One of the attractive concepts in crypto and real life is yield and ROI. To put it simply, how does this work in crypto? You deposit your money into a pool and earn some percentage back, based on how much you've deposited.
It's simple, but what makes it even better?
It is one of those ways to make decent returns for doing absolutely nothing except for your money that is at stake (pun intended).
The average person is only productive for about 12 hours per day and spends the rest of their time sleeping or resting, and they cannot maximize that "rest time" in any money-making opportunities unless they are actively earning while sleeping, which is why the concept of ROI and yield is so appealing.
However most yields that are real, sustainable and long-term don't really offer so much whether it's in crypto or real life.
In 2021, DEFI was one of those crypto narratives that promised high yields with liquidity pools and so on, and everyone rushed to it, but DEFI is no longer a narrative that can survive one crypto cycle, as it is mostly dead today.
When compared to the cost of owning a home, real estate does not provide a particularly attractive ROI. Most houses in the rental market (regardless of country or location) should take 20 to 50 years to pay off their initial costs.
We must also consider the cost of maintenance and repairs over that time period, as well as the possibility that the property's owner will be deceased by the time the house finally pays for its initial cost.
However, we must understand that a property provides financial security and appreciates to some extent, even if not enough to cover the cost of inflation on the property's price.
However, owning a rental property and earning income is not comparable to farming yields on a CEX or using a stable coin to earn APR on a CEX. liquidity DEFI pools have proven to be unstable and dangerous, particularly in untrustworthy environments.
However, let us face it: some yield opportunities are both appealing and nearly impossible to pass up.
Take a look at what Binance is offering for Holding Hive: a massive 40% returns. It is like a dream: your money works for you. Binance understands that this will appeal to ROI farmers, and many people will be unable to resist it.
Some people may now believe that Binance obtains liquidity from Hive in order to pay a significantly higher ROI. Of course, if it comes from here, it raises serious concerns, but this is strictly business on Binance's part, and it is done solely for profit.
In reality farming yields on a CEX with such a high ROI is profitable. With 10k Hive you could earn up to 5k Hive per year, and probably about 417 Hive per month (thereabout).
However this percentage will fluctuate.. A lot of users are already taking advantage of this. I mean, they can actually increase their Hive holdings and eventually multiply them during alt season. It appears to be a very smart plan, but there is one minor issue: Binance is a CEX, and you do not own your CRYPTO if you do not have the keys.
I held 1k USD on Binance in 2020 and I wasn't even comfortable with it, even though it wasn't there because I was farming any yield, and I made sure to remove it quickly. In short, a CEX is unpredictable, not to mention the potential for instability.
I know Binance is the most trustworthy CEX out there, but a CEX is a CEX, and if you have a minor issue with KYC, a banned country, or VPN, it can take a long time to recover your account. However, this could be because I do not know Binance well enough, but if it is not HBD, I doubt I will trust any other opportunity to earn ROI on stables.
Finally
This is not to say that there are not genuine yield opportunities out there; it is probably just me being old-fashioned and crude. However, the golden rule for me remains: use only what you can afford to lose.
At the moment I don't have much I can afford to lose. However, keep in mind that there are numerous retroactive opportunities available that can earn you a return on your investment.
Most of the time, people will make decisions based on the percentage of yield and the pool's safety. What we have here is safe, but there are those who want to quickly earn massive dividends for their money, as the goal is to make more money in a shorter amount of time.
Interested in some more of my posts
