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Golden Recommended Reading | How to Earn Encrypted Dollars?



Foreword: The crypto dollar is one of the largest current use cases in the crypto world. Blue Fox Notes found that according to the statistics of CMC, the trading volume of USDT exceeded that of BTC yesterday, which is the sum of BTC+LTC+EOS. Cryptodollars are transferred on the blockchain in huge numbers every day. So, why are there so many crypto dollars flowing on the blockchain? What benefits can they generate? Through which channels are revenue generated? Exchanges, institutions or retail investors, open financial lending agreements, automated market makers, and encrypted derivative exchanges can all generate income for encrypted dollars. These incomes are generally higher than those in the traditional world, which attracts more and more funds into the crypto world. One of the biggest drivers of new demand for cryptocurrencies is, and always will be, the fact that dollar returns can be earned many times higher in crypto than most investors in the traditional financial system can earn. These benefits are related to the crypto-economy’s demand for U.S. dollars, as well as the difficulty associated with the entry of fiat currencies into the ecosystem. The most commonly used financial services that generate dollar yields include exchanges, centralized lenders, open finance lending protocols, automated market maker models, and crypto derivatives. These services are unique, and they vary based on a number of different factors, including liquidity, counterparty risk, custody, and potential returns. One thing these platforms have in common is that they are all backed by crypto dollars. Cryptodollars come in all sizes and shapes, but the basic premise is that it is a digital asset whose value is pegged to the U.S. dollar. The most novel part is that encrypted dollars are programmable, they can be transferred to any corner of the world, and can be seamlessly integrated into any blockchain-based financial application. An interesting comparison is to think of crypto dollars as Venmo dollars — which could eventually be used in other financial applications. By far the most notable aspect of the yield-generating opportunities for crypto dollars has always been how much higher they are than the traditional space. For example, in 2019 the U.S. 1-year Treasury yield was 2.57%, while a USDC loan on dYdX yielded 4.86% p.a. over the same time frame. The premiums correlate to the fact that crypto markets have historically been bullish, but more importantly, they reflect the difficulty of putting dollars into the crypto ecosystem. Investors who need USD finance understand the rapid changes in the price of crypto assets, therefore, they are more willing to pay a premium for faster liquidity. In the early days, the only way to borrow and lend dollars in the crypto space was through Bitfinex’s margin order book. Yields fluctuate wildly, as crypto exchanges struggle to secure banking partnerships. The lack of banking makes it difficult for supply to enter the market, so when demand suddenly increases, there is not much neutrality here. Jinse Finance mining data broadcast: BTC’s network computing power rose by 0.87% today: Jinse Finance reported that according to the data from the spider mining pool: BTC’s total network computing power is 150.640EH/s, mining difficulty is 20.60T, and the current block height is 666830. The theoretical income is 0.00000674/T/day. The computing power of the ETH network is 330.799TH/s, the mining difficulty is 4268.74T, the current block height is 11689217, and the theoretical income is 0.00645854/100MH/day. The computing power of BSV network is 0.701EH/s, the mining difficulty is 0.11T, the current block height is 670746, and the theoretical income is 0.00128418/T/day. The computing power of the BCH network is 1.925EH/s, the mining difficulty is 0.26, the current block height is 671132, and the theoretical income is 0.00046760/T/day. [2021/1/20 16:34:23] To solve its banking partner problem, Bitfinex created Tether in 2014. With Tether, value representing U.S. dollars can be sent across the crypto ecosystem, investors can use it to trade against cryptocurrencies, and those without access to banking services can gain exposure to U.S. dollars by holding Tether. In 2017, Tether’s market capitalization surged by 1400%, as it was already clear that on-chain dollars could be processed more efficiently than traditional system dollars. Since then, stablecoins have gained a firm foothold. In terms of growth, stablecoins have been the fastest growing crypto asset since the beginning of 2018. In roughly the past two years, the assets with the highest market capitalization have fallen between approximately 46% and 83%, while the market capitalization of all stablecoins has increased by 464%. Source:, Much of this growth has been attributed to the fact that many new lending markets in 2018 were built around stablecoins, allowing them to be lent at high interest rates. High interest rates greatly incentivized the conversion of traditional U.S. dollars into encrypted U.S. dollars, which was evidenced by the market value growth of stablecoins in the lending market at the time, including USDC, Dai, Pax, and GUSD. Golden Noon News | November 21 at noon list of important developments: 7:00-12:00 Keywords: Argentina, PayPal, Bitcoin Fund, Ethereum 2.0 1. Argentine local councilors proposed the establishment of a cryptocurrency trading platform; 2. PayPal and Square’s average daily bitcoin purchases exceeded bitcoin output; 3.3 bitcoin funds increased their holdings by nearly 24,337 bitcoins this week; 4.a16z completed the fundraising of two new funds, with assets under management reaching $16.5 billion; 5 .The total borrowing volume of the decentralized lending market reached a record high of 3.17 billion US dollars; 6. The Ethereum 2.0 deposit contract address has received 150,464.0ETH, with a progress of 28.7%; 7.Settle Network and Stellar issued two stable coins; 8.11" Bitcoin” global searches are higher than December 2017 bull run. [2020/11/21 21:35:06] Source: From a macro perspective, the interest rate conditions in the traditional system have greatly reduced the opportunity cost associated with holding US dollars in conventional banks. There is not much to lose by converting dollars to crypto dollars. Since the start of 2018, the 10-year Treasury yield has fallen from 2.4% to 0.73%, a 70% drop in savings potential. This is just the case in the US. Some European countries, such as Germany, the United Kingdom and France, have 10-year bond yields of -0.36%, 0.3% and 0.09% respectively. The world has never been more hungry for yield. Crypto dollar gains are not entirely immune to a world of low interest rates. As the market plummeted on March 12, the USDC loan interest rate fell from an annualized return of about 4% to an annualized return of 0.45%, a plunge of more than 80%. Fortunately, crypto-dollar gains do not directly respond to central banks, but largely depend on market sentiment. If the encryption market can still maintain its irrelevance with the traditional market, then there is a good chance that the income of the encrypted dollar will continue to be much higher than that provided by the traditional world. In addition to basic stablecoin lending, there are many other more complex financial instruments that can generate income from encrypted dollars. With more complex financial instruments, there is an opportunity to obtain higher returns, but, of course, also comes with higher risks. Golden Morning News | A list of important overnight news on June 20: 21:00-7:00 Keywords: DeFi, Ketuan Zhan, Hong Kong Stock Exchange, Wallet Vulnerabilities 1. The total market value of DeFi tokens exceeded 5 billion US dollars. 2. Ketuan Zhan: The revoked official seal does not represent Bitmain, and illegal use shall bear legal responsibility. 3. President of HKEX: HKEX has never wanted to enter the field of digital currency. 4. Africa has become the second largest Bitcoin P2P trading market. 5. Okey Cloud Chain Trust's application for registration as a trust company was approved. 6. Researchers discovered a high-risk vulnerability in the Ethereum wallet Argent. 7. Qingdao Industrial Building focuses on the development of emerging industries such as blockchain. [2020/6/20] This article will introduce the most widely used channels in the encryption ecology through which users can earn dollar income, and also introduce the trade-offs and risks associated with each channel, as well as the potential benefits. Exchanges Speculation has been the most in-demand use case in almost the entire crypto industry. Therefore, the exchange has become the biggest beneficiary of the explosive growth of the ecology. As exchanges looked for ways to expand their businesses and discovered revenue streams associated with less volatility, it quickly became clear that building a vertically integrated crypto bank was the winning business model. They already have user relationships and assets, and the next step is to provide them with a full suite of financial services. After all, the crypto world is all about new forms of money. Naturally, expanding the ability for users to earn interest on their assets should not be difficult for exchanges. Users usually choose to keep their assets on the platform, and there is already a demand for borrowing on the exchange, which is conducive to the formation of a lending market. The most common opportunity to earn interest on exchanges is the margin financing pool, in which users lend their assets to speculative traders, or interest accounts, in which the exchange guarantees users a certain annualized return, Exchanges are then free to lend these assets out at higher interest rates. The former is more like margin financing in the traditional world, and the latter is more like CD. (Blue Fox Notes: CD is the abbreviation of Certificate of Deposit, which means certificate of deposit, which is a type of time deposit. In traditional finance, it is usually issued by banks or depository institutions.) Analysis | Golden disk: BTC drives the overall market rebound :Comprehensive analysis of the golden disk: Last night, BTC started a rebound mode, and the market as a whole recovered accordingly. The trend of mainstream currencies was strong, and short-term opportunities increased. [2018/8/10] Borrowing through exchanges is arguably the easiest way to earn USD yield. Since users simply send their assets to the relevant address and do nothing else, the experience is very similar to traditional banking, which most users are familiar with. Margin financing accounts are generally highly liquid, although there may be instances where all user deposits are utilized. Interest accounts, on the other hand, often result in assets being locked up for a period of time. In terms of counterparty risk, exchanges are the main central point of risk as they are the ultimate custodians of user assets. Users borrowing and lending through exchanges should be aware of potential attack vectors and preferably spread their lending activity across multiple exchanges rather than a single one. There are other new trading models, of which dYdX is one. In this model, exchanges never take custody of users' funds, even if they are on loan. From the perspective of overall risk, the risk of exchange loans is relatively low, which leads to a decrease in potential yield. Many times, however, the yield on a loan on an exchange is much higher than any user's savings account, making them a valuable alternative to taking on risk. Institutional and Retail Lenders One of the fastest growing segments of the crypto industry is the credit market, driven especially by institutional and retail lenders. These companies pool capital by guaranteeing interest rates to depositors, which they then lend to institutional or retail investors. The largest of these companies include Genesis Capital, BlockFi, and Babel Finance. The main difference between these lenders is what types of investors make up their deposit base, institutional or retail. This type of lending activity took off in 2018 as institutional investors sought more efficient ways to short cryptocurrencies. In the last two quarters of 2018 alone, Genesis Capital originated $1 billion in crypto loans from institutional investors. 2019 also led to a bull market that spawned cash lending. These lenders are seeing demand for crypto-collateralized cash loans skyrocket, and can yield dollar yields for retail investors. Based on data from Genesis’ Q4 2019 report, as well as various industry reports, we estimate that institutional and retail lenders provided over $5 billion in funding, 40% of which was in cash loans. Given their goal to serve institutional capital, these centralized lenders are extremely liquid. Most lending agreements are open-ended, which means that borrowers and lenders have flexibility in locking up capital. Yields are typically higher than those lent through exchanges, and custom terms can be negotiated for large sums of dollars. Its main disadvantages are counterparty risk and custody of funds. In these agreements, the lending company takes full custody of the loaned funds and then transfers their ownership to the borrower. In the event of a default, the lender is trusting the loan company to take the loss. Golden Finance live report Vice Chairman of the Communist Youth League Student Association in Hanoi, Vietnam: Southeast Asia will become a hotbed for the development of digital currency: Golden Finance live report, at the 2018 Southeast Asia Blockchain Innovation Summit, Mr. Henry Tran, vice chairman of the Communist Youth League Student Association in Hanoi, Vietnam, said that Southeast Asia It will become a "hotbed" for the development of digital currency. It is expected that in 2019, Vietnam will have a legal framework to regulate the development of digital currency. In the future, digital currency and ICO may also be legalized in Vietnam in the future, leading the development trend of digital currency in Southeast Asia . [2018/4/21] Loan agreement The loan agreement is a new financial innovation, which is supported by the encryption field. These platforms allow users to borrow and lend funds directly from smart contracts without having to entrust funds to a centralized third party, which is in stark contrast to today's most dominant centralized models. The key to these protocols is that they are built on top of virtual machines, and they can automate all loan management processes, from origination to liquidation, without the need for a centralized entity. The most widely used lending protocols are MakerDAO, Compound, and dYdX. Maker is unique in that its interest rate is ultimately determined by MKR holders through the network governance process, while compound and dYdX interest rates are set by the market in real time. Likewise, Maker's DAI savings rate can never be higher than the stability fee, while Compound and dYdX often offer rates above the stability fee because their protocols can adapt more quickly to speculative needs. The DeFi lending protocol is still relatively new, so it will naturally take some time for it to become as liquid as centralized lending. Two factors favor these protocols for increased liquidity: security best practices, and time. The former will help expose and innovate on the inherent weaknesses of these protocols, and the latter will help strengthen the security of these protocols (provided they can maintain their security). Since users always control their funds, one advantage of these lending protocols is their custody, which has relatively little risk of being stolen compared to centralized exchanges.


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