How to invest Bitcoin(cryptocurrency) and earn best yield. (Take BNB as example)
More people heard about cryptocurrency now but it’s hard to make correct investment to maximize the investment. Many street gossips that tries to convince you to invest in the wrong coin. Take Bitcoin for example, you will be benefit from the rising of Bitcoin price or suffering from the price dump, just like the stocks you invested. On top of that, you can still get dividends like traditional stock market for sure. Once you “invest” your Bitcoin or cryptocurrency somewhere, you get the cryptocurrency back as dividends as well. Of course, the risk involved is different and the knowledge to invest is also different. For example, if you buy/sell in Binance with Binance Token(BNB), you can re-invest BNB within Binance to get your dividend, probably in different cryptocurrency depends on the program. Or you can invest your cryptocurrency into Decentralize Finance “DeFi” then get crazy dividend yield in DeFi. I learn my way out from a beginner, therefore, I would like to share what I knew and make a comparison here. What is the best way to earn crazy yields in Cryptocurrency. I compare the different yield that i get from Binance and PancakeSwap DeFi exchange with same BNB token. You could basically do this with all cryptocurrency but that involve different knowledge to do so. For example, pure Bitcoin didn’t support DeFi now, therefore, more steps are needed to transform it into “DeFi” compatible format.(Aka transform it into compatible DeFi format on DeFi blockchain)
A 5sec version. If you have experience trading through Web Wallet like MetaMask, it usually generate higher yield(with higher risk). It will however need more knowledge/experience/cost (using ETH blockchain is more costly in transaction, therefore, I use BSC”Binance Smart Chain”blockchain)to do it, and it usually comes with higher risks of losing money. If you simply use Binance native platform, it is easy to operate, low cost with lower yield .
Several ways to earn interests in Binance, you could save cryptocurrency in “Binance Earn”, you could still choose to attend Launch Pad and Launch Pool. There is detail explanation how it works when you click in, and I use my real data to compare the yield difference on “launch pool” within Binance as a baseline.
Launch Pad is to calculate the amount of BNB you owned and make a lucky draw(Max 500BNB~10 tickets) to decide winner. Each winner will be eligible to buy new coins by deducting BNB amount in your account, so once the “new coins” are available for trade, you can sell your “new coin” to gain profit. Each winning ticket can buy approximately $200 worth of “new token” and it’s likely to have ~50% gain. Sometimes it will be lower if you sold in wrong time. Sometimes higher. It’s like destiny. :)
Launch Pool, on the contrary, is to distribute “new tokens” to users who had been staking coins that are requested.(usually BNB,BUSD). In the staking pool, each user will be rewarded with “new coins” by percentage. On the picture below you saw few information like (1) You stake BNB token to get UNFI”the new token” (2) current distribution progress and APY(Annual Percentage Yield, which is changing real-time) and (3)A different pool. Since it’s a new token and never been traded before, there is no reference price in trading. You might get 2x~3x pump or dump.
You can see that the share in each pool is different and yield is different. General speaking, the more risky approach you take, the more reward you might have. You saw on (3) that the APY is much higher by staking “KAVA” but “KAVA” token has much more variation than BNB. It’s easy to invest this way, as long as you get account in Binance. Simply few clicks in Binance app once you have your own cryptocurrency, just like how you bought stocks. In some countries, Binance can link directly to your bank account, therefore it works almost the same as buying stock. In some country, you will need to buy cryptocurrency first then transfer to major exchanges like Binance to do trade(or earning program).
If you are an experience trader and have time to dive in and evolve to an advance trader. You can try to use DeFi(Dencentralize Finance)。For example, in PancakeSwap below, you saw different attracting APY on different pool. You saw that in same UNFI “new token, you earn 315% APY in DeFi. Of course, the APY is adjustable by algorithm(lots of factors), therefore is unstable, still looks sexy. If you want to use Defi, you need to install WebWallet like “MetaMask” in your Chrome browser, then configure your setting to interact with different “DeFi” product. You can refer ““how to use MetaMask in Binance Smart Chain(BSC) DeFi world”。
So here is the result. In the same period of time, I invest differnt amount of cryptocurrency in Binance/Lauch Pool and PancakeSwap, which one generate better yield therefore maximize your cryptocurrency investment?(If you want to play only StableCoin, please refer to StableXSwap on BSC “Binance Smart Chain”)
I give you the most honest-straight-forward result. In PancakeSwap, you invest less with higher return, however, it takes more steps and time and knowledge with greater risk. Risks involved in the value dropping of “Cake Token” and trading lost. In Binance , the trading cost less and value of “BNB token” might be more stable, but it generate less yield. You can see how powerful the 300% APY can contribute but it’s unstable APY with higher chance to lose money if you don’t know the principle of how it works. Well, for me, it tooks me weeks to get to know it, and still losing money. :(
Following is a screenshot of information page of Binance and PancakeSwap. If you do have time to invest in DeFi like PancakeSwap, i am sure it could bring more profit. However, do your own research and only risk the money that you can afford to. You might earn money but you definitely will lose more when you fall into wrong trend!!
That’s it. I want to make it simple and short for beginners to understand. It will be great if there is any feedback to help me a better content!