say 0.058 BTC) you have made a great loss.

Total of coin at the end of trade = 1.058 BTC

Worth of coin if BTC retained it's initial price= $52,900.
Worth of coin after the value drop = $31,740.

Loss made in transaction = $50,000 - $31,740 = $18,260.

Wow, that's very big. Yeah, that's a high risk product for you.

Had it been the value of BTC rose to $80,000, profit you would have made is:

Profit made in transaction = $80,000(1.058) - $50,000 = $34,640.

This further goes on to prove that the higher the risk the higher the gains. In that same vein, the higher the risk the mighty the fall.

Binance offers a range of high risk products to their customers. Some of these products are:

Liquid Swap

DeFi staking

Dual investment

1. Liquid Swap:
   In liquid swap, investors can provide liquidity to any of the liquid swap pools available in Binance. These pools generate profit through trading fees. The major risk that is common in liquid swap are losses which the investor that provides the liquidity experiences due to temporary fluctuations in the conditions and values of the assets in the pool.
   Providing liquidity to unstable coins comes with greater risk than providing liquidity for stablecoins. This is because unstable coins have high volatility, and easily changes in price.
2. DeFi Staking:
   Another high risk product in Binance is staking in DeFi project. Each time a user stakes in these projects he earns reward. Thanks to Binance, investing on DeFi projects are both safe and simple. It is safe in the sense that Binance chooses the legit DeFi projects with low risk for its users.
   To set up a DeFi staking simply requires locking your coins on Binance, and soon enough, you begin to earn rewards.
3. Dual Investment:
   Unlike other high risk products whose yield depends only on one asset, In Dual Investment, the returns of investments are dependent on two different assets or currencies and the APY (annual percentage yield). These two investments are classified into strike price and settlement price.
   Strike price is the amount you invested. It determines which currency you will receive at the end of the investment period if the transaction is not profitable.
   Settlement price is what you predict the coin you staked will be worth after a given period. It determines what you be paid in settlement, and also the currency you will be paid in if there is the investment makes profit as you predicted.

Pixabay.com: risk

Using the Example above, the strike price is 1 BTC, while the settlement price is $80,000 and profits is 0.058 BTC. If the investment is profitable, you will be paid 84,640 (which is the value of the 1 BTC you invested + profit) in dollars (not in the BTC you invested). But if the value of the coin doesn't reach or exceed the value you predicted, you will be paid back your strike price plus profit (I.e 1.058), in BTC. Just as explained earlier this 1.058 BTC is actually less than the 1 BTC you invested.

LAUNCH POOL

One of the ways of earning money on Binance is through launch pool. From time to time, Binance announces new coins and suggest to it's users to farm the coin. The users in turn farm these coins by staking their BUSD or BNB on them. These coins listed for farming have already been reviewed and proven to be legit by Binance, this makes it a more safe investment.

Most of the coins that have been suggested in time past by Binance have always turned out profitable when they are finally listed in the market, for this reason, most moderate risk tolerance investors don't waste time in partaking in launch pool.

Question 3: Show and give detail on how to set the investment you chose in Binance

As I mentioned earlier, I consider binance saving, (flexible savings to be precise) as the best way to invest in Binance as it comes with moderate risk. I will be explaining in detail how I set up a flexible savings using Binance.

I use the andriod version 1.38.2 of the Binance app. Although the interface may vary if you use a different version, the processes are the same. I will be using red arrows as major pointers while the blue circles represent thinks to check out for so as to know you are in the right page.

Step 1:
First thing I do is to open the Binance app. When the homepage comes up, I scroll down to where the more symbol is, then I click on it.

Screenshot from my Binance App

The more symbol redirects you to the service page which contains all services offered in the Binance app arranged in sections.

Step 2:

I Scroll down to "Finance", there i will find "savings". I then click on it.

Screenshot from my Binance App

When the savings page opens you will find an interface asking you to choose between flexible and locked (or fixed) type of savings. You will also find several coins you can save regardless of what saving type you choose.

Each of these coins vary in their interest rate. High volatile coins like BTC and BNB have lower interest rate than stable coins such as BUSD and the USDT.

Step 3:
I select "flexible" and then click on the "subscribe" button which is below the coin I wish to save. (Since my coins are already in BUSD, I clicked on the BUSD subscribe button).

Screenshot from my Binance App

After clicking on the BUSD subscribe button, you will be redirected to an interface where you will be asked to input the amount of coins you wish to save or "subscribe".

Step 4:

I type in the amount, (in this case 1 BUSD), tick the Binance savings service agreement box before finally clicking on the "confirm purchase" button.
(As of the time of this post, the estimate annual yield of BUSD is 5.06%).

Screenshot from my Binance App

Moments after clicking on the "confirm purchase button", you will receive a confirmation message telling you that you subscription was successful.

Step 5:
To check my savings and their earnings, I click on wallets, on the symbol circled below,

Screenshot from my Binance App

Then, on earn. This opens the earn interface showing the progress of my subscription.

Screenshot from my Binance App

Since savings is flexible you can withdrawal after 24 hours of savings by clicking on ongoing subscription as shown above.

Step 6:
After clicking on the subscription, an interfacing showing your balance pops up.

Screenshot from my Binance App

(You can select the autosubscrise button as the app can help you subscribe at automated intervals)

To withdraw, I scroll down to the end of the page and click redeem.

Screenshot from my Binance App

Note:- Since is not up to 24 hours since I made the savings, I won't be able to Redeem yet.

In conclusion, regardless of the level of risk tolerance you have, binance has an investing opportunity that has been model just for you. So, instead of just buying up cryptocurrencies and waiting for their values to appreciate, you can easily explore these opportunities and make your money work for you.

Thank you so much Professor @fendit, I learnt a lot from your lesson.

REFERENCES

Launch Pool

High risk products

flexible savings on Binance

Binance Earn, fixed and flexible savings