How Blockchain is Disrupting the Future of Wealth Creation, from DEXs to APYs

By Stan Peterson
December 21, 2021 Updated December 22, 2021
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A decade ago, when the world was introduced to bitcoin, no one believed in its disruptive potential and that the nascent crypto industry would mature into a $2 trillion economy. Undoubtedly, the cryptocurrency market has registered incredible growth over the years. According to blockchain data analytics firm, Chainalysis, even the global cryptocurrency adoption has increased by over 2300% since the third quarter of 2019 and by over 881% during the previous year.

Cryptocurrencies were initially thought to be worthless, but gradually, after witnessing their disruptive potential, enthusiasts finally regarded them as an investment class. To be noted, Bitcoin, Ethereum including many other coins, are a red hot investment right now. Although the crypto market offers good investment opportunities, cryptocurrency prices have become subject to massive volatility as more and more people dive into the space. And unlike stocks, crypto tokens do not pay dividends which can provide a steady income during a downturn in stock prices.

The problem of ‘price volatility prompted investors to look for more ways to build a safe passive income, and what could have been better than exploring the potential of blockchain when WEB 3.0 is on the verge of global adoption. 

Generate a decent passive income through these methods 

Being at the forefront of innovation, blockchain is an underlying technology for various thriving frameworks such as decentralized finance (Defi), non-fungible tokens (NFTs), and many more. The technology also serves to develop many Web 3 models such as GameFi, metaverse, tokenization of real-world assets, etc. It is worth noting that some of these new structures have emerged as a good source of passive income for enthusiasts across the world.

Traditionally, cryptocurrency investors made money by trading (benefiting from the price actions) and token mining activities. However, today, there are numerous other investment opportunities through which investors earn a decent passive income. Some of these methods are described below. 

  • Yield farming: Yield farming has emerged as one of the most popular ways to generate an earning. It involves staking or lending crypto assets in order to generate interest and other rewards. Yield farmers calculate their returns in terms of annual percentage yields or APY. Some of the most popular yield farming protocols are AAVE, Compound, Curve Finance, Uniswap, among numerous others. This innovative yet risky application of Decentralized Finance (DeFi) has gained massive popularity in recent times thanks to the triple-digit APYs.
  • Staking: Staking refers to pledging tokens as collateral for blockchain networks to validate transactions. It’s available with cryptocurrencies that utilize the proof of stake (PoS) mechanism. If users wish to earn through staking, they will need to pledge their digital assets in the cryptocurrency protocol. The protocol will then choose validators, who will validate blocks of transactions for the network. Every time a block is added, new cryptocurrency coins are minted and distributed as staking rewards to that block’s validator. Staking is a great way to use crypto to generate passive income, especially because some cryptocurrencies offer high-interest rates for staking. The method is certainly more efficient than mining, however, it involves low to moderate risk.
  • Liquidity mining: This is the core of all DeFi projects. Unlike crypto lending or borrowing, participants provide their crypto-assets (trade pairs such as ETH/USDT) to the DeFi protocol’s liquidity pool for crypto trading, in exchange for which they receive Liquidity Provider Tokens (LP) from the respective protocol. In addition to this, Defi protocols may also reward participants with their native tokens (or governance tokens, GOV) “mined” at each block. It is worth noting that the reward percentage is usually based on the total pool liquidity and the amount placed at stake.
  • Interest-bearing digital asset accounts: Holders can take advantage of Alike putting money in a traditional interest-earning bank account; users can put their digital assets into interest-bearing crypto accounts. However, the only drawback is this service only supports crypto deposits at present. To be noted, depositors can receive daily, weekly, monthly or yearly interests, depending on the predefined terms.

In addition to the mentioned ways, users can also generate passive income by participating in token lending, airdrops, cloud mining, and numerous other emerging activities. 

Thanks to the hype and crazy returns on altcoin investment during the bull run in 2017 and the eruption of DeFi in 2020, more and more users have dived into the space in recent years. This led to the development of innovative exchange platforms (particularly DEX) that marketed themselves as a unified solution to everyone’s crypto needs. Interestingly, decentralized exchanges are only the ones to revolutionize wealth creation methods. They have enabled users to expand their crypto portfolio through the aforementioned ways.

Ethereum was the first player in this realm; however, users face numerous issues while conducting activities on its blockchain. In a recent tweet, some crypto enthusiasts reported that nothing has changed in the last four years. Here is a detailed view of Ethereum’s problems:

Problems with Ethereum based protocols

Per the statistics aggregator website, State of the Dapps, Ethereum houses about 2894 decentralized applications (Dapps) at the moment. Certainly, the millennial network had its era, but it has started to lose steam because of these major shortcomings.

  • Non-scalable: One of the core problems with the Ethereum network has been scalability. 
  • Extremely high gas fees: As Ethereum houses numerous decentralized apps, transactions have increased exponentially, and so have the gas fees.
  • Slow transactions: Ethereum can only process 15-45 transactions per second which is relatively slower than other networks. 

The Ethereum scalability issue was witnessed in TIME Magazine’s recent NFT sale. As per TIME’s pricing, 10 NFTs should cost an individual 1 ETH, around $2500 to $2800 under normal circumstances in September 2021. However, one of the buyers paid $70,000 for TIME’s 10 NFTs, which is almost 30 fold higher than the expected amount. Why? Because Ether has a scaling problem. 

However, the Ethereum network promises to mitigate these issues with ETH 2.0, but users will have to wait until the upgrade comes under effect from next year. “Gas fees are insane,” said one user on the ethereum Reddit page. Another said: “If the ethereum network can’t fix its gas fees, average consumers will stop using it.” While these drawbacks reflect the imminent downfall of Ethereum, they are also infuriating people and compelling them to look for other projects like Cardano.

Will AdaSwap help Cardano win against the Ethereum-Cardano rivalry?

Trading as the third-largest crypto project, with a market cap of nearly $42 billion, the Cardano network is believed to outperform Ethereum in the near future. However, Cardano is yet to deal with one of its major setbacks. Currently, Cardano does not have a decentralized exchange (DEX), which means tokens built on the Cardano network don’t have a native exchange list or launchpad and rely on other centralized exchanges like Binance for trade. However, with the introduction of AdaSwap, this will no longer be the case as AdaSwap will be the native exchange that Cardano needs to provide liquidity to projects that create native assets and a thriving ecosystem.

What is AdaSwap?

In the shadow of the emerging Web3.0, when many blockchain projects are jumping into the crypto arena, AdaSwap has brought another idea to grow and develop the Cardano ecosystem. Simply put, AdaSwap is a decentralized exchange (DEX) built on the Cardano blockchain that helps the Cardano network to become a unified solution and evolve into an inclusive DeFi protocol. According to the developers of AdaSwap, ‘AdaSwap aims to be the backbone of Cardano and build a worldwide community around the network to make $ADA accepted as an international medium of exchange.’

AdaSwap will achieve this by allowing users to create digital artifacts, stake tokens, launch projects, and earn interest within the Cardano ecosystem through facilitating the following services.

  • Decentralized Exchange (DEX): While this novel DEX model aims to revamp the way users retain their funds, it also helps them generate a decent passive income through – AMM (Automated Market Makers) DEX, token swapping, staking pools, yield farming, and FFM (Free Financial Model). AdaSwap platform eliminates all the transaction fees associated with its native token $ASW. Let’s suppose a user enters into a staking pool; there will be zero participation fee. Besides this, Cardano users can now start earning high yields on their ADA tokens through staking pools and have the possibility to swap with other tokens on the network. 
  • NFT Marketplace: AdaSwap will be one of the first NFT marketplaces to offer exclusive and high-end NFTs for well-known brands. The team plans to launch the NFT marketplace in two phases. First, the launch of AdaSwap’s own Graffiti NFT chain, which will be traded on the AdaSwap app. Second, the launch of the AdaSwap opens the NFT marketplace for the launch and trading of NFTs on the Cardano network. With the help of their NFT marketplace, developers aim to bridge the gap between Cardano and other networks like Ethereum, Tron, etc., by enabling seamless cross-chain communications.  
  • Stake & Forget (S&F): This will create wealth for AdaSwap users. S&F will be fixed, long-term liquidity pools that users will be able to use for staking. The rewards will be the regular ROI (APR/APY) but will also grant bonus tokens by atomically airdropping tokens that are held on the AdaSwap platform for liquidity pools to create diverse and rich user portfolios.
  • Launchpad: In addition to high-yield staking pools, the platform has a devoted launchpad for new projects that need to launch their tokens on the Cardano network. Worth noting is that while AdaSwap is giving out the best tools to enthusiasts to encourage speedy growth, the network is also offering good investment opportunities and early-bird access to new innovative projects.

AdaSwap assures holders to provide large returns on investments through its native token, $ASW 

AdaSwap token ($ASW) is the native utility token of the AdaSwap platform that powers all the functions in the Cardano ecosystem. $ASW tokens are a Cardano asset and can easily be swapped with other tokens that are based on Cardano’s network. As per the network’s whitepaper, $ASW is designed to provide large returns for holders while reducing other costs thanks to the utility of the Free Finance Model (FFM). The $ASW holders will be subject to no participation, transaction, or any other kind of fees. Besides this, the holders will also be rewarded with airdrops.

While Cardano is the third-largest token by market cap, the network had its own drawbacks. However, with the introduction of AdaSwap, the network now has its own DEX and launchpad. AdaSwap has also developed significant popularity surrounding itself. Analysts believe that the DEX may prove to be a game-changer for Cardano and that it may help Cardano to win against Ethereum. 

Conclusion 

Coming up with a strategy to maximize returns on traditional trading activities while maintaining security, convenience, and privacy has been one central motive for DEXs. While many DEXs promise all this, the networks they are built on are often not scalable. However, AdaSwap has completely revamped the space for Cardano as well as the entire crypto community by charging extremely low or no transaction fees and enabling cross-chain communication. Besides this, AdaSwap is also about to close its seed funding round at nearly $ 1.5 million with participation from many leading industry investors, including COTI, iAngels, Cardstarter, Israeli Blockchain Association, Banter Capital, among others. Undoubtedly, AdaSwap, with a great set of tools, decent passive income opportunity, and solid funding, is well placed to thrive in the crypto space. 

Being an active participant in the Blockchain world, I always look forward to engage with opportunities where I could share my love towards digital transformation.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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