Cryptocurrencies Yields 70% as funding turns to leverage
Yield farming is once again being used to attract new users to DeFi and the demand for leverage is a source of high Yields Memories are proving to be very short in the world of cryptocurrencies, with Yields of 70% or higher once again being offered by trading platforms through the resurgence of the strategy The investment is known as yield farming. Less than 18 months after the collapse of the Terra stablecoin project led to an industry-wide collapse,
Exchanges ranging to Binance are offering double-digit incentives as a way to stimulate trading activity after months of stagnation. Terra, once the most ambitious experiment in decentralized finance, promised returns of around 20% to investors who deposited money into its protocol and it will always be that way. “People can’t help it [Crypto] is literally the most the industry has ever seen and the returns were Huge
Unparalleled elsewhere outside distressed securities, the technology is central to the rise of decentralized finance in 2020, which seeks to eliminate traditional intermediaries like banks. Yield farming involves lending cryptocurrencies in exchange for interest, and sometimes fees, with the bulk of rewards often in the form of units of new cryptocurrency. The market swelled to as much as $179 billion in November 2021, before a collapse led to a mass exodus of investors from digital assets. After the cryptocurrency markets soared in October and the decentralized finance sector is now worth about $44.1 billion, it began allowing users to trade Bitcoin and other cryptocurrencies with up to 50 times leverage, an incentive program. The Decentralized Autonomous Organization is behind the so-called Layer 2 blockchain that seeks to ease congestion. On the Ethereum network. Through the program,
Users earn up to 70% annual Yields for trading
Users can earn annual returns of up to 70% for trading, liquidity provision and other activities on Copy. About 12 million, or $12 million, of ARB tokens, a token, will be used to pay the additional returns. Demand has also risen as the prices offered for borrowing stablecoins such as USDC and Tether have risen more than 10% in recent days. The largest peer-to-peer lender in the… Rise in lending activity with higher demand for leverage in trading.
“Traders who want leverage need to deposit risky assets into lending protocols, borrow dollars against those risky assets,” said Keoni Hon, co-founder and CEO of Monad Labs, developer of a new blockchain called Monad. “Then they use those dollars to buy more risky assets.” The high. The demand for leverage is the primary source of return
Yield farming was once a popular way for cryptocurrency projects to attract new users in a short period of time. It has been particularly popular in the ultra-low interest rate environment during the Covid-19 pandemic. That changed when cryptocurrency prices fell and traditional interest rates rose. “It has taken some time for the industry to adapt to a system of high trading returns with low cryptocurrency volumes, and the ability to create a competitive product in this space.” Tradfi is a common term used to describe traditional finance
When there is interest in trading cryptocurrencies, which there are now recently, incentive programs exist. The largest cryptocurrency exchange, for example, is promoting a “bonus” return program through its Profit Project, where Binance offers up to 13%. From the annual revenue of users who hold their stablecoins USDT on Binance. For up to 500 USDT, Binance will offer an additional 7% returns on top of interest rates of 5.93% on USDT savings.
Leverage is increasing in cryptocurrencies as XRP leads the rise in altcoins
Interest rates rise for stablecoin borrowing on DeFi lenders Non-Bitcoin token prices have risen since last weekend DeFi makes a surprise comeback, as cryptocurrencies’ recent rally spills over into a sector struggling with growth since last year’s high-profile crashes and a jump in market interest rates Traditional.
Interest rates for borrowing stablecoins that aim to track the US dollar, such as USDC and Tether, have risen to more than 10% that allow for peer-to-peer cryptocurrency transactions without intermediaries. A higher interest rate means that more traders are willing to pay to borrow stablecoins, which is a sign that they are raising their bets on cryptocurrencies. For months, prices have been low as decades of high yields have not been found in the traditional bond market.
The rise in lending demand has coincided with the return of positive funding rates in the perpetual futures market, one of the most popular derivatives contracts in the cryptocurrency space. Data from tracker Coinglass shows that the interest-weighted open funding rate turned positive at the end of last week for cryptocurrencies, meaning speculators betting on rising prices are willing to pay those anticipating declines to keep their bullish positions open. XRP rose 11% to 72.6 cents on Monday, while other major altcoins like Dogecoin are also trading higher.
There have been a number of “wealth effects” that typically cause demand for lending to spike when there is a spike in a particular Gauntlet token. There is also demand for short-term lending from large holders. “Leverage in DeFi is reflexive – when prices rise,
Higher borrowing rates and financing rates in the perpetual futures market
Rising borrowing rates and financing rates in the perpetual futures market have also created arbitrage opportunities for traders to profit from the differences between the two. Aave and perp rates should generally be fairly correlated, as you can arbitrage between the two. “In general, this speaks to the demand for… Owning cryptocurrencies” in the financial derivatives market. Last year’s explosions in a number of central lenders left DeFi lenders as one of the only venues available for leveraged trades, although demand for lending via OTC desks is not high. “Lending and leverage are definitely coming back.” “This is a natural consequence of not only increased investor interest, but also increased volatility – volatility encourages leverage and thus demand for lending
Bitcoin rose about 28% in October, the largest monthly increase since January, with expectations growing that the US Securities and Exchange Commission will soon approve exchange-traded funds that invest directly in the original cryptocurrency after more than a decade of deliberations. Since then, Bitcoin’s rise has spread to smaller cryptocurrencies like Solana, which has been one of the best-performing cryptocurrencies this year. There is naturally an increase in demand for leverage for people who want to make long-term speculative bets on a market that is moving in a particular direction. .