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The Future of Yield Farming: Innovations and Ethereum’s Role

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yield aggregation

Rise of Yield Aggregators

Yield farming, which involves generating rewards through strategies such as liquidity farming, lending, and staking has evolved into a more advanced strategy known as yield aggregation. In yield aggregation, smart contracts automatically reallocate the user’s assets across multiple DeFi protocols to achieve the highest possible returns. Yearn Finance is a DeFi platform that pioneers this strategy, providing a strategic advantage to investors by automating the process and optimizing returns across various protocols.

Yield aggregators like Yearn Finance, Beefy Finance, and Convex Finance have gained popularity for automating traditional yield farming, optimizing returns, and reducing the need for manual management.

Yield farming is a new technique to make money in the world of cryptocurrency. It allows users to earn money by lending their digital tokens to other sites. This post will highlight seven significant developments in produce farming and how Ethereum, a prominent blockchain, is contributing to these improvements.

Beginner Guides

What is Yield Farming?

Yield farming is similar to putting your money in a bank to earn interest. Yield farming involves locking up your cryptocurrency on a platform to collect incentives. You offer liquidity, which means you ensure that the platform has enough coins for trade. In return, you receive tokens that may be used to make additional money.

1. Layer Two Solutions

Layer 2 solutions have shown a significant shift in yield farming. Ethereum might be expensive to use because to its hefty fees. Layer 2 solutions help to reduce these fees by moving transactions away from the main Ethereum network.

Benefits:

This makes high-yield farming more affordable and accessible to a larger population. Users can finish transactions much more quickly.

Examples include a popular Layer 2 solution that enables token farming with cheaper fees. Another alternative for processing transactions fast and inexpensively.

2. Cross-Chain Yield Farming.

Cross-chain yield farming enables users to earn incentives on many blockchains. This implies you may farm tokens not only on Ethereum, but also on other networks.
Benefits: Invest in many platforms to lessen risk. Users may discover new initiatives to invest in.

Examples include a network that supports trade and farming over many blockchains. A platform that allows users to effortlessly trade tokens across several networks.

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3. Automatic Yield Farming

Automated yield farming employs technology to assist people earn more without having to continually check. These systems automatically transition between different agricultural possibilities to maximize earnings.

Advantages: No need for daily monitoring once set up. Automated systems respond fast to market fluctuations.

Examples include a platform that optimizes investments automatically. Another service that completes the task for you.

4. Liquidity Mining Incentives.

Liquidity mining allows initiatives to recruit users by paying prizes. When you supply liquidity, you might receive unique tokens from the project.

Benefits: Participating in these programs might lead to significant earnings. Token distribution enables projects to build a devoted user base.

Examples include a decentralized exchange that pays people who provide liquidity. Offers distinct incentives to liquidity providers.

5. Yield Aggregators.

Yield aggregators are systems that pool funds from several customers to optimize profits. They manage investments across many protocols to guarantee that users get the most.
Benefits: Participation is open to anybody, regardless of expertise. By combining resources, these platforms can identify greater prospects.

Examples: Automatically reinvests earnings to increase earnings potential.

Concentrates on maximizing stablecoin farming.

6. NFTs in Yield Farming.

Non-fungible tokens (NFTs) are unique digital assets that are currently being employed in yield farming. Some initiatives allow users to receive prizes by submitting NFTs as collateral.
Benefits: NFTs can increase the value of your assets. Using NFTs makes yield farming more engaging.

Examples include yield farming using NFTs, enabling users to profit via collectibles. Invests in NFTs for yield farming, allowing gamers to profit while playing.

7. Governance Tokens

Governance tokens let users participate in the projects they support. Holders of these tokens can vote on crucial platform decisions.

Benefits: Users feel more engaged when they can affect the project. Governance tokens may rise in value, offering additional incentives.

Users can earn COMP tokens by providing liquidity and use them to vote on improvements. Holders of AAVE tokens can participate in governance decisions.

stock market 6693060

The Technology Behind Yield Aggregation

Yield aggregators operate using two strategies. One strategy is allocating users’ assets across the most profitable DeFi protocols that offer the highest APY. The second strategy is reinvesting the rewards into new yield opportunities or previously used DeFi protocols. Yield aggregators may also strategically reallocate assets to capitalize on better yield opportunities, generating significantly higher rewards compared to traditional yield farming. Yield aggregation can be done manually, but it requires users to spend hours searching for profitable yield farms, along with additional time for reallocation and reinvestment of assets. Yield aggregators simplify and automate this process, saving time while maximizing profits.

Yearn Finance uses complex smart contracts known as vaults, built using the Solidity programming language. When users deposit assets in Vaults on Yearn Finance, they receive yTokens, representing their assets and accumulated interest (rewards), which can be redeemed later. Yearn Finance also integrates with other DeFi protocols, and once it identifies the best yield opportunities, its smart contracts deposit users’ assets into platforms like Compound, Aave, and Curve. However, the multiple options available on the platform may overwhelm certain users, especially those new to yield farming.

Other yield aggregators, like Beefy Finance, also operate using similar technologies and strategies. A common feature among them is that they use smart contracts to deploy users’ assets across different DeFi protocols and may also use data feeds, such as those provided by Chainlink, for decision-making. While the underlying strategies employed by these platforms might be similar, the rewards generated from yield aggregation are often time-sensitive, as APY rates fluctuate. Another thing to keep in mind is that the combination of DeFi protocols where assets are deposited is not fixed and depends on liquidity pools or lending assets currently offering the highest APY.

How Ethereum Blockchain Powers the Yield Farming Ecosystem

Yield aggregators such as Yearn Finance and Harvest Finance are built on the Ethereum blockchain and rely on Ethereum’s smart contract infrastructure. Yearn Finance’s smart contracts, coded using the Solidity programming language, automate the process of asset deployment across various DeFi platforms. Ethereum’s ability to handle multiple transactions enables Yearn Finance to manage large volumes of assets across several DeFi protocols efficiently. These smart contracts also benefit from Ethereum’s transaction processing speed and scalability.

Importantly, there is no single point of failure, as the smart contracts securely execute transactions on the Ethereum blockchain. This ensures true decentralization, with no centralized entity controlling the transactions, since they are executed by smart contracts on a blockchain.

The future of yield aggregators is closely tied to the Ethereum blockchain. Ethereum provides the essential smart contract functionality needed for the automated, fast allocation, reinvestment, and compounding of large volumes of assets across multiple DeFi protocols. Without Ethereum’s transaction processing capabilities and scalability, a yield aggregator built on a less efficient blockchain may struggle to execute simultaneous transactions at the required speeds, leading to missed opportunities, especially as APY rates fluctuate over time.

Concluding Remarks

Yield aggregation has become a popular strategy offered by platforms that integrate with multiple DeFi protocols. These yield aggregators deploy users’ assets and auto-compound rewards across several platforms to generate the highest possible returns. The essential technologies that enable this process are smart contracts and real-time data feeds. Since the functionality and efficiency of smart contracts are largely dependent on the capabilities of the underlying blockchain, the future of yield aggregators is closely tied to the future of the underlying blockchain. Ethereum currently powers most DeFi platforms, especially yield aggregators.

The future of yield farming is bright, with several intriguing developments. The yield farming environment is changing, from Layer 2 solutions that save money to cross-chain farming that opens up new prospects. Ethereum remains a major participant in these developments.
As yield farming grows easier and more user-friendly, more individuals are likely to participate. Staying up to date on these advancements can help you capitalize on new prospects in yield farming. Whether you are new to cryptocurrency or have some expertise, the future of yield farming promises an exciting path!

Top 5 DeFi platforms for yield farming in 2025

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yield farming 2025

Yield Farming: Profitability & Risks

Yield farming is the process of providing liquidity on decentralized exchanges, lending crypto, or a combination of both. You earn rewards for your contribution to these decentralized platforms. As more people realize the benefits of decentralized finance, such as crypto loans, P2P trading, and NFT trading, the popularity of decentralized platforms like Uniswap, PancakeSwap, and Compound continues to grow. Another reason for their growth could be their unique approaches to providing complex financial services that are not possible with traditional finance. For example, Uniswap utilizes an Automated Market Maker (AMM) system to enable high liquidity levels, facilitating seamless decentralized trading between crypto investors. Transaction fees are low due to the low operational costs.

On PancakeSwap, you can lock your assets in several liquidity pools to earn rewards, with APR (Annual Percentage Yield) influenced by factors like market demand and staking period. A crypto pair with high trade volume, such as USDT/ETH, would generate more transaction fees, resulting in a higher APR if your assets are deposited in that liquidity pool. Additionally, you can reinvest the earned rewards back into the pool using the Auto-Compound feature to generate more rewards.

1. Pancake Swap

Being one of the world’s largest decentralized exchanges, PancakeSwap offers a wide range of tradable crypto pairs, primarily supporting the BNB Chain. The high trade volume of many cryptocurrencies contributes to the substantial APR rates offered on this platform for liquidity farming. Another interesting feature is concentrated liquidity, which allows users to set a price range within which they want to provide liquidity.

Currently, PancakeSwap’s 24-hour trade volume stands at $2.64B, with $2.17B held in USDT, highlighting the dominance of USDT as a base trading currency. This also explains why liquidity pools involving USDT typically offer higher APR compared to those with other stablecoins.

2. Yearn Finance

It is a popular decentralized platform built on the Ethereum blockchain, dedicated to yield farming services. Yearn Finance innovates yield farming by strategically searching several DeFi protocols for the highest interest rates across liquidity farming, staking, and lending, providing the highest possible rewards.

Once users deposit their assets in Yearn Finance’s vaults, these assets are then used across different DeFi protocols to generate yields from liquidity farming, lending, and other activities. This allows users to capitalize on multiple DeFi protocols rather than rely on just one for yield farming.

3. Uniswap

Uniswap is the world’s largest decentralized exchange (DEX) by trading volume. Its sustained dominance can be attributed to several factors, with the most significant being the early adoption of the Automated Market Maker (AMM) model. This technology enables decentralized trading with low fees while maintaining good liquidity. Uniswap’s strategic partnerships with other platforms have also contributed to its growth and expansion of its user base.

A diverse range of crypto pairs is available for liquidity provision to earn yields. If you’re looking for advanced features like concentrated liquidity—the ability to set specific price ranges—then Uniswap would be a good choice.

4. Curve Finance

Curve Finance is a decentralized exchange enabling efficient trading of crypto, especially stablecoins, with reduced slippage. Liquidity providers (LPs) earn transaction fees by depositing their assets into liquidity pools, while experiencing lower impermanent loss compared to other decentralized exchanges. These features make Curve Finance a good choice among DEXs. Similar to Uniswap and Pancake Swap, Curve Finance also allows LPs to take advantage of concentrated liquidity to make better rewards.

Alongside providing trading and liquidity services, Curve Finance also ensures strong security measures. Its smart contracts have undergone multiple audits by security firms, and it has taken measures to prevent phishing attacks.

5. Compound

Compound Finance is one of the top DeFi platforms used for lending and borrowing crypto. It operates using a dynamic interest rate model, where borrowing and lending rates adjust automatically based on supply and demand, providing competitive rates for borrowers.

Lenders can deposit assets on the platform to earn interest, which compounds over time. Additionally, they receive COMP tokens as incentives for providing liquidity. COMP tokens can be used for governance, allowing token holders to vote on platform upgrades and policies.

As a highly audited DeFi protocol, Compound Finance is considered relatively secure for crypto lending and borrowing. Borrowers can access loans by depositing collateral, with no KYC requirements, making the process fast and globally accessible.

Cryptocurrency Staking vs Stablecoin Staking: A Comparison of Profitability and Risks

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crypto staking

How does Crypto Staking Works?

Crypto staking is a decentralized way of contributing to blockchain security by locking your assets in a contract for a specific period. Based on the amount of assets you lock, you may be selected as a validator, allowing you to run node software that validates transactions and adds blocks to the blockchain. In return, you receive rewards in the form of coins for your contribution.

Alternatively, if you don’t want to run node software yourself, you can delegate your assets to someone else or a third party (such as a crypto exchange) that runs the node software on your behalf. In this case, you receive a portion of the rewards based on the amount you staked.

It’s important to note that you typically earn more rewards if you run the staking process yourself, as you won’t have to share the rewards with a third party. However, delegating your assets can be more convenient if you don’t want to manage the technical aspects of running a validator. Traditional crypto staking involves assets whose value can fluctuate based on market demand, which means both the rewards and the value of the staked assets may vary over time.

How does Stablecoin Staking Works?

Stablecoin staking is similar to crypto staking, where you lock your assets in a contract but these assets are used for liquidity, lending or other purposes. Another key difference is that you are using assets with a stable value. Stablecoins are typically pegged to real-world assets like USD, or they may use other mechanisms to stabilize their value. When you stake these assets, you can potentially earn a predictable amount, since the value of the stablecoin does not fluctuate significantly.

Both decentralized and centralized platforms offer stablecoin staking services, with decentralized platforms often providing higher rewards due to lower fees and operational costs.

Cryptocurrency Staking: Risks & Rewards

The major risk in crypto staking is crypto price volatility. The price of cryptocurrencies fluctuates based on market demand, trading volumes, and macroeconomic events, such as regulatory changes affecting trading platforms. For example, if you stake a specific amount of ETH and the price of ETH decreases before the staking period ends, the value of both your staked assets and the rewards could be lower. Therefore, understanding price trends and market conditions is important when deciding the right time to stake.

Other risks include slashing, where you could lose a portion of your staked assets if the validator you are using is penalized by the blockchain network for misbehavior (such as double-signing or being offline for too long). Platform security risks are also involved if you’re using a third party (such as a crypto exchange) for staking, as the security of your assets is dependent on the security of the platform.

The rewards you get for staking depend on the APR rate (Annual Percentage Yield), which in turn depends on the supply of staked tokens, blockchain network usage, transaction fees, and the reward distribution system of the blockchain. Ethereum and Polkadot are the prominent blockchains offering good reward rates, around 4-6% and 10-15% respectively. On the Binance platform, you get an APR of 2.63% for ETH staking, which is slightly lower due to operational costs. On the other hand, you get an APR of around 3% on ethpool for ETH staking, which is a decentralized pool staking service. Typically, decentralized staking services are a better option since they offer higher rewards while also providing full control over funds.

Stablecoin Staking: Risks & Rewards

While the risk of crypto price volatility is reduced in stablecoin staking, other risks come into play. One major risk is the vulnerability of smart contracts, which could lead to the loss of funds if a hacker exploits this vulnerability. Additionally, the platform you’re using to stake stablecoins may experience liquidity issues, preventing withdrawals or trading of the crypto. The safety of your assets can also be compromised if the platform doesn’t implement necessary security measures. Apart from these risks, one potential issue could arise from the stablecoin itself. If the real-world asset to which the coin is pegged devalues, the value of the stablecoin may also decrease. Furthermore, the stability of algorithmic stablecoins relies on the smart contract design of the underlying algorithm. It’s preferable to use reputable stablecoins like USDT or USDC for staking to minimize exposure to unnecessary risks.

Although profitability of stablecoin staking depends primarily on the APR (Annual Percentage Rate), it is also influenced by features such as auto-compounding, platform fees, and lockup periods. Auto-compounding, through continuous reinvestment, increases the rewards over time. Locked staking typically offers higher APR but requires you to lock your funds for a specific period. While stablecoins’ stable value reduces price risk, other risks like liquidity and platform security remain. Overall, stablecoin staking is a low-risk investment option with moderate rewards.

Profitability Comparison

The primary factor determining the APR (Annual Percentage Yield) is the activities for which your locked assets are utilized. Cryptocurrencies such as ETH, SOL, and DOT, which are native coins of their respective blockchains, are staked to secure blockchain networks. This activity provides substantial rewards to validators contributing to the network’s security.

On the other hand, stablecoins are typically staked for lending purposes or liquidity provision. These are low-risk activities and, as a result, yield lower returns. This is why stablecoins generally offer a lower APR compared to other cryptocurrencies, as the risk factor is minimal. Despite their lower profitability, stablecoins offer advantages such as predictable returns, making them a worthwhile investment.

For those seeking higher profitability with stablecoins, alternative options are available. For example, on PancakeSwap, currently you can earn an APR of 65% by providing liquidity to a USDT-ETH liquidity pool. The high rewards result from the strong demand for these cryptocurrencies, combined with compounding features.

Concluding Remarks

Both stablecoin staking and cryptocurrency staking come with their own unique risks and rewards. For risk-averse investors or beginners, stablecoin staking might be the best option, as it provides predictable rewards. On the other hand, professional investors who can perform technical analysis and track price trends may stake high-risk assets at the right time for good profits.

It’s also important to be aware of risks such as impermanent loss, which occurs when the price of an asset in a liquidity pool changes compared to when you deposited it, as well as platform security risks. Despite the low profitability of stablecoin staking due to its lower risk, you can still earn good rewards by staking high-demand coins with auto-compounding features.

Top 5 green blockchain projects in 2025

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green blockchain

Since the creation of the world’s first cryptocurrencies, there has been an abundance of blockchains that relied on the Proof-of-Work (PoW) consensus mechanism, which required powerful hardware for cryptocurrency mining. The significant energy consumption and increased carbon footprints associated with PoW have raised concerns about the environmental sustainability of blockchain technology. In response, many blockchain companies have taken the initiative to shift toward more environmentally sustainable consensus mechanisms such as Proof-of-Stake (PoS).

One prominent example is the transition of the Ethereum blockchain from PoW to Proof-of-Stake (PoS), which significantly reduced the network’s energy consumption and carbon footprint. Moreover, several blockchain projects have emerged that allow users to invest in carbon offset initiatives, providing innovative ways to reduce carbon footprint and promote sustainability.

1. Bitcoin Minetrix

      Bitcoin Minetrix is a cloud mining platform that utilizes a very unique approach –  decentralizing the process of cloud mining. Users can stake BTCMTX tokens to earn mining credits over time. These credits can then be exchanged for Bitcoin mining power, allowing users to earn mining rewards. The entire process is conducted on the blockchain, ensuring transparency and security, so users are rest-assured their investment is safe.

      The project was inspired by the need to address the prevalence of cloud mining scams in the past, as interest in cloud mining continues to grow. According to Infiniti Research Limited, the BTC mining industry is expected to grow by $12 billion between 2022 and 2027, fueled by the rise of firms dedicated to BTC mining.

      2. Etuktuk

      Etuktuk is an interesting blockchain project that uses the Play-to-Earn model to help users earn crypto. In this P2E blockchain game, users can purchase the vehicle and other in-game items using the $TUK tokens and earn more tokens by completing several missions. Similar to the Decentralized Autonomous Organization (DAO), the $TUK token can also be used to vote on game upgrades and contribute to its development.

      Behind the blockchain game, Etuktuk also runs an initiative to support Electric tuktuks by offering strategically placed Electric Vehicle Supply Equipment charging stations (EVSE). The stations enable drivers to charge their vehicles and conduct transactions using the $TUK tokens. By doing this, this project aims to promote electric vehicles and reduce carbon footprint.

      3. Polkadot

      Polkadot is one of the world’s largest interoperable blockchain networks, connecting multiple blockchains seamlessly while providing scalability for handling high transaction volumes. Developers can build custom blockchains within this ecosystem and take advantage of Polkadot’s robust security architecture, cross-chain messaging, fast transaction processing, and cross-chain bridges.

      Polkadot employs a unique consensus mechanism called Nominated Proof-of-Stake (NPoS), where validators and nominators work together to achieve network security. Validators run nodes and validate transactions, while nominators select trustworthy validators. Both validators and nominators must stake their DOT tokens, and the selection process for validators is randomized, ensuring true decentralization. This mechanism uses low-energy nodes, eliminating the need for high computational power, and distributes the workload to smaller, independent blockchains, allowing for efficient and cost-effective resource usage across the network.

      4. SolarCoin

      SolarCoin aims to incentivize solar energy production by offering rewards to those who generate or contribute to generating solar energy. Users receive rewards in SolarCoin (SLR), which can be traded on cryptocurrency exchanges. Individuals or companies can register their solar installations, submit proof of their energy generation, and receive 1 SolarCoin for every 1 MWh (megawatt-hour) of electricity produced.

      The project is built using SolarCore, a Layer 1 blockchain framework that employs a Delegated Proof-of-Stake (DPoS) consensus mechanism. The transaction validation process in DPoS is more resource-efficient compared to traditional Proof-of-Work mechanisms, and anyone can become a validator to contribute to network security. SolarCoin also operates on a Decentralized Autonomous Organization (DAO) model, enabling users to participate in governance and platform development.

      5. Flow

      Flow is a blockchain network that allows developers to build decentralized applications (DApps) and blockchain-based applications while benefiting from Flow’s scalability. This network enables developers to write upgradeable smart contracts using a new, user-friendly programming language called Cadence. Flow achieves fast transaction speeds without relying on traditional sharding or Layer 2 solutions. It achieves this through a multi-node architecture, where the workload is distributed among different types of nodes, such as:

      Collector Nodes: These nodes collect and validate transactions.

      Consensus Nodes: These nodes handle the consensus process (i.e., determining the order of transactions).

      Execution Nodes: These nodes execute smart contracts and process transactions.

      Verification Nodes: These nodes ensure the integrity of the system and validate transaction execution.

      This blockchain is designed to be environmentally sustainable by using a Proof-of-Stake (PoS) consensus mechanism, which significantly reduces the energy consumption compared to Proof-of-Work (PoW) systems. This approach ensures a low carbon footprint of those who participate in the transaction validation process.

      Concluding Remarks

      Many blockchain projects are now adopting environmentally-sustainable mechanisms like Proof-of-Stake (PoS) to make the transaction validation process more resource-efficient. This helps minimize the carbon footprint. Some blockchain projects even enable users to pay for environmentally-sustainable activities, such as charging electric vehicles (EVs), using cryptocurrencies. With the growing popularity of green blockchain initiatives, more people may be inclined to adopt such cryptocurrencies due to their additional environmental benefits, driving the further growth of these projects.

      Maximizing Your Crypto Profits: A Guide to Using Investment Calculators

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      investment calculator

      Doing Investment Planning

      Profit/loss calculations become crucial if you are trading multiple cryptocurrencies. By knowing how much profit you might earn in a specific cryptocurrency, you can make more informed decisions. For this purpose, several tools are available that allow users to calculate potential profits or losses.

      This also brings our attention to automated investment tools, such as DCA trading bots, which may offer insights into potential profits for a specific cryptocurrency with a given investment size.

      In this article, we will explore various investment calculators that you can utilize to gain insights into profits and losses.

      Utilizing Investment Calculators

      Investment calculators allow users to calculate profit or loss by selecting the investment amount and sell price for any cryptocurrency. For example, if you select BTC, whose current price is $96,541.38, and set the sell price as $99,500, an investment amount of $500, and fees as $2, the estimated profit would be $13.3. The calculator is very useful for knowing the potential profits or losses you can earn when you invest a specific amount of money in a specific cryptocurrency.

      The profit is calculated using this formula:
      (InitialInvestment−InvestmentFee)∗(SellPrice/BuyPrice)−InitialInvestment−ExitFee

      In our case:
      ($500−$1)∗($99,500.38/$96,541.38)−$500−$1=$13.3

      Platforms like CoinStats provide a profit/loss calculator and allow you to connect your Binance portfolio so you can manage your assets easily.

      The simple profit/loss calculator is typically limited to one-time investments and cannot estimate profit for DCA investments. In DCA, you purchase smaller amounts of crypto at regular intervals. Due to price fluctuations at each purchase, your average cost per unit changes over time, which impacts your overall profit or loss if you decide to sell. Therefore, calculating the profit for DCA investments requires an analysis that accounts for each purchase and its corresponding price.

      Investment Calculations for DCA investments

      While several tools are available that allow calculations for DCA investments, they often lack the comprehensive insights needed to evaluate potential profits. Auto-invest tools provided by some crypto exchanges are a better alternative, as they allow users to set automated recurring investment plans and often provide profit insights. Alternatively, you can manually calculate your DCA trading plan, though this may require more effort. By following a structured approach, you can estimate the potential profits of your DCA strategy effectively.

      Example: Suppose you want to invest $500 over 5 weeks in BTC.

      Week 1: BTC price = $90,090, and you buy 0.001111 BTC for $100.

      Week 2: BTC price = $86,000, and you buy 0.001163 BTC for $100.

      Week 3: BTC price = $87,000, and you buy 0.001149 BTC for $100.

      Week 4: BTC price = $88,000, and you buy 0.001136 BTC for $100.

      Week 5: BTC price = $86,000, and you buy 0.001163 BTC for $100.

      After 5 weeks, the BTC price is now $96,000. Your investment is worth 0.005722 BTC or $549.312.

      If you had purchased $500 BTC at the price of $90,090, you would have received 0.00555 BTC, which would now be worth $532.80.

      In the case of DCA, the final profit is higher because you invested at times when the price was lower than the initial price. In your trading plan, you need to set lower price capture points (price levels where you expect to buy) and record how much BTC you would acquire at each price. Then, execute the strategy and record how much BTC you acquired and how much profit you earned. Use previous records to set new goals for the next trading plan.

      By having the goals in mind, you can invest consistently when the price hits a low point and gradually acquire more BTC compared to a lump sum investment. DCA does not always yield better profits, but in most cases, it can reduce the impact of price volatility on your total investment.

      Profit Calculation for Crypto Staking

      Staking rewards are often dynamic, influenced by factors such as network usage, inflation rates, and overall crypto market conditions. That’s why the staking rewards calculators estimate your profit based on specific reward rates or APR rather than providing the exact profit amount.

      Some calculators use information such as average price of crypto during the staking interval, your investment amount, and the APR or reward rate. For example, if you stake 0.3125 ETH (worth $1,000 at an ETH price of $3,200) for a 12-month duration at an APR of 3.3%, your estimated profit would be $33 after one year.

      While no calculator is perfectly accurate, it’s recommended to utilize the tools that allow full customization of parameters such as APR, crypto price and staking duration.

      Concluding Remarks

      To make better investment decisions, you can utilize investment calculators and plan your future investments effectively. By understanding how much profit you can earn from specific cryptocurrency, you can allocate portions of your target investment to different crypto assets. Investment calculators provide insights into potential profits and help you evaluate different investment opportunities.

      We recommend using tools that allow complete customization of input parameters so you can estimate profit for all possible scenarios. Interestingly, trading bots come with built-in profit calculators. So, if you are planning to do automated trading, make sure you read this article to learn more about that.

      A Comprehensive Review of Auto-Invest Tools Across Top Crypto Exchanges

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      crypto auto-invest

      How auto-investment works

      Auto-investment tools use the DCA strategy and allow users to automatically invest specific amounts of crypto at regular intervals. These tools come with additional benefits such as staking rewards which allow your portfolio to grow over time. You can create auto-invest plans for a single cryptocurrency or multiple cryptocurrencies, depending on your budget.

      This tool is a great option for beginners who are willing to use DCA strategy to overcome crypto price volatility. The DCA strategy reduces the impact of price volatility on investment by distributing small investments at different prices to average out the cost per unit.

      Binance Auto-Invest: Flexible Plans with Earnings Potential

      Binance primarily offers a one-time plan and recurring plan to grow crypto portfolio. The recurring plan enables regular investments on hourly, daily or weekly, bi-weekly or monthly basis in single or multiple cryptocurrencies, allowing users to acquire crypto. The crypto is then deposited in Simple Earn Flexible Account, providing rewards which can be redeemed anytime. One reason we prefer Binance Auto-invest to be the best tool is the presence of multiple plan templates which have shown performance in the past. You can also create your own custom plan and allocate specific percentages of portfolio value to different cryptocurrencies.

      One thing to remember is that the index-linked plan does not give Simple Earn product benefits as portfolio plans give. It is an advanced automated DCA strategy involving top 10 cryptocurrencies indexed by CMC.

      Bybit Auto-Invest: Advanced Tools for Strategic Growth

      Bybit’s Auto-Invest feature allows complete customization of recurring plans to purchase cryptocurrencies. The tool is beginner-friendly and allows you to select a specific day to execute investments if you choose a weekly schedule, or a specific date if you choose a monthly schedule.

      Unlike Binance, it does not offer index-linked plans or any pre-designed templates to get started easily. Setting up a recurring plan is straightforward and user-friendly. Bybit’s Auto-Invest feature, however, does not include staking rewards or other additional benefits. Its primary focus is on utilizing the Dollar-Cost Averaging (DCA) strategy to help users potentially make profits through regular and automated investments.

      Bitget Auto-Invest: Beginner-Friendly and Simple to Use

      Similar to Binance, Bitget also offers additional staking rewards when users invest their funds using the spot auto-invest tool. The invested crypto is deposited into a flexible savings product, generating daily interest income.

      Bitget’s auto-invest combines two strategies: Dollar-Cost Averaging (DCA) and staking (which generates interest income). This approach helps reduce market volatility risks through small recurring investments while simultaneously enabling passive income.

      Users can redeem their interest rewards at any time, and the auto-invest feature continues generating returns as long as there is sufficient balance in the spot wallet for regular investments. Additionally, you can allocate specific percentages of your total investment across different cryptocurrencies and set the purchase frequency to hourly, daily, or monthly.

      Concluding Remarks

       Auto-invest primarily involves recurring automated investments, but the method of execution and the level of customization vary across different crypto exchanges that provide this tool. This tool is best suited for beginners who want to utilize the DCA strategy.

      On the other hand, DCA trading bots are more advanced, require good trading skills, and may not be suitable for beginners. As mentioned in this review, crypto exchanges like Binance offer additional benefits, such as staking rewards within the auto-invest feature. Therefore, this can be a better option compared to DCA trading bots if you are new or have limited experience in crypto trading.

      Overall, these tools are user-friendly and enable the easy execution of the DCA strategy. Users can invest in multiple cryptocurrencies to diversify their portfolio and reduce the risk of losses.

      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?

      instant exchange

      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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