Here are 3 ways inventors can make money in bull and bear markets

For years, cryptocurrency advocates have been touting the world-changing potential of digital currency and blockchain technology. However, with each passing market cycle, new projects come and go, and the promised benefit does not live up to this “realistic use case” projects.

While the majority of tokens promise to solve real-world problems, only a few make it happen, and some are just speculative investments.

Here is a look at the three things cryptocurrency investors can “do” with their coins.

Lending

Perhaps the simplest use case intro to cryptocurrency holders is also one of the oldest applications of cash in finance: lending.

Since the decentralized finance (DeFi) sector took off in 2020, the opportunities for cryptocurrency holders to lend their tokens in exchange for rewards have multiplied.

Blue chip DeFi protocols such as Aave, Maker, and Compound offer a reasonable return on stablecoins, and less well-known protocols often offer higher rewards in an effort to attract liquidity.

Recently, the field of cryptocurrency lending has expanded into areas that are usually dominated by traditional finance. This is especially true for real estate, where a number of cryptocurrency-based demo and mortgage platforms are making headway.

Platforms such as Vesta Equity and the newly launched USDC Homes offer crypto holders the opportunity to secure their assets for a mortgage or lend them to aspiring homebuyers for a long-term return.

Cultivation of stablecoins

Another way to use the hodl bag is to farm the stablecoins. The cryptocurrency market is known for its high volatility and high-risk trades, but earning a return on stablecoins is a safer way to grow a portfolio without the downside risk of investing in Bitcoin (BTC) and altcoins.

In bull and bear markets, liquidity is required for DeFi protocols to function properly, and the integration of stablecoins on centralized and decentralized exchanges has helped the market to mature and remain sufficiently liquid.

Platforms such as Curve Finance, Beefy Finance and Trader Joe’s offer returns on stable coin liquidity pools, and rates can be as high as 20% APY.

Related: Bipartisan bill to give CFTC power over exchanges and stablecoins

Offers no loss

Another way to “use” the cryptocurrency is to participate in the zero-loss token offerings that are being launched across the ecosystem.

An example of a no-loss token display is the parachine auctions that take place on the Polkadot and Kusama networks. In this type of protocol launch, investors interested in supporting a project can reserve a DOT or KSM for a specified period of time as a form of additional support for the project.

The contributors receive the original token of the newly launched protocol in exchange for locking in their investment in the project’s smart contract. After the specified closing period is completed, the total balance of the tokens is returned to the shareholder, which means that he keeps his original holdings while also adding new assets to his portfolio.

Lockdrops are another example of this type of no-loss symbol display. One of them was recently hired during the launch of Astroport and Mars Protocol.

Lockdrops are also referred to as airdrops because they do not technically help projects raise funds, but rather require a certain level of commitment for future use from the recipient of the token. While Airdrops only distribute tokens to users who choose to subscribe, lockdrops require interested parties to commit to locking up some cash that the project could use during its initial launch.

Astroport’s launch included a new liquidity boot stage where contributors can provide liquidity pool pairs for a higher reward level. At closing, a one-time lock-up bonus is distributed to participants to hold, trade or use to provide liquidity.

Liquidity providers also receive trading fees and other incentives depending on the pool of liquidity they are in as a way to improve the opportunity cost of providing that liquidity.

Once the agreed closing period is complete, users are free to remove liquidity.

The no-loss token offer gives long-term cryptocurrency holders a chance to earn tokens of the newly launched protocols for payout and choose the token they wish to accumulate as a reward.

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The opinions and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risks, you should do your own research when making a decision.