Understanding Your Long-Term Investment Options for Crypto
If you’re interested in investing in the crypto world, it’s essential to understand the utility of your token and your options for long-term investment to generate rewards. Depending on your financial goals, you may want short-term or long-term investment options.
Many cryptocurrencies out there today will offer users the ability to either stake or farm their cryptocurrency to generate rewards over time. Here’s a closer look at these investment options and how you can start growing your investment today.
Staking your cryptocurrency is a great long-term investment option that could generate up to 10%-20% back on your investment.
Staking is only available through proof-of-stake blockchain networks, which utilize users and their personal machines to verify transactions throughout the network.
Any coin holder on a proof-of-stake blockchain network can become a node in the network and get a chance to be selected to verify transactions in exchange for rewards.
Coin holders must stake their investments with a specific stake pool in order to improve the likelihood of that node being selected for verification. Once you enter a stake pool, your coins are locked into that pool for a certain amount of time through a smart contract.
Many new blockchain projects like the new FTX Token are built on these proof-of-stake models, which are more sustainable than traditional proof-of-work models.
Staking FTT or any other cryptocurrency could provide you with sizable returns over time as the blockchain and your stake pool continue to grow and perform continuous verifications.
Also known as liquidity farming, yield-farming is another excellent option for generating rewards on your crypto investment throughout an extended period.
Yield farming can be done regardless of the blockchain model the network is based on but does require the use of dApps for investors to access and enter the liquidity pools. When you enter a yield farm, your investment is locked through a smart contract for a specific period.
During this time, your coins are lent out to borrowers on the network in exchange for rewards in the form of fees, interest, or new coins. As with any form of lending, there are always risks involved with joining a liquidity farm.
However, you can check the health of a liquidity pool by checking the total amount of coins locked into the pool. The more TVL (total value locked) in the pool, the more likely successful farming will occur.
Benefits of Holding
Besides entering your coins into a yield farm or a stake pool, you can also generate rewards on your coins by simply holding your investment. Holders of the new FTT token will receive regular and random airdrops of the SRM token to encourage them to utilize the new Serum DEX.
Airdrops are a fantastic benefit used to promote the launch of new crypto tokens or other blockchain projects. Not only will you receive crypto for free, but FTT holders can also benefit from fee discounts throughout the FTX platform.
Before you invest in any cryptocurrency, explore the benefits of holding that coin over time and see if there are any additional perks for you.
If you’re interested in making a long-term crypto investment, consider your options for generating rewards through staking, holding, or yield-farming. There is a ton of opportunity to generate returns on your investment; the sooner you get started, the more you can earn.