Crypto Platforms Started Offering Returns On Holdings And Deposits, Banks Should Be Scared By BTC Peers

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Crypto platforms started offering returns on holding and deposits, banks should be afraid

The traditional profit-making approach to the domain of cryptocurrencies has largely remained around price appreciation. People hold and trade BTC in order to benefit from the asset’s price appreciation. However, with DeFi platforms gaining ground, the paradigm is beginning to change. Yield farming is becoming common practice with many platforms offering users rewards if they bet or lend crypto assets on the platform. Platforms like Compound Labs allow users to borrow and lend cryptocurrencies at rates determined by the algorithm that runs on the platform. With crypto yield farming, returns are earned in the form of annual percentage yield (APY) and sometimes in the form of a new token. Famous twins Tyler and Cameron Winklevoss are also launching a new service on their beloved Gemini crypto exchange which goes by the name “Earn.” The idea behind this is the same, reward the customer for depositing and holding crypto. The Earn service allows the audience to deposit their holdings in the form of BTC and other cryptocurrencies in interest-bearing accounts. Earn promises of up to 7.6% APY while another startup, BlockFi, offers a massive 8.6% APY. The trend has penetrated the market. Another such project that currently offers returns on holding cryptocurrencies is LCMS. Bithumb Global recently announced an LCMS coin deposit and trading event on their Twitter account. The event offers 20,000 USDT as the total reward amount. 6,000 USDT is allocated for people who deposit and hold LCMS, while 14,000 USDT is dedicated to trading the same asset. The jackpot for anyone at the event is $ 3,000, followed by rewards of $ 2,000 and $ 1,500, respectively, for second and third place. Rewards are given to people who are in the TOP 500 range. However, to get this reward, users are expected to pass the KYC2 verification. The event is drawing to a close as April 6 is the last day of this event. This is just another example of how the crypto reward paradigm is slowly changing to incentivize people to hold and trade crypto. Banking Savings vs. Crypto Returns The world of cryptocurrencies has emerged to rival a parallel that exists in the form of the banking system. Whether through deposits or transactions, banks have become an essential part of people’s financial lives. One of the greatest advantages that banks give their users and that no one else has been able to obtain is the profitability of holding money. People often use savings accounts to earn interest on the amount deposited. This incentivizes people to deposit their money in banks as they expect a return. With cryptocurrencies, things have been different, people have always been attracted to crypto dominance due to price rises. In a decade, bitcoin has risen thousands of times and has attracted more and more investors. The bitcoin surge in 2017 made cryptocurrencies prominent in the eyes of investors and the recent bull run is what has made BTC a legitimate asset. Currently, the asset is trading at a price of $ 59,860, while it is expected to rise sooner. JP Morgan has adjusted its target price for bitcoin to $ 130,000 as it expects strong institutional support in the future. So traditionally the kind of returns people expect from cryptocurrencies comes from price spikes. However, this only attracts a certain segment of investors. To attract risk-averse strata of the population, it is necessary to give people stable returns, just as banks give them with their savings accounts. This need is now being satisfied by the platforms mentioned above. Take LCMS as a use case. Earning rewards with just a deposit and exchange is a great incentive for people to enter this space. Once people enter your ecosystem, they will surely learn about the platform as well. LCMS uses blockchain for customer database management, joint product development and brainstorming predominantly in the food and cosmetics arena. The LCMS currency is the valid unit of value on the platform. Profit Sharing: The Real Decentralization The fact that platforms are now sharing profits with customers is commendable. The whole idea behind the world of cryptocurrencies is decentralization and empowerment of people. Cryptocurrency enthusiasts have always talked about breaking down hierarchies and central authorities and bringing people to the position of rewards and powers rather than milking them as users. This idea of ​​profit sharing is exactly in line with the core philosophy of cryptocurrencies. Giving back to people is the main theme. With platforms like Compound, Earn, and LCMS on platforms that reward through coin bets or events, banking systems face a challenge more than ever.

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