Source

Introduction

I am pleased to participate in your class and also homework Prof @fendit. I was amazed to see the impactful lecture from your class and coincidentally, I've been using Binance app without paying attention to some of this details which would ordinarily give me some passive income. Thanks for this class Prof @fendit...

My Risk Aversion

For every investor out there, there is always a level of risk set aside in which they can contain on a daily/weekly/monthly basis which guides them on when to retreat or go on when market goes south. The essence of this guide is to avoid heavy loss of assets from trade especially when emotions come into play in a quest to recover lost grounds/assets. The level of risk intake is dependent on some factors which can be attributed to the level of liquidity in portfolio, professionalism and confidence gained from the use of different trading tools/Technicalities.

After a critical look of my activities and how I have managed risk related issues before now, my risk aversion is the MODERATE TOLERANCE TO RISK type. I tolerate a certain level of risk with a mind set to make out the modest kind of income from it not minding where the trade heads to. I wouldn't want to earn little by being conservative because I see it as time wasted in waiting for either loss or profit which are all infinitesimal, instead I brave up to been moderate which looks a lot considerate and measures up for the wait if successful.

Considering my risk aversion, there is also need to look at for investment which may suit my type of risk level and tolerance in the trade. From the lecture given, there are three (3) specified passive income earning products available for all risk aversions below;

• Flexible Savings.
• Fixed Savings
• High risk products (DeFi, Dual investments etc)

FLEXIBLE SAVINGS

Just as the implies, it is flexible in all its deals with total control of asset by the investor at any point in time. Invested amount can be redeemed at it pleases the investor considering the little profit gained from trade which seem satisfactory to him. But this kind of savings is seen to come with smaller percentage interest rates or what is known as annual pay yield (APY). I think this is similar to the usual conventional saving accounts seen in our normal banking system where we can withdraw our monies at will and without notice. The interest is very small (pegged at 3%/annual) that many do not prefer leaving ideal funds in them as soon as they are needed.

So back you flexible savings, Interest calculation in the flexible account starts counting after 24hrs of stake, which is probably on the second day. Due to the flexibility of pulling out funds, interest rates are distributed daily directly into your wallet. In addition, interest rates paid into accounts daily are guaranteed despite the beerish and bullish trends experienced in markets.

How Do I set up my Flexible Savings Plan

• Go-to your Binance app already downloaded in your mobile.
• From the interface, click on the icon Binance Earn
• Click on the "Flexible Savings" icon on your top left screen

• Choose your preferred asset from the list you wish to start exploring
• From the new interface input the amount to be saved

• click on terms and agreement before clicking on the "transfer" icon.

FIXED SAVINGS

Unlike the flexibility seen in the flexible savings which guarantees access to redeem assets at will, fixed savings are locked for a period of time as stated without access to redeem assets at will except when the due date placed has elapsed. It comes with commensurate increased percentage interest rate, higher than what is obtainable in the flexible savings with lower risk level.

I can remember having a fixed deposit facility in one of the commercial banks years back, this is a typical example of a fixed deposit account. Interest rate is usually higher with different tenor days compared to normal savings. In Binance tenor duration for fixed deposit is seen to be from 7 - 90 days.

How Do I set up my Fixed Savings (Locked savings) Plan

• Go-to the Binance app as downloaded i your mobile
• Click on the Binance Earn icon on the interface, just as indicated.

• Click on the Fixed term icon as indicated in image
• Click on your preferred tenor/ duration and also on preferred asset.

(Note: Tenor/duration determines the percentage APY. The more the duration, the more the percentage APY)

• Input amount to be locked/fixed
• Click on the terms and agreement box
• Then click on the "confirm transfer" icon.

HIGH RISK PRODUCTS

Unlike the flexible and locked savings as mentioned above, high risk products are passive incomes with high risk level and great yield potentials. Yes, they are risky to venture into due to the volatility and high loss of assets involved but it also have it great side which is high potentials in bringing in larger profits. Like people would always say, big money returns in profits requires bigger risk level tenable. In Binance high risk products are seen in this categories; Dual investment, DeFi staking and Liquid Swap.

For Dual investment product, it allows the investor to earn from either outcomes of his stake in the trade. More yield tend to be seen when the stake is attended to unlike when it is not achieved. In Binance Dual investment product, the investor only deposits an asset during investment but earns two assets in return irrespective of the market outcomes. Market trends which may either be beerish or bullish would cause an achievement of strike price targeted or the reverse, but in which ever way the investor is seen to go home with something.

For Example; If I invest 1BTC in the dual investment on a 30day duration tenor and at 30% APY with a strike price of achieving $100K at the end of the month (Assuming the second asset is USDT). My expectations for this market outcome are categorize in either sides;

(a). If The strike price is achieved, that is if 1BTC attends $100K and above before the end of the 30days duration tenor.
I will be have 1BTC worth now in USDT plus my interest also in USDT
(100,000 * 0.30)/(365 / 30 )= 30,000/12.16 = 2,467USDT
Therefor at month end i should have = 100K USDT + 2,467USDT
Total yield expected = 102,467USDT

(b). If the strike price isn't achieved, that is if 1BTC did not attend $100K before the end of the 30days duration tenor.
I will get back my 1BTC value just as staked plus interest rate in same value.
(1BTC * 0.30)/(365 / 30) = 0.025BTC
Total yield expected = 1.025BTC

For me, I think this risk is worth taking irrespective the high market volatility. Either ways it goes can still be cool by me.

Liquid Swap on the other hand, allows investors or users to provide liquidity, such as lending into a pool and in return are paid interest for providing liquidity. Remember that cryptocurrency market are highly volatile and this greatly affects the value of liquidity provided in terms of returns made. Mostly, stablecoins are hereby encouraged in the pool to enable it retail value of coins in pool.

(Liquid swap)

BINANCE LAUNCHPOOL

For setting up my investment in the Binance exchange, i think using the launchpool is the great deal in this perspective. The launchpool allow users to participate in token farming whereby the BNB or BUSD or any stablecoin/coin as stated are staked in the pool for a purpose to farm newly launched tokens. When projects are newly launched in the pool, this is a way of creating liquidity by staking and hence farm over a period of time to redeem tokens given to the volatility of market at that given time.

It also allows users to unstake their funds and reinvest if need be in other pools of interest. That is to say, it creates room for flexibility without locking up assets. Same User account may not participate in two different pools at same time by staking same BNB except when this BNB is divided in fractional proportions (say 50% to pool A and 50% to pool B).

How do I Set up My Launchpool with my Binance account

• Login to the Binance site or into your Binance exchange mobile
• From the interface click on the "launchpad" icon

• Choose the project of interest
  Note the custom allocation allows you to easily allocate funds into different pools.
• Input the amount of token to be staked and click on stake.

I can say for sure that going through this task was really worth the knowledge given to the lucrative investment products in the BINANCE exchange that perhaps brings about passive income. In all, our risk tolerance level should be one that guides us to trade accordingly to avoid going south.

Thank you all for reading through my article. This is my entry @fendit for your homework task.

All screenshots are from Binanace Exchange app