As the cryptocurrency industry becomes increasingly developed, both the number and variety of investment products available also grow in tow — giving investors more ways to generate a return on their crypto-asset portfolio.
Now, it appears blockchain companies are looking to disrupt the traditional loan and investment product space by giving cryptocurrency holders a way to earn a substantial return with little to no risk.
When most people think cryptocurrencies, the idea of huge returns would likely be one of the first thoughts to spring to mind. However, although it is true that simply holding many cryptocurrencies has historically generated significant returns, this is far from the most profitable way to generate a return in 2020.
For example, many cryptocurrency investors turn to online trading to multiply their stash — trading on a variety of spot exchanges, like Coinbase or XCOEX, or modern cryptocurrency derivatives exchanges like StormGain or Deribit.
However, this practice requires market knowledge, skill, and time to successfully turn a profit, which can make it unsuitable for inexperienced investors or anybody that simply lacks the time to dedicate to trading markets.
Fortunately, a variety of platforms recognized an unmet need in the market and began offering a variety of low-risk cryptocurrency investment products. Although these don’t quite match the incredible gains that are possible with cryptocurrency trading, they do allow customers to generate a healthy profit with almost no risk and no need to liquidate their crypto assets.
The way these services generate revenue differs from platform to platform but typically involves either using customer deposits to fund collateralized peer-to-peer loans or using these funds for margin lending — whereby margin traders temporarily borrow funds to open leveraged positions on exchanges — a process that is surprisingly safe thanks to the automatic liquidation policy held by most…