Whenever someone asks me how to get exposure to cryptocurrency in the current times, I ask them a series of questions.
Do you want to be in this for a long time? What is your timetable?
How much working capital do you have?
And finally. Have you used Ethereum before? Do you have time and desire to learn how all of these systems function?
My favorite part about asking these questions compared to 2017, when I was also fielding these questions, is that I now have answers for all different responses.
Interest rates have declined steadily over the past few decades, making it difficult to earn significant passive returns on your assets. The national average for a conventional savings account hovers approximately 0.07%, with high-yield savings accounts still settling short of even 1%.
The amount of growth and ease of use in UI/UX and capabilities to use your phone for many platforms has exponentially grown since the previous cycle. The game has changed; it’s not all speculation, and real passive yields in multiple risk tiers are achievable with a bit of tech-savviness.
Low Risk/Low Effort (up to 4%)
For the cryptocurrency beginner, getting set up with an exchange and setting up recurring buys is low effort, but what if you aren’t entirely sold on Bitcoin or Ethereum as a store of value or a speculative asset?
Coinbase is now offering USDC staking rewards, which are now live. So if you have money sitting in your traditional savings account, you can open up an account on Coinbase and deposit your USD to begin claiming up to 4% interest APY, which is roughly 8x higher than the current national average in a high yield account.
While this is not FDIC insured, Coinbase has an impeccable record, and USDC is fully audited and backed 1:1 in US currency.
This option can be completed from your phone in 10 minutes after your bank transfers your funds.
Low Risk/Medium Effort (Variable: currently 5.18% APY)
Another possibility requires more know-how but increases the yield over Coinbase since they are providing the leg work. Still using either USDC or DAI (a stablecoin managed through Maker), you can use either Alchemix or Yearn Finance.
Both of these platforms are yield aggregates, which means your deposited funds change protocols to optimize the yield by finding the best opportunities in the market—the user benefits by socializing gas expenses and frequent compounding of your principle. All of this is “set and forget” until you need to withdraw your assets. I prefer Alchemix in this situation. It gives you the flexibility to borrow against your capital without drawing from the vaults if other opportunities arise; in exchange for a time lock on your assets.
Medium risk/High Effort( Variable: 4% for lending APY & LP fees/ 11-18% platform rewards)
The next opportunity is providing four different stable currencies to Curve Financial. Curve offers the ability to convert similar assets. So if someone needs USDC but has DAI( which are both pegged to USD ), you can convert them quickly and for a great rate on Curve.
By providing USDT, DAI, USDC, and alUSD, you earn interest and liquidity provider fees (you can use Curve to convert to those you don’t have). While this takes on more risk because you hold different types of less battle-tested stable coins, the rewards are substantially higher. Also, converting into equal portions of each asset is more time-consuming. I am using this method currently and
Programmable money makes things interesting—the ability to use your capital for two different systems based on where the demand is. If there is high volume exchanging between different flavors of stable coins, you can earn more liquidity providers fees, and that is where the capital is allocated. If the volume is low, assets are kept in yield vaults.
With this service, you are earning interest on the capital as well as receiving protocol tokens from Curve and Alchemix. This setup allows someone to get crypto exposure without having to purchase volatile assets.
Choose Your Path
Cryptocurrency investment is a long, arduous journey full of surprises. Baby steps give you sound footing to grow your knowledge and keep risk minimal. Lending gets you into the space and learning without exposing you to the volatility if you aren’t ready to leap. There are negatives and positives to each route, but anything is better than the .05% APY you are getting now.
If you have any questions, leave a comment or join the conversation in Discord, and I can clarify anything you need.
The range is narrowing a bit.
The free supply of exchange held ETh and BTC is decreasing.
US child tax credits will start hitting banks on July 15th (I think we all know people won’t spend it on their children🤑).
Uniswap Goes Live With ‘Early Alpha Product’ on Optimistic Ethereum
The third iteration of Uniswap, the world’s largest decentralized exchange (DEX), has been deployed to Optimistic Ethereum (OΞ), a layer two scaling solution for the Ethereum blockchain.
Described as “a critical step in scaling DeFi applications,” the launch is, however, a limited one–in a blog post on Tuesday Uniswap warned users to treat it “as an early alpha product.”
Coinbase Wallet Adds Support for Ethereum Scaling Solution Polygon
Coinbase has announced that both the mobile and desktop browser implementations of its digital wallet now support decentralized applications (dApps) based on the Polygon (MATIC) blockchain.
Formerly known as Matic Network, Polygon is a layer 2 solution built to drop transaction times and costs on the Ethereum network. It is also compatible with Binance Smart Chain and any other Ethereum-compatible network. Polygon also has a native token called MATIC, which is used for governance, staking, and gas fees.
ShapeShift to Shut Down, Airdrop FOX Tokens to Decentralize Itself Out of Existence
Crypto trading pioneer ShapeShift is closing its doors, handing over its legacy to a decentralized autonomous organization (DAO) controlled by holders of its FOX token.
As it begins a months-long process of closing up shop, it will begin by airdropping $98 million in crypto to decentralized finance (DeFi) investors across multiple blockchains (more on that value estimate below).
ShapeShift’s CEO Erik Voorhees explains why his crypto exchange’s move to DeFi protects consumers. And why Coinbase, readying for its IPO, received such a high valuation.
Founded in 2014 by Erik Voorhees, the Colorado-based ShapeShift announced today that it will begin winding down its operations as a formal company. Currently employing 65 people, ShapeShift will have no employees, no bank accounts and no CEO in somewhere between four and 12 months’ time, according to Voorhees.
That’s all for the free weekly Crypto Crier. If you enjoyed this article, please like and share. If you have any questions, please leave a comment, and I can answer your questions further. As with all of my writing, this is not financial advice and is my opinion. I cannot stress enough how important it is to do your research on all financial endeavors. I hope that these newsletters can help investors realize the current financial systems’ downfalls and usher in a more equitable system without middlemen.
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