In this week’s newsletter I aim to show Ethereum users, or even just people who are new to crypto, how they can invest their stable assets and generate a yield without having to do all of the hard work that is normally required themselves. In previous newsletters I have explored this topic and attempted to dive deeper into the world of asset management, and more precisely how new users can gain exposure to DeFi in the safest possible manner. I mainly covered how this can be done using the Set Protocol or the Index Coop however just recently I was luckily enough to be introduced to a very new protocol that has provided me with a very handy new and innovative financial tool. This new feature has become very appealing to me the more I learn about it, and this is because I haven’t actually seen this particular feature being used before. There may of course be another project that offers a similar feature, I just haven’t stumbled across it yet.
Anyway, it’s honestly crazy learning about the world of DeFi, as well as exploring the endless opportunities that this industry continues to present to its users. Anything is possible, and every week there is a new protocol with a new idea that aims to provide investors with a new opportunity that they can explore, essentially giving them a new and more efficient way to put their assets to good use because nobody wants to just have their crypto sitting there do they? No, in most cases people who are familiar with the industry want to put their assets to work and increase their stack over a period of time. Afterall, that’s why a lot of us are here in the first place. We are all pioneers here, and we all want to share the rewards and maybe even have the opportunity to go down in history for being a part of what will become one of the greatest and most innovative industries of our time. This is the golden age of Ethereum people. It has never been an easier time to get involved and educate yourself about the industry. There are now so many resources for new users to access for free, and we will see many more emerge over time.
LongLong Finance – How Does it Work?
Basically, in a nutshell LongLong finance gives its users a way to generate a second yield. And what I mean by that is that the protocol generates a yield by placing your initial investment into a vault. This means that the protocol will place your investment into the most efficient yield earning opportunities at that given time. To put it simply, it actually operates similarly to most other liquidity pools that you would already be familiar with however, what happens after that is what makes this new model so magical. In short, the protocol baskets all of the yield generated together that has been generated from a variety of users initial investments and pools them all together and adds them into a second ‘vault’. Once all of the yield is invested into a new ‘vault’ we basically end up with a whole new pool that is again in fact generating a yield. And that’s basically how the process works. It can be a little complicated to understand, but once mastered it actually becomes a financial blessing.
Investing with Stable Assets
What I would also like to mention here, is the fact that you can also invest your stable assets into some of the vaults that are currently on offer. This means that you will be able to feel a lot safer and a lot more comfortable knowing that you’re not simply speculating on volatile assets that are generally a higher risk. The yield generated might be lower due to the stable asset not increasing in value over time, however this is a much safer way of investing, as you can always be sure that at the very least you profit a little, rather than losing money if the value of a volatile asset or token decreases. I want to also note that this protocol is easily accessible while using the Polygon network, so you are easily able to access the juicy yield within this protocol without having to overspend on transaction fees.
This new second yield model is quite brilliant, because what it does is provide an alternative way for users as well as major institutions to gain exposure to DeFi. Why is this so good for institutions you ask? Well, it’s actually very simple. You see most institutions just want to invest in a new up and coming industry, or in this particular case an emerging technology with immense potential for future growth. But a lot of these institutions are already heavily involved with other ventures, which means that in most cases, the people that are running these institutions don’t actually have that much spare time to research and then manage a crypto portfolio. So LongLong finance aims to break down that barrier by offering a service that both exposes the user to DeFi as well as generating a profit on your future investment.
This of course is not completely risk free, as a protocol like this requires a lot of trust, and why wouldn’t it? I mean you’re handing over some of your assets and allowing the protocol to invest your assets into other various protocols. But on the plus side, you are also allowing a team of industry experts to manage your funds, as well as do right by you in the process. And as I always like to say, and this relates particularly to new crypto investors, “an educated investment is much safer than a speculative guess”. I truly believe this, and I truly believe that a lot of new users have been burnt due to gambling on pure speculation. So why not have a team of experts generate your yield for you? This gives the new user time to research as much as they can and educate themselves on how the industry works.
There so many of these asset management resources out there now, and if you’re new, I highly recommend trying one out. This way you can work your way up until you’re comfortable enough to manage your own investments. Or on the other hand you could be occupied elsewhere entirely and just want a money robot or an investment team to handle everything for you. Either way, you are gaining exposure to an industry that will one day take over the world.
Thanks for reading everyone!
This newsletter is for educational purposes only and should never be considered as financial or investment advice