The “After-sleep Income” in the Crypto Community
For young people, “after-sleep income” has become one of the most frequent topics of conversation. Since the COVID-19 outbreak, we have witnessed many black swan events. People may lose their safe job and steady paychecks at any second. Increasingly, folks realize that a single source of income just wouldn’t do. To feel more secure, we ought to find a way to expand our income sources, and “after-sleep income” might be one of the best ways to achieve this.
What is “after-sleep income”? From an economic perspective, “after-sleep income”, also known as passive income, refers to money that goes into your pocket without much effort. Simply put, it is an income source that keeps generating gains yet requires little time or energy, whether you are eating or sleeping. In the space of traditional investment, “after-sleep income” covers rent collection, copyright, automatic investment plans, etc.
Now, how can we generate “after-sleep income” in the crypto community?
The trending DeFi is one approach. Spanning yield farming, leveraged mining, single-token stake mining, and crediting, DeFi is like a magical Lego world with hundreds of mechanisms and motivating APYs of up to 100%. For veteran investors, DeFi mining is a stable source of great joy and reward. Yet it is also undeniable that DeFi is an exclusive game with few investors. Though most people have heard or even discussed DeFi, few have tried. Newcomers to the field are subject to high risks arising from uninformed DeFi investments, such as impermanent loss, liquidations, hacks, shitcoins, and mining collapses.
For average users of the crypto community, CeFi remains a more familiar and appropriate choice. Ordinary investors looking for stable earnings are generally confused about the candlestick chart and cannot withstand the capricious secondary market with constant ups and downs. For them, it is important to maximize the value of the existing assets. The same is true for long-term value investors and holders who are confident of the crypto prospect.
As such, low-risk crypto wealth management with stable gains has become a rigid demand. Demand creates a market, and the market offers solutions. Centralized exchanges have launched their wealth management products for cryptocurrency to help crypto investors generate “after-sleep income” using idle assets.
The Balance Management Services in the Crypto Community
Currency-based wealth management is familiar to most people. Eight years ago, the impressive debut of Yu’ebao, a balance management service provided by the Chinese e-commerce giant Alibaba, injected new vitality into the conventional investment market and popularized the basic knowledge on wealth management. The concept of wealth management through idle assets has become well-known. Major exchanges such as Binance, Huobi, Gate.io, and CoinEx have launched token-backed wealth management products, which can be seen as the crypto version of Yu’ebao. They do not require complicated financial know-how or constant focus. Once the assets are deposited, users can reap the profit without further concerns.
Single-token wealth management products normally derive their revenue from leverage interests: users lend out their crypto holdings for token interests. Cryptocurrencies supported by platforms generally include mainstream tokens like BTC and ETH. Similar to conventional wealth management, crypto wealth management also features fixed deposits and flexible deposits. Below are more details about these products from the example of two leading crypto exchanges: Binance and CoinEx.
Binance Savings has been growing for a long time since its early launch. Backed by the global leader Binance, the product boasts ensured security and stability. There are three wealth management modes on Binance Savings: flexible savings, locked savings, and activities. The APYs of locked savings and activities far exceed those of flexible savings. Regarding amount limits, Binance Savings comes with no deposit threshold and a high upper limit, which is more than enough for average investors.
Now let’s take a look at the choice of most users: flexible product. A total of 121 flexible projects are available on Binance Savings, covering a wide range. In terms of the top concern, the seven-day yields of mainstream tokens BTC, USDT, ETH, and BCH are 0.5%, 1.2%, 0.24%, and 0.82%, respectively.
How about the emerging industry leader CoinEx? Its products also profit from margin trading loan interest on the platform. 70% of the interest will then be distributed to users according to their holdings, thereby securing the principal and interest. Moreover, the interest is calculated on a compound basis. Compound interest could go beyond everyone’s imagination, as put by Einstein: “Compound interest is the eighth wonder of the world. Its power surpasses that of an atomic bomb.”
At the moment, CoinEx only has flexible products. Like Binance, there is no minimum amount. On CoinEx, the on-demand deposit and withdrawal of assets secure the liquidity of assets. Though cryptocurrencies supported by CoinEx’s product are less diverse, they are all premium and mainstream value tokens and the most widely held ones, adequate for the basic needs of wealth management. In the future, CoinEx will roll out more cryptocurrencies in line with market demands.
From the above table, it is clear that Binance comes with slightly higher APYs of BCH and LTC, yet in terms of all other cryptocurrencies, the yield rates of CoinEx are far higher. On CoinEx, ETH, ADA, and EOS yield twice more than in Binance, and the former has an absolute advantage in USDT.
In addition to the superior APYs and easy operation, CoinEx is also known for its security. Putting these together, CoinEx does seem to have taken the upper hand in wealth management products. Free from all the flamboyant functions, CoinEx’s products are friendly to both laymen and experienced crypto investors who favor mainstream tokens.
CoinEx has never disappointed users, and in this sense, such performance conforms to the expectation. The exchange has made great efforts to explore innovation, a factor that has always remained the inner driver of its rapid growth. For instance, CoinEx had demonstrated its vision and innovation capacity when it set the precedence of integrating the AMM model of decentralized exchanges with the order book model of traditional centralized exchanges. The exchange has also adopted many new measures, including the digital wealth management function that features steady earnings, easy operation, security and stability in response to user demand, addressing all the pain points of users.
As for the wealth management products of other exchanges like Gate.io, though there is great diversity, nearly all of them require lock-up, which compromises the liquidity of assets. Plus, the APY is also not that appealing.
The classic quote of “Beware of the risk before making any stock market investments” applies to crypto trading. Too many people are drawn to the market by the enormous profit, only to suffer huge losses. Some even place orders before making a full investigation into the risks and mechanisms of the leverage contract. Unlike professional traders and quantitative institutions, ordinary investors will find products like the leverage contract and futures trading too complicated and too risky. The shortcut to mass profit in an uncertain market might be holding tokens and investing them in wealth management products with compound interest for steadily growing earnings.