Decentralized financing or DeFi offers an alternative to traditional banks. Instead of a third party in a financial transaction – a role that banks traditionally played – there is no intermediary. Instead, transactions are processed automatically through technology carried out using smart contracts.
“All financial transactions and records are immutable, non-editable and securely stored on the blockchain,” said Vadim Filippov, chief science officer at Coinchange, a FinTech company that generates revenue for clients through blockchain-based assets. “It can automate trading, lending, borrowing, insurance, and other financial transactions. And with this automation, the fees generated can go to the users instead of to intermediaries. “
Demystify crypto with yield farming
One of the greatest advantages of DeFi is its income economy, which can produce higher returns than traditional investments. Until recently, “investing” in cryptocurrency meant buying a token as a digital asset with the expectation that its value would continue to rise.
Yield farming is the practice of actively managing passive income with alternative asset classes. The main type of profitable farming currently is to provide liquidity for DeFi apps. By providing liquidity to pools of liquidity, users are entitled to the fees that are generated based on the activity in those pools. This offers returns that are not based on the market – something that a stock portfolio cannot.
“Our yield farming strategy is low-risk, market-neutral and offers much higher returns than the average ETF or investment fund,” says Maxim Galasch, CEO of Coinchange. “It’s an absolute must for anyone who already has crypto as an investment, but it’s also a profitable investment strategy for crypto newbies looking to diversify with a chance for high returns.”
Originally conceived as a brokerage in 2017, Coinchange was founded in late 2020 with the aim of making DeFi and crypto asset management accessible while at the same time offering a profitable passive income. Their DeFi Yield Farming strategies have been designed with an easier barrier to entry than is available on the market – they offer multiple ways to invest directly from USD.
Coin can help
“There are risks associated with bad actors in the DeFi space – like poorly programmed smart contracts and draining liquidity pools – but we do detailed due diligence on every protocol we use and are committed to only audited smart contracts of the highest order Standard to use. ”Says Filippov.
At Coinchange, the risk of stablecoin earning strategies is “practically zero,” according to Filippov. The value of stablecoins is pegged to the US dollar, so there is no inherent market risk of using a token that fluctuates in value to protect key investments.