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5 Practical Applications of Stablecoins in Modern Finance

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stable crypto

Stablecoins in Modern Finance

Stablecoins vs Traditional Cryptocurrencies

Although traditional cryptocurrencies have a fixed supply, their demand varies depending on market sentiment, utility in decentralized finance (DeFi), regulatory environments, and other factors. As demand and trading activities change, their price is subject to fluctuations. In contrast, stablecoins are pegged to real-world assets like fiat currency, or other algorithmic strategies are employed to maintain stable value regardless of their current demand. This makes stablecoins particularly useful for making payments and storing value as a hedge against fiat inflation. The question arises: can stablecoins replace fiat currencies?

While it is true that algorithmic stablecoins do not rely on fiat currencies for value stabilization, they have limitations and may not fully replace fiat currencies. However, they are very useful in certain situations. For example, traders can store value in stablecoins instead of fiat currencies to hedge against the volatility of traditional cryptocurrencies. Just like conventional cryptocurrencies, stablecoins also face regulatory scrutiny and are not recognized as legal tender in most regions.

Stablecoins: A Hedge Against Inflation

Stablecoins pegged to the US dollar can be used to hedge against inflation in fiat currencies other than the US dollar, such as EUR, CAD, JPY, and others. If you want protection from inflation of all fiat currencies, including the USD, you might consider algorithmic stablecoins, which are not pegged to any real-world asset. By storing money in stablecoins, people can retain its original value even if the fiat currency of their country devalues over time. Moreover, with the increasing worldwide adoption of cryptocurrencies, there are several use cases enabled by decentralized finance (DeFi). Here are the top 5 practical applications of stablecoins:

  1. Crypto Payments

According to a report by Crypto.com, the number of global cryptocurrency owners increased by 34% in 2023, rising from 432 million in January 2023 to 580 million in December 2023. Crypto adoption is expected to keep increasing at substantial rate as more and more people view cryptocurrency as valuable assets. In response to growing adoption of crypto, many businesses are now integrating crypto payment systems.

Several companies such as Shopify, Microsoft, and Travala accept cryptocurrencies like USDT and BTC for payments. This approach provides customers the benefit of faster, efficient and low-cost cross-border payments.

  1. Interest Earnings

Decentralized Autonomous Organizations (DAO) like Aave enable the creation of several liquidity pools, where lenders can deposit assets to provide funds for borrowers. Lenders can deposit stablecoins in these pools, and in return, they earn interest for providing assets. The loans provided to borrowers are collateralized, meaning lenders won’t lose their crypto if borrowers fail to repay.

While stablecoins typically offer less APR rate compared to more volatile assets, they can still be utilized on lending platforms similar to Aave to earn passive income. The APR rate depends on factors such as demand for borrowing a particular stablecoin, platform policies, platform fees and presence of additional rewards for lenders.

  1. Trading

While stablecoins cannot be used as an investment asset because of their stable price, they can be used to store value when trading traditional cryptocurrencies. BTC/USDT is a popular trading pair that allows users to buy BTC by selling USDT coins. When users want to sell BTC, they acquire USDT in return. You can effectively store your money in the USDT stablecoin while trading BTC without utilizing fiat currencies.

Trading with stablecoins is a cheaper and faster option because there’s no need for a bank transfer to move money between crypto and fiat. By moving your assets to stablecoins, especially during market downturns of crypto like BTC or ETH, you protect your portfolio value from losses.

  1. Decentralized Finance

The stable value of stablecoins makes them perfect for decentralized financial services such as lending, borrowing, liquidity mining, and yield farming. You can provide your stablecoin assets in liquidity pools to facilitate a DeFi protocol in several operations, including producing liquidity and providing funds for borrowers. Although stablecoins inherently offer a lower APR rate, the rewards you receive are more predictable because of their stable value.

Platforms like Yearn Finance offer several liquidity pools where users can deposit stablecoins and earn interest. Through the vault feature, which is an automated yield tool, you can deposit your assets and earn interest.

  1. Hedge Against Inflation

Fiat-collateralized stablecoins such as Tether (USDT) may not provide full protection against fiat inflation because the USD can also devalue. Algorithmic and crypto-collateralized stablecoins are often considered better choices for protecting the value of your money against fiat inflation. Algorithmic stablecoins are designed to maintain stable value through algorithms and smart contracts that adjust the coin’s supply based on market conditions. On the other hand, crypto-collateralized stablecoins are backed by a reserve of other cryptocurrencies rather than fiat.

Before investing in these stablecoins, it’s important to consider several risks. Crypto-collateralized stablecoins face risks related to market volatility and over-collateralization, while algorithmic stablecoins are vulnerable to stability issues and reliance on complex algorithms without physical collateral.

What is a stablecoin, and how does it differ from other conventional cryptocurrencies?

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Stablecoins are cryptocurrencies designed to have a stable value by pegging them into a reserve of assets that could include fiat currencies such as the US dollar, commodities like gold, or other financial instruments. Unlike most of the traditional cryptocurrencies, such as Bitcoin and Ethereum, which easily fluctuate in price, stablecoins aim to minimize such fluctuations in price.

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Phemex Review 2024: Trading Experience and All Features

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derivatives exchange review

Phemex: User-Friendly Platform for Derivatives Traders

Phemex is a user-friendly crypto exchange that offers comprehensive spot and derivatives trading features. If anyone want to trade spot and derivatives assets and also want to obtain leverage for their investment, Phemex would be the top choice for them. Users can trade some assets with up to 100x leverage while taking benefit of user-friendly interface. Unlike other specialized derivatives trading platforms like Deribit, this platform also provides DeFi earning products such as staking products.

Launched in 2019, Phemex is one of the fastest growing crypto exchange that developed a comprehensive ecosystem of financial services. Its ecosystem includes not only spot and derivatives trading but also unique features such as trading bots and DeFi products, making it a versatile choice for both trading and DeFi investments.

Pros and Cons

Pros Cons
Around 340 spot trading and 376 contract trading pairs Limited regulatory oversight
Up to 100x leverage on certain assets Restricted in some countries
Several trading bots available
Flexible and locked staking products
Simulated trading feature for derivatives products

Trading Fees

Phemex charges decent fees for spot and derivatives trading. Users can become VIP members to get further fee discounts. With the taker/maker fee structure, takers pay slightly higher fees. Here’s the fee structure for spot trading:

User Level Last 30d Spot Trading Volume (USD) Maker Fee Taker Fee
Standard [0.0000, 800.00K) 0.1000% 0.1000%
VIP1 [800.00K, 1.80M) & API ≤ 20% 0.0900% 0.1000%
VIP2 [1.80M, 2.50M) & API ≤ 20% 0.0500% 0.0700%
VIP3 [2.50M, 4.50M) & API ≤ 20% 0.0450% 0.0650%
VIP4 [4.50M, 8.00M) & API ≤ 20% 0.0400% 0.0600%
VIP5 [8.00M, 15.00M) & API ≤ 20% 0.0350% 0.0550%
Star VIP [15.00M, ~∞) & API ≤ 20% 0.0000% 0.0400%
Pro1 [800.00K, 15.00M) & API > 20% 0.0600% 0.0800%
Pro2 [15.00M, 30.00M) & API > 20% 0.0400% 0.0600%
Pro3 [30.00M, 100.00M) & API > 20% & 70% Maker 0.0300% 0.0500%
Pro4 [100.00M, ~∞) & API > 20% & 70% Maker 0.0000% 0.0450%

Here’s the fee structure for derivatives trading:

User Level Last 30-day Volume (USD) Maker Fee Taker Fee
Standard [0.0000, 8.00M) 0.0100% 0.0600%
VIP1 [8.00M, 18.00M) & API ≤ 20% 0.0080% 0.0550%
VIP2 [18.00M, 45.00M) & API ≤ 20% 0.0060% 0.0500%
VIP3 [45.00M, 85.00M) & API ≤ 20% 0.0040% 0.0450%
VIP4 [85.00M, 180.00M) & API ≤ 20% 0.0020% 0.0375%
VIP5 [180.00M, 380.00M) & API ≤ 20% 0.0010% 0.0350%
Star VIP [380.00M, ~∞) & API ≤ 20% 0.0000% 0.0300%
Pro1 [8.00M, 100.00M) & API > 20% 0.0000% 0.0475%
Pro2 [100.00M, 380.00M) & API > 20% 0.0000% 0.0450%
Pro3 [380.00M, 1.50B) & API > 20% & 70% Maker 0.0000% 0.0350%
Pro4 [1.50B, ~∞) & API > 20% & 70% Maker 0.0000% 0.0325%

Trading Experience

The trading interface is intuitive and well-organized, providing access to spot and leveraged trading positions. There are fewer order types including limit, market and conditional orders. But the conditional type comes with limit or market options, allowing more customization of trading strategy compared to only limit or market types. Trading bots are accessible through separate platform which currently provides four bots including spot grid, futures grid, futures martingale and signal bot. These bots can help traders execute custom strategies, allowing them to capitalize on crypto market. Interestingly, trading bots offer both manual and AI recommended configurations for setting the trading strategy.

Derivatives trading platform offers the same order types with an additional type known as a Order. Traders can access normal or leveraged trading position and also select trading bot option within this platform.

Other Features

One of the prominent features is Phemex lending protocol which allows users to borrow or lend cryptocurrencies. Lenders can deposit assets, which are used to fund the borrowers and in return, lenders earn interest. Users can also lend stablecoins like USDT and USDC.

Another interesting feature is the PT token, which is the native coin of the Phemex platform. It offers several benefits, including trading fee discounts, staking rewards, DAO governance, VIP privileges, and more.

Customer Service & Satisfaction

Phemex provides customer support through several channels including email, live chat and help centre. Users can contact the customer service representatives to solve any issues they face. The FAQ section provides extensive educational resources, aiming to provide necessary information about topics related to trading and platform usage.

Phemex did not get good reviews on Trust Pilot. With around 183 reviews, Phemex received an overall rating of 2.1 out of 5. Customers with bad experiences complain about frozen funds, withdrawal issues, and unresponsive customer support. On the other hand, customers with good experiences admire user-friendly interfaces, low fees, advanced trading tools, and security measures.

Company Overview

Jack Tao founded Phemex in 2019 to offer financial services based on blockchain technology. While the company values simplicity of use, it also offers advanced trading tools such as trading bots and other features. Phemex provides both spot and derivatives trading services and allows leveraged investments, enabling traders to grow their crypto portfolios. Initially positioned as a professional derivatives exchange, Phemex later introduced spot trading services. The platform has successfully grown a large user base through its offerings, which include trading services and other blockchain-based products such as DeFi. Phemex also emphasizes security and has implemented measures like cold storage and regular security audits to ensure the protection of users’ funds.

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ByBit Review 2024: Trading Experience and All Features

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derivatives exchange review

Bybit: Comprehensive Platform for Derivatives and Spot Trading

Bybit is a popular crypto exchange that provides comprehensive services for spot and derivatives traders. It also provides advanced trading tools such as trading bots, OTC trading service, and demo trading, allowing traders to manage their crypto portfolio effectively. Additionally, traders can also take advantage of staking and structured products to earn passive income with their crypto holdings.

The platform was officially launched as a cryptocurrency derivatives exchange in 2018 and later it introduced spot trading services. With more updates such as introduction of new spot trading assets and trading bots, ByBit now has all the features needed by both spot and derivatives traders.

Pros and Cons

Pros Cons
More than 500 spot assets Can be difficult for beginners
Wide range of derivatives products  
Copy trading and automated trading also available  
Staking and structured products for earning passive income  
   
   

Trading Fees

Bybit offers a competitive fee structure where taker pay slightly higher fees compared to maker. The fees are low for both spot and derivatives assets compared to many other crypto exchanges. Users can get further discounts by becoming VIP members which requires meeting certain criteria such as a certain trading volume requirement. Here’s the fee structure:

VIP Level Spot Trading*   Perpetual & Futures Contracts Trading   USDC Options Trading  
Taker Fee Rate Maker Fee Rate Taker Fee Rate Maker Fee Rate Taker Fee Rate Maker Fee Rate  
VIP 0 0.1000% 0.1000% 0.0550% 0.0200% 0.0200% 0.0200%
VIP 1 0.0800% 0.0675% 0.0400% 0.0180% 0.0200% 0.0150%
VIP 2 0.0775% 0.0650% 0.0375% 0.0160% 0.0200% 0.0150%
VIP 3 0.0750% 0.0625% 0.0350% 0.0140% 0.0200% 0.0150%
VIP 4 0.0600% 0.0500% 0.0320% 0.0120% 0.0180% 0.0150%
VIP 5 0.0500% 0.0400% 0.0320% 0.0100% 0.0150% 0.0100%
Supreme VIP 0.0450% 0.0300% 0.0300% 0.0000% 0.0150% 0.0020%
Pro 1 0.0600% 0.0400% 0.0320% 0.0100% 0.0180% 0.0150%
Pro 2 0.0500% 0.0300% 0.0320% 0.0050% 0.0150% 0.0100%
Pro 3 0.0400% 0.0200% 0.0275% 0.0000% 0.0150% 0.0020%
Pro 4 0.0300% 0.0150% 0.0240% 0.0000% 0.0100% 0.0020%
Pro 5 0.0200% 0.0100% 0.0210% 0.0000% 0.0100% 0.0000%

Trading Experience

The trading platform provides a comprehensive set of tools for trading crypto assets. The platform is integrated with TradingView, allowing users to access TradingView charts directly within Bybit. Additionally, users have the option to use Bybit’s standard charting tools as well. Users can create spot trading or margin trading positions and select a wide range of order types including limit, market, conditional, OCO, trailing stop and TP/SL. Moreover, users can also navigate to OTC service, and auto-investment feature by selecting the Tools section.

Bybit offers a diverse range of trading bots including spot grid, futures grid, futures martingale, futures combo and DCA bot. These bots enable users to set advanced trading strategies by using AI or manual configurations. Overall, ByBit offers all the tools and resources that spot and derivatives traders need to successfully execute trades.

Other Features

One of the unique features is ByBit Earn, an integrated platform that offers several financial services such as flexible or locked staking, dual investment, ETH 2.0 staking, liquidity mining and others, allowing users to earn passive income using their crypto. There are several DeFi products for each cryptocurrency, providing multiple options for earning rewards. For example, you can use ETH in staking, savings product, dual asset and liquidity mining, each of which offers a different APR rate depending on the strategy involved. Dual asset, which provides the highest APR rate, is a non-principal protected investment product that allows users to capitalize on price movements by predicting direction of given crypto asset within a timeframe. But this feature may not be suitable for beginners.

Customer Service & Satisfaction

Bybit provides several channels for customer support including email, request form, and help centre. The help centre provides self-service, offering multiple resources that customers can utilize to solve problems on their own. The educational resources provided by ByBit cover all aspects of trading and related topics, allowing customers to handle various situations.

Unfortunately, Bybit did not get good reviews on Trustpolit. There 1373 reviews which makes its overall rating of 1.5 out of 5. Most of the customers complain about issues with P2P transactions, poor customer support, difficulty accessing funds, and problems with fiat deposits. On the other hand, customers with good experiences praise the leverage trading feature, fast trade execution, and order types.

Company overview

Bybit was founded in 2018 by Ben Zhou, who has a background in the forex industry. Since its launch, Bybit has established itself as a prominent cryptocurrency derivatives exchange, offering a range of trading tools and assets. The company has implemented various security measures, including cold storage for assets and advanced data encryption, to protect user funds.

Bybit is also regulated in some regions. In 2022, Bybit expanded its services by introducing its own Web3.0 wallet and spot trading services, which contributed to a growth in its user base. The platform focuses on providing comprehensive trading tools and portfolio management features for investors. Currently, Bybit is headquartered in the United Arab Emirates (UAE).

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Maximizing Returns with Binance Auto-Investment: A Comprehensive Guide

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auto investment strategy

How Auto-Investment Strategies Work

Auto-investment tools are algorithms that execute trades automatically based on given parameters. Binance’s Auto-Investment tool is similar to DCA trading bot in that it also utilizes DCA strategy, but it offers a simpler approach to setting up investment strategy. On the other hand, DCA trading bots are more customizable and operate through certain trading rules such as rebalancing and price triggers.

Auto-Investment feature enables regular investments in specific cryptocurrencies regardless of current price. It is focused on periodic investments and additionally it also deposits the assets in Simple Earn Products Account to grow the crypto holdings. Once investors have acquired good amount of crypto, they can manually sell it at high price in the future to make profit.

By utilizing DCA (Dollar-Cost Averaging) strategy, this tool helps reduce the impact of price volatility on investment. Investors can use this tool to set up recurring investments and to grow their crypto holdings. Moreover, they can also diversify their investment to multiple cryptocurrencies.

Selecting the Right Coins

The DCA Auto-Investment strategy uses the principle to spread out the investments over regular intervals, which helps reduce risk of making large investment at unfavourable price. This strategy works well with cryptocurrencies having downward trends or volatile price movements. If you choose a coin with a long-term upward trend, this strategy may lead to acquiring crypto at each progressively higher price which may not give the best returns if you plan to sell out.

Cryptocurrencies such as BTC and ETH which experience weekly or monthly price downtrends or fluctuations, can be good for Auto-Investment plan because they have a history of regaining value, potentially leading to significant profits over time. On the other hand, newly launched cryptocurrencies, which lack historical performance data, are riskier as they have a higher potential to lose value in the long term without recovering.

Selecting the Right parameters

Binance provides multiple payment options for recurring investment plans including stablecoins and other crypto in your spot wallet or fiat currencies. When setting up DCA investment strategy, you need to select specific interval. This interval can range from minimum of 1-hour to maximum of monthly, allowing investors to spread out their investment over any timeframe they choose. You also specify the amount of crypto you want to purchase at each interval. By defining your risk tolerance and budget, you can better decide the appropriate amount for regular investments.

If you want to take advantage of short-term price movements, you might choose 4-hour interval which would make investment after every 4-hours. The Auto-Investment helps users constantly invest without having the stress of manual setup. This saves time and it also mitigates emotion-based decisions.

Portfolio Auto-Investment for Reducing Risks  

Investing in single cryptocurrency, even through DCA strategy, can be risky if market does not recover after continuous price downfalls or if the investments are poorly timed. Diversifying to multiple cryptocurrencies can reduce this risk as some cryptocurrencies can perform better when others are underperforming. Moreover, Binance Auto-Investment’s ability to deposit assets in Simple Earn Products also helps grow your crypto which can give better returns.

You can either allocate specific percentages of your total investment to each crypto, ensuring your total allocation equals 100%, or use Portfolio Templates to finalize your investment plan. By doing this, you give a specific portion of your total investment to each cryptocurrency. You may give bigger allocations for this crypto, which, based on technical analysis, may give better returns. But this requires you to analyse relative performance of cryptocurrencies using historical market data.

Concluding remarks

While Binance’s Auto-Investment feature does not offer full customization such as specifying limit price, or advanced parameters, it gives a simpler approach to using DCA strategy. Users can set a specific amount they want to invest regularly and also select a specific interval. Through this approach, users can acquire crypto by spreading out their investment to reduce the impact of price volatility, which is significant in the case of lump sum investment. Moreover, the ability to allocate a specific portion of your total investment to different cryptocurrencies, helps uniformly diversify your investment to several cryptocurrencies. Overall, this feature provides user-friendly approach to executing the dollar-cost averaging strategy.

Investment Strategies
Crypto Earning Platforms
Earning potential of crypto staking

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BitMEX Review 2024: Trading Experience and All Features

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derivatives exchange review

BitMEX: High-Leverage Crypto Derivatives Exchange

BitMEX is a popular derivatives exchange known for offering up to 100x leverage on certain products, enabling users to amplify potential returns on their investments. The platform supports a range of derivatives products and provides sophisticated trading tools, allowing users to execute custom strategies while benefiting from deep liquidity and low trading fees. The trading interface is fully customizable to suit the preferences of traders.

Launched in 2014, BitMEX has become a leading derivatives exchange with high trading volume. In 2016, it introduced perpetual swap contracts with up to 100x leverage. The platform also has a native token, BMEX, which serves as a utility token, offering discounts on trading fees.

Pros and Cons

ProsCons
Wide range of derivatives productsNot available in U.S.
Up to 100x leverage on some products 
Low trading fees 
BMEX token can give discounts on fees 
  
  

Trading Fees

BitMEX utilizes taker/maker fee structure for both spot and derivatives trading. For spot trading, makers and takers pay 0.10% fees. On the other hand, fees for derivatives trading depends on monthly trading volume and amount of BMEX staked. The higher the amount of staked BMEX, higher the discounts on fees. Here’s the fee structure for derivatives trading:

Fee Tier30D Rolling Average Daily Volume (USD)Taker Fee (XBT)Maker Fee (XBT)Taker Fee (USDT)Maker Fee (USDT)
B00.0750 %0.0200 %0.0750 %-0.0150 %
I1,000,0000.0500 %0.0100 %0.0500 %-0.0150 %
T5,000,0000.0400 %0.0000 %0.0400 %-0.0150 %
M10,000,0000.0350 %0.0000 %0.0350 %-0.0150 %
E25,000,0000.0300 %0.0000 %0.0300 %-0.0150 %
X50,000,0000.0250 %0.0000 %0.0250 %-0.0150 %
D100,000,0000.0240 %-0.0030 %0.0240 %-0.0150 %
W250,000,0000.0230 %-0.0050 %0.0230 %-0.0150 %
K500,000,0000.0220 %-0.0080 %0.0220 %-0.0150 %
S1,000,000,0000.0175 %-0.0100 %0.0200 %-0.0150 %

Trading Experience

BitMEX provides a well-organized trading interface which includes price chart, depth chart, order book, recent trades section, news feed and order form. Users can move these sections and adjust them based on their preferences. They can also utilize several charting tools and indicators for technical analysis. Both individual and institutional traders can easily use the trading platform for their trading strategies.

You can access a wide variety of derivatives products and trade certain products with up to 100x leverage. You can also trade 14 spot trading pairs and take benefit of high liquidity.

Other Features

While BitMEX enables a smooth trading experience through better liquidity and latency, it also provides other unique features such as BMEX token which serves as its native token. It was launched in November 2022 to provide discounts on trading fees, staking rewards and certain VIP privileges. At the maximum level, users can get 15% taker fee discount or 0.004% maker fee reduction.

Moreover, BitMEX provides Guilds, a Social Trading Platform, that allows collaboration and community engagement between the BitMEX traders. Users can also create their own groups or Guilds, that can help enable collaboration between traders.

Customer Service and Satisfaction

BitMEX provides customer support through several channels including email, support request and FAQ section. Users can submit request if they have specific problems or issues related to the platform. They can use FAQ section to learn about trading, and other topics. The extensive educational resources can be very helpful if you have any queries.

BitMEX got 12 reviews on G2, which gives it an overall rating of 3.1 out of 5. Many customers admire features such as 100x leverage, user-friendly interface, low fees and overall smooth trading experience. Some customers also complain about trading system freezing, and complex interface. Customers have varying experiences with some having a smooth trading experience while other facing problems in the process.

Company Overview

BitMEX is one of the oldest derivatives exchanges developed in 2014 by Arthur Hayes, Ben Delo, and Samuel Reed. The platform gained significant popularity due to its advanced trading tools and features. Initially, platform focused on BTC derivatives contracts, but later added other products such as perpetual swap contracts. In 2022, it launched spot trading feature and BMEX token which provided several advantages to old users and also grew user base. While the exchange remains unregulated in several regions such as U.S., it is generally considered to be a secure platform, with a proof-of-reserve system. The company is currently based in Seychelles.

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Deribit Review 2024: Trading Experience and All Features

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deribit review

Deribit: Advanced Derivatives Exchange

Deribit is a leading derivatives exchange that allows users to trade a wide range of derivatives products, including futures, perpetuals, and options contracts, with deep liquidity. Advanced tools such as the Option Wizard, Position Builder, and Deribit Metrics enable traders to manage their crypto portfolios effectively. The platform also offers a testnet feature, allowing beginners to simulate trading scenarios to gain experience.

Deribit was one of the first platforms to offer Bitcoin options trading. Since its launch in 2016, it has grown to hold the largest share of the global Bitcoin Options market. The platform is suitable for both individual and institutional investors. Deribit also maintains a strong focus on security, offering robust security measures and proof-of-reserves.

Pros and Cons

ProsCons
Wide range of derivatives products such as futures, perpetuals and options contractsNot available in U.S. and Canada
Powerful trading tools 
Zero-fee spot trading 
Deep liquidity for facilitating trades 
  
  

Trading Fees

Deribit officially launched its spot trading feature on April 24, 2023, introducing three trading pairs: BTC/USDC, ETH/USDC, and ETH/BTC. For these spot trading pairs, Deribit does not charge any trading fees. However, for derivatives trading, the platform utilizes a maker/taker fee structure, where takers pay higher fees compared to makers.

ContractsMaker FeeTaker Fee
BTC Weekly Futures-0.01%0.05%
ETH Weekly Futures-0.01%0.05%
BTC Futures & Perpetual0.00%0.05%
ETH Futures & Perpetual0.00%0.05%
USDC Perpetuals0.00%0.05%
BTC Options0.03% of the underlying or 0.0003 BTC per options contract0.03% of the underlying or 0.0003 BTC per options contract
ETH Options0.03% of the underlying or 0.0003 ETH per options contract0.03% of the underlying or 0.0003 ETH per options contract
USDC Linear Options0.0001 * index price (Capped at 12.5% premium)0.0005 * index price (Capped at 20% premium)

Trading Experience

Deribit offers advanced tools like the Option Wizard, Position Builder, and Testnet to help traders in managing their crypto portfolios. The platform provides high-speed trading with deep liquidity, and the interface is customizable, allowing users to rearrange sections like charts, order books, order forms, and trade history to fit their preferences. Charts come with multiple customization options and technical indicators.

Deribit supports a wide range of order types, including limit, market, stop limit, and trailing stop orders, along with stop loss and take profit options for more sophisticated trading strategies. The Option Wizard helps users identify optimal options trading strategies based on price predictions, while the Position Builder allows for the construction and analysis of strategies before execution. The Testnet feature offers a simulated trading environment, perfect for testing strategies without financial risk.

Other Features

Apart from derivatives trading, Deribit also offers spot trading, supporting 11 trading pairs and 8 coins. The spot trading feature was launched on April 24, 2023, initially with three pairs. Traders pay no fees for spot trading. They can access the same trading interface, with identical order types and stop loss and take profit options, allowing them to take advantage of the spot market. Here are the trading pairs:

  • XRP/USDC
  • USDC/USDT
  • STETH/USDC
  • STETH/ETH
  • SOL/USDC
  • MATIC/USDC
  • ETH/USDT
  • ETH/USDC
  • ETH/BTC
  • BTC/USDT
  • BTC/USDC

Customer Service and Satisfaction

Deribit offers customer support through multiple channels, including live chat, email, and Telegram, and provides educational resources focused on derivatives trading and platform tools. Deribit has a mix of reviews on TrustPilot, which makes overall rating of 3.3 out of 5 from 14 reviews. Many users praise the platform for its high liquidity, smooth trading experience, and fast trade execution. However, some customers express dissatisfaction with issues such as lost funds and the quality of customer support.

Company Overview

Launched in 2016, Deribit initially focused on providing advanced trading tools and services for cryptocurrency derivatives. In 2023, the platform expanded its services to include zero-fee spot trading. Deribit is recognized as one of the largest derivatives exchanges by trading volume. The platform has implemented robust security measures, including a proof-of-reserves system, to ensure the safety of users’ funds. Additionally, Deribit offers customer support through multiple channels, allowing users to address queries or issues effectively.

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Maximizing Returns with Binance Dual Investment: A Comprehensive Guide

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dual investment strategy

Understanding Dual Investment Strategies

Cryptocurrency prices can fluctuate based on factors such as current demand, supply, trading activities, and macroeconomic events. These prices often follow trends within specific timeframes. Maximizing returns with Binance dual investment for instance, weekly price movements are influenced by short-term trading activities, while monthly price movements are affected by long-term events such as regulatory changes, the introduction of new cryptocurrencies, and shifts in investor interest.

In dual investment strategies, you first select a specific timeframe and execute a Buy Low strategy by setting a target low price for your investment. If you successfully acquire the cryptocurrency at this target price, you can then use the Sell High strategy to sell the crypto once the price increases to a predetermined target. Analysing price trends around a mean point can help in setting these targets.

To automate this process, Binance offers the Dual Investment tool, which includes two separate products: Buy Low and Sell High. The Buy Low product allows you to acquire cryptocurrency at a specified low price, while the Sell High product lets you sell crypto at a targeted high price.

Selecting the Right Coins

While BTC is a prominent cryptocurrency for both short-term and long-term investments, it may not always yield the highest returns. Some cryptocurrencies perform better within specific timeframes compared to others. For instance, a new cryptocurrency with a rapidly growing value might be a good investment over a monthly timeframe. In the early stages, you might use the Buy Low strategy to acquire a certain amount of this crypto and sell it at a higher price after a few months, once it has gained substantial value. However, its value can also decrease over time, making it less suitable for ongoing dual investment strategies.

On the other hand, BTC can be a good asset for shorter timeframes, such as weekly investments. It may experience price fluctuations within a week, with potential peaks and troughs. For example, BTC might have weekly price fluctuations between $58,000 and $62,000, with a mean price in that range. Its stability and liquidity make it a viable option for dual investment strategies in shorter timeframes. For example, if a user invests 0.5 BTC, they could use the Buy Low strategy when the price is $58,000 and the Sell High strategy when the price is $62,000, potentially making a profit of $2,000 based on the price difference and the amount invested.

Selecting the Right Parameters

While you cannot edit the target price once you’ve selected a product, you can choose from various positions with specified APR, target price, and settlement date. Once subscribed to a specific position, you cannot alter these parameters. Besides profits from price volatility, you also earn additional rewards.

You can select the amount of crypto you want to buy or sell. Additionally, the auto-compound feature can help by automatically re-subscribing to the same product if the target price is not reached. Auto-compound comes with two plans: Basic and Advanced. The Basic Plan re-subscribes to the same product with the next available settlement date if the target price is not achieved. It also re-adjusts the target price based on the changing market conditions. For instance, if BTC is currently priced at $58,000 and your initial Buy Low product has a target price of $56,000, the Basic Auto-Compound will re-subscribe to the product if the target is not reached. If BTC’s price drops to $56,000, which was the original target, the target price will be automatically re-adjusted to remain lower than the market price.

The APR listed next to each product includes not only the investment return but also includes additional rewards offered by Binance.

Boost Returns with Advanced Auto-Compound

Advanced Auto-Compound works the same as Basic Plan if target is not reached and creates an opposite investment position if target is reached. This allows more automation in dual investment strategy. For example, if Sell High position sells your crypto at target price, then Advanced Auto-Compound would create a Buy Low position with next available settlement date. Similarly, it can create a Sell High position right after Buy Low position acquires crypto for you, allowing to generate profit without your intervention.

However, it’s important to monitor your current investments and stay informed about crypto market trends, as Advanced Auto-Compound can create new positions even in declining markets. You can disable Auto-Compound up to 30 minutes before the settlement date if needed.

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The ultimate guide to DCA for crypto trading

5 Practical Applications of Stablecoins in Modern Finance

Introduction to Dual Investment: Earning Money with Binance

DeFi on Binance: Comprehensive Review to Earning with Decentralized Finance Products

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earn with binance

Overview of Binance Investment Products

While cryptocurrency trading can yield significant profits through market volatility, Binance offers several financial products that enable users to generate passive income with minimal effort. These include Auto-Investment, Dual Investment, Simple Earn, and ETH Staking. Some of these specialized tools use algorithms to automate the process of crypto investments. Although each product employs different strategies, they all share the common feature of offering subscription-based investments with specified APR (Annual Percentage Rate) or interest rates.

Each of these tools offers varying Annual Percentage Rates (APR) for different cryptocurrencies. The rates depend on factors such as the nature of each asset, market volatility, and demand. Dual-investment products, which exploit market volatility to generate profits, typically offer higher APR or APY rates compared to other products.

Auto-Investment

Auto-investment is a tool that uses a Dollar-Cost Averaging (DCA) strategy to fully automate periodic investments in cryptocurrencies. Users can set up auto-investment plans for specific cryptocurrencies to invest at regular intervals, which helps mitigate the effects of market volatility. The effectiveness of this strategy depends on the correct adjustment of parameters and timing. While auto-investment allows fully automated investments, it may not always yield profits if investments are poorly timed or if the market moves unfavourably.

Users can create up to 100 auto-investment plans for different cryptocurrencies. They can choose to create individual plans for single cryptocurrencies or portfolio plans for multiple cryptocurrencies.

Dual Investment

Dual-Investment is an interesting tool that leverages the basic investment strategy of “Buy Low and Sell High.” This tool offers two types of products: Buy Low and Sell High.

Buy Low Product: This product automatically purchases crypto assets at a specified target price or lower on the settlement date, helping to hedge against market volatility.

Sell High Product: This product automatically sells crypto assets at a specified target price or higher on the settlement date, aiming to generate profits.

Users can select the Basic Auto-Compound feature to automate the re-subscription of products if the target price is not reached. Alternatively, they can use Dynamic Auto-Compound, which works similarly to Basic Auto-Compound but with the added ability to automatically re-subscribe to the opposite investment position. For example, if you subscribe to a Buy Low product and the target is reached, Dynamic Auto-Compound will subscribe to a Sell High product to sell the newly acquired crypto at the target high price.

Simple Earn

Binance has integrated its old products such as locked staking, locked savings, and flexible savings into the Simple Earn product to simplify the subscription experience. Users can subscribe to products with either flexible or locked terms to earn interest. Simple Earn differs from traditional staking in that it combines multiple strategies such as on-chain staking, lending, and other operations within Binance Business Units. This combination allows Simple Earn to provide higher APR rates than traditional staking. The APR rate for non-stable assets is dynamic and depends on asset market volatility and Binance’s business operations.

By subscribing to products with flexible terms, users can redeem their assets and rewards at any time. In contrast, fixed products require users to redeem assets and rewards only after the subscription period, which typically ranges from 15 to 120 days.

ETH Staking

Binance’s ETH Staking is a secure and user-friendly service that allows users to stake their ETH to earn rewards. Unlike traditional ETH staking, Binance’s service issues WBETH tokens, which represent the staked ETH. These WBETH tokens can be utilized for various purposes, including spot trading, liquidity farming, and lending. You can start staking with as little as 0.0001 ETH, and while your assets are locked for blockchain validation, you can still benefit from the utility of WBETH tokens.

The APR you receive is dynamic and depends on several factors, including on-chain activities and consensus rewards. Binance’s ETH Staking provides an efficient way to stake ETH while also allowing you to leverage your staked assets through WBETH.

Concluding Remarks

Binance offers a range of investment products, including Simple Earn, Dual-Investment, Auto-Investment, and ETH Staking, which provide efficient and user-friendly ways to earn passive income from your crypto holdings. Dual-Investment and Auto-Investment offer automated strategies for crypto investments, while Simple Earn and ETH Staking provide mechanisms for staking your coins to earn rewards. These tools are well-suited for both new and experienced investors. However, it’s important to consider the risks associated with the market volatility of crypto assets. Staying informed about current market conditions is essential for making sound investment decisions.

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Top 5 crypto loan services in 2024

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crypto loan providers

How Crypto Loans Work

Blockchain technology has enabled several innovative financial products and Crypto loans, issued by crypto lending platforms, are one example. Similar to traditional banking systems where borrowers provide assets or properties as collateral, users provide cryptocurrency as collateral to lending platforms. In the DeFi market, both collateralized and non-collateralized loans are available, each with different risk levels for lenders.

Lending platforms such as Compound and Aave allow lenders to deposit their assets into liquidity pools, which are then utilized to fund loans to borrowers. In return, lenders can earn interest based on the specific Annual Percentage Rate (APR) set by the platform, which may vary depending on the supply and demand for different cryptocurrencies.

Selecting The Best Loan Provider

Unlike traditional loans, the amount a borrower can receive and the size of collateral they must deposit depends on market volatility, liquidity, interest rate and demand for specific crypto assets. These factors govern the Loan-To-Value (LTV), which is the ratio of loan amount to collateral value. Most lending platforms typically offer LTV ratios of 25% or lower for volatile and riskier assets, meaning borrowers can take out loans worth up to 25% of the collateral they deposit, while taking benefit of lower interest rates.

When selecting a specific lending platform, consider factors such as LTV ratio, liquidity, and market volatility of asset you want to use as collateral. Loans backed by stablecoins are generally better, offering lower interest rates and greater stability of value. In this article, we review the top 5 secure and reliable loan providers.

  1. Aave

Aave is one of the best DeFi loan provider known for flash loans and collateralized loans. This platform operates on Ethereum blockchain as decentralized lending platform, enabling users to lend or borrow cryptocurrencies. Flash loans are an innovative financial service, that allows borrowers to obtain loans without collateral, with the requirement that funds are repaid within single transaction block. These loans are not intended for long-term use but are instead utilized for short-term financial strategies such as arbitrage trading, and debt refinancing.

Interestingly, Aave also supports collateralized loans with both variable and stable interest rates. Users have ability to choose from wide range of cryptocurrencies for collaterals. They also have flexibility to repay loan at any time.

  • Compound Finance

Compound is a prominent lending platform operating on the Ethereum blockchain. Lenders can deposit funds into liquidity pools, which are then used to provide loans to borrowers at specific interest rates. Compound Finance functions as a decentralized autonomous organization (DAO), meaning it is governed by a community of token holders. The COMP token, Compound’s native token, is used for voting on governance proposals and protocol changes.

As a DeFi platform, Compound utilizes smart contracts to automate and secure transactions, offering a trustless financial system for users. Borrowers can take out collateralized loans, with interest rates that are dynamically adjusted in real-time based on the supply and demand for each asset. Lenders, in turn, can earn passive income by providing liquidity to the pools.

  • YouHodler

YouHodler is a centralized lending platform that offers loans in a wide range of cryptocurrencies. The platform is known for its unique features, including a high LTV ratio of up to 97%, approximately 79 collateral options, and advanced loan management tools. With a 97% LTV ratio, users can borrow up to $97 worth of crypto by providing only $100 in collateral.

The platform features a user-friendly loan calculator that allows users to easily adjust loan terms, and it also offers flexible repayment options. The combination of flexible loan terms, high LTV ratios, and competitive interest rates makes YouHodler a strong option for crypto loans. The service is accessible via both desktop and mobile applications.

  • CoinRabbit

CoinRabbit is a centralized lending platform known for its user-friendly interface and flexible loan terms. Notably, the platform supports a wide range of collateral options, currently offering 222 cryptocurrencies. Users can take out collateralized loans and repay them at any time. Loans can be processed and approved within 15 minutes or less, depending on the collateral. Once the loan is repaid, users can typically receive their collateral back within an hour. To ensure security, users’ funds are stored in cold storage.

Additionally, CoinRabbit allows users to open savings accounts and deposit cryptocurrencies to earn interest. The Annual Percentage Rate (APR) varies based on the type of crypto asset, as well as its supply and demand. Users can also deposit stablecoins such as USDT and USDC to earn rewards.

  • Binance

Binance is a leading cryptocurrency exchange popular for its comprehensive financial services. The platform offers a range of features including advanced trading tools, staking options, and robust loan services. Binance provides two types of crypto loans: Flexible Rate Loans and Fixed Rate Loans. Flexible Rate Loans are over-collateralized with dynamic interest rates, while Fixed Rate Loans offer predetermined interest rates. Both loan types support a wide array of cryptocurrencies for collateral and borrowing. Users benefit from zero transaction fees and flexible repayment options.

Moreover, Binance users can utilize the Binance Earn feature to deposit their assets and earn rewards through various strategies such as lending, liquidity mining, staking, and other investment operations.

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Introduction to Dual Investment: Earning Money with Binance

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dual investment

Dual Investment: Buy Low and Sell High

Dual investment is a popular strategy that leverages the market volatility of crypto assets to generate profits. This strategy involves buying an asset at a low price and selling it at a higher price, capitalizing on price fluctuations. While this approach can be executed manually, platforms like Binance and Kucoin offer specialized tools that automate the process, making it more efficient and accessible.

To maximize profits, investors need to have a sound understanding of market trends and future price movements. By purchasing an asset at its lowest point within a given period (such as the weekly low) and selling it when it reaches a higher point (such as the weekly high), investors can achieve substantial returns. Additionally, diversifying investments across multiple crypto assets can provide protection against the volatility of a single asset, reducing overall risk.

How Dual Investment Works

The Dual Investment tool functions similarly to limit and conditional order types, executing trades at a specified future date and price. It allows users to leverage the market volatility of cryptocurrency assets by controlling the timing of trade execution. There are two main types of Dual Investment products: Buy Low and Sell High.

Buy Low: This product enables you to buy a specific cryptocurrency at a target price on the settlement date. If the market price is at or below the target price on the settlement date, the trade will be executed.

Sell High: This product allows you to sell a specific cryptocurrency at a target price on the settlement date. If the market price is at or above the target price on the settlement date, the trade will be executed.

If the Buy Low product successfully acquires cryptocurrency for you at the target low price, you will need to manually set up a Sell High product for the newly acquired cryptocurrency. This Sell High product will sell the cryptocurrency at your target price in the future to potentially earn a profit. Trades are executed only on the settlement date if the target price is reached. Consider using the auto-compound feature to automatically re-subscribe to new dual investment opportunities at each settlement date if target price is not reached.

Starting Investment on Binance

Before subscribing to dual-investment products, it’s crucial to understand the key terminologies. Target price is the specified future price at which you aim to buy or sell your cryptocurrency. Settlement date is the date when the trade is executed and you receive your returns. Deposit currency is the cryptocurrency that you need to deposit to subscribe to product, and target currency is the cryptocurrency you want to receive. And finally, subscription period is the time between subscription date and settlement date.

To make informed decisions, analyze weekly or monthly price movements using charting tools and indicators to determine the optimal settlement date and target price. If you have subscribed to multiple Dual Investment products, monitor their performance closely. The Basic Auto-Compound feature, enabled for each subscription, will automatically re-subscribe you to the plan on each settlement date unless the target price is reached or you choose to turn it off.

Risks and Rewards

The profitability of dual investment strategies largely depends on the target price and market movements. If the market moves in the favourable direction, the trade will be executed, potentially generating significant profits. Success in this strategy depends on accurately predicting favourable market movements and setting optimal settlement dates and target prices.

During the subscription period, interest earnings accumulate and are distributed at settlement. To continuously benefit from investments, consider using the Advanced Auto-Compound feature, which re-subscribes you to a new position based on market conditions. If the target price is reached, the Advanced Auto-Compound feature will open a new position in the opposite direction. For example, if a Buy Low product successfully acquires cryptocurrency at the target price, the system will automatically set up a Sell High position for the same asset.

However, if the market does not move as anticipated, investors may incur losses. Persistent unfavourable market conditions where the target price is not reached could delay profit generation and potentially result in losses. The Auto-Compound feature will continue to re-subscribe to new positions based on the initial strategy, but this may not always lead to profitable outcomes if market conditions are consistently adverse.

Concluding Remarks

Dual-investment products, just like auto-investment and staking products, allow investors to earn passive income with crypto. These products use algorithms for automating the execution of trades at specified date and price, allowing investors to capitalize on crypto market conditions. The general principle of dual-investment is simple: Buy Low and Sell High. Users can buy crypto assets at low price and sell at high to earn profits. The return on investment (ROI) depends on target price, settlement date, nature of crypto asset and its market conditions. That’s why, sound knowledge of crypto market can be helpful in the strategy.

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