Cryptocurrency platforms start to yield profits from holding and depositing, banks should be scared
The traditional method of profit-taking in the cryptocurrency sector is still largely around price increases. People hold and trade BTC so they can benefit from the increase in the price of the asset. However, with DeFi platforms gaining traction, the paradigm is beginning to change.
Profiting is becoming a common practice with many platforms offering rewards to users if they bet or lend crypto assets on the platform. Platforms like Compound Labs allow users to borrow and lend cryptocurrencies at rates determined by the algorithm running under the platform. With crypto profit farming, the returns are in the form of annual percentage yield (APY) and sometimes in the form of new tokens.
Famous twins Tyler and Cameron Winklevoss are also launching a new service on their beloved cryptocurrency exchange Gemini called “Earn”. The idea behind it is the same, rewarding customers for sending and holding cryptocurrencies. The Monetization Service allows the audience to deposit their holdings in BTC and other cryptocurrencies into interest bearing accounts. Make money promises up to 7.6% APY while another startup, BlockFi, is offering a massive 8.6% APY. Trends have penetrated the market. Another project that is currently providing profits from holding cryptocurrencies is LCMS.
Bithumb Global recently announced a deposit and trading event for LCMS coin on its Twitter controller. This event offers 20,000 USDT as the total amount of the prize. 6,000 USDT is allocated to LCMS depositors and holders while 14,000 USDT is reserved for trading the same asset class. The highest prize for anyone in the event is 3,000 USDT followed by a prize of 2,000 USDT respectively for the 2nd and 3rd place. The reward will be given to those who are in TOP 500 range. However, in order to achieve this reward, users must pass KYC2 verification. The event is coming to an end as April 6 is the last day of the event. This is just another example of how the crypto bonus model is slowly shifting to encouraging people to hold and trade cryptocurrencies.
Savings in the Bank vs. Profits from Cryptocurrencies
The world of cryptocurrency has emerged to compete in the form of the banking system. Whether it’s deposits or transactions, banks have made themselves an essential part of everyone’s financial lives. One of the biggest advantages banks grant their users that no one else can crack is the profitability of holding money. Savings accounts are often used by people to earn interest on their deposits. This encourages people to deposit their money in the bank when they expect a return. With cryptocurrencies, things are different.
People have always been fascinated by the cryptocurrency sector due to the skyrocketing prices. Within a decade, bitcoin has skyrocketed thousands of times, attracting more and more investors. Bitcoin’s 2017 surge has made cryptocurrencies stand out in the eyes of investors, and the recent bull run is the bull run that makes BTC the legal asset. Currently, the asset is trading at $ 59,860 while it is predicted to go up soon. JP Morgan adjusted its bitcoin price target to $ 130,000 as they are expecting strong institutional support in the future. So, traditionally, the kind of returns people have come to expect from cryptocurrencies come from rising prices. However, this only attracts a certain part of investors.
To attract risk-averse populations, the need is to bring people steady returns, like banks give them with their savings accounts. This need is currently being met by the platforms mentioned above. Take LCMS as a use case. To earn rewards with just one deposit and trade is a big incentive for people to come to this space. When people step into its ecosystem, they also have to learn about the platform. LCMS uses blockchain to manage customer databases, develop joint products, and share ideas mainly in the food and cosmetics sectors. LCMS coin is a valid unit of value on the platform.
Profit sharing – Real decentralization
The fact that platforms are now sharing profits with customers is commendable. The whole idea behind the cryptocurrency world is decentralization and human empowerment. Crypto enthusiasts have always talked about disrupting decentralization and central government and putting people in a position of reward and power instead of milking them as users. This idea of profit sharing is completely in line with the core philosophy of cryptocurrencies. Giving back to people is the main topic. With platforms like Compound, Earn, and LCMS in those profitable through betting or events, the banking system is more challenged than ever.
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