Learn How to Save Cryptocurrencies in 2022
If you’re like most people, saving isn’t your strong point. It can be boring and create stress when you are trying to slowly build up your fortune over years and years. The savings process may never be fun but the introduction of cryptocurrencies has added at least a little more excitement and options to the market. Here are the best ways to save your crypto.
Set a Goal
One of the main reasons many crypto traders never achieve their trading strategy is because they don’t have one. It is a very common saying, “If you don’t have a plan to get rich, you’re planning to be poor”. The same goes for cryptocurrencies, if you don’t have a hard set in stone savings strategy, the chances are high you will spend it or trade it.
One of the first steps is to create separate wallets for tokens used when trading versus tokens you intend to HODL (hold on for dear life). Splitting up your funds will make it easier for you to keep track of your savings and your trading results accurately. Additionally, splitting up your fund enables you to utilize certain portions for wealth generation strategies.
Security should be your first priority when discussing saving crypto. It does you no good to save up only to have your holdings hacked away or accidentally sent to the wrong address. To avoid these concerns, you need to create a storage and security protocol. This is a process that you follow exactly every time you send transactions or conduct trades.
Part of your strategy will include how you intend to store your crypto. There are a variety of options available to users today. The most popular and easiest is on a mobile app. Platforms like Jaxx offer users an excellent selection of projects they can hold and other services such as news updates.
Corporations and blockchain service providers should always use a multi-sig wallet. The term multi-sig refers to the need to provide two or more signatures to approve a transaction. The use of multi-sig wallets could have prevented some of the largest crypto hacks of all time. As such, these wallets are standard on most exchanges today.
If you are seeking to hold lots of crypto, a hardware wallet is a great option. These devices protect your crypto from all online threats by separating your coins from the internet. When crypto is held in this style of wallet it’s called “cold storage.” Hardware wallets also employ other tactics to keep your crypto safe such as the need to press a button to approve transactions. Even the best hackers in the world are unable to manually press a button on a device.
Put Your Savings to Work
Once you know how to hold your crypto, you’re ready to put your savings to work. Today there are crypto projects that enable anyone to secure passive rewards and thereby grow their wealth. The META 1 project provides users with multiple ways to drive their savings balance upwards.
META 1 offers low-risk staking services to users. You can stake your tokens by locking up a predetermined amount into a staking pool. The more tokens you participate with and the more rewards you earn. Farming pools are like staking systems but they don’t have lock-up periods or pre-set APYs. Instead, farmers must monitor the gas prices and APY of pools to ensure they are achieving the best returns.
Another feature that is growing in popularity is crypto bank accounts. These systems function like their centralized counterparts in terms of features. However, they eliminate the bank, and instead, the users split the profits. For example, the META BANK offers users 10% APY on savings accounts. The national average for fiat accounts sits at just 0.03%.
Peer-to-peer lending services are growing in their popularity. These networks enable users to lend out their crypto and in return, they receive repayment plus interest. These systems are hugely popular because they provide lenders with the ability to get repaid on time regardless of the borrower’s actions.
These systems leverage large lending pools. Funds go into this pool and generate rewards. Additionally, the pool’s token gains in value as the liquidity pool’s balance rises. Borrowers also gain more flexibility. Some networks enable users to select items such as their repayment date. The main requirement is that the borrower meets the collateralization requirements.
Another thing to consider when saving crypto is that every time you move your funds it costs you a fee. Depending on the platform or wallet, this fee can be +10%. Worst of all, many networks base their fees on the size of the transaction. This approach means that you will pay more in fees as your savings grow.
To avoid high fees, there are a few things you can do. For one, you need to get your savings to their wallet destination in as few transactions as possible. Most hardware wallets will support direct trading which can help. Also, conducting direct peer-to-peer trades using a DEX saves you on the fees charged by large centralized platforms.
You will want to utilize any additional protocols that help lower fees. For example, the Lightning Network is an off-chain solution that provides Bitcoiners with lower fees and faster transactions. Immutable X is another second-layer protocol that services the Ethereum network. These networks were built to improve the scalability and functionality of these systems.
Saving Has Never Been so Exciting
The DeFi sector has taken what it means to save and flipped it on its head. What used to be you holding on to coins waiting for time to pass, has now become HODLers securing passive rewards while retaining ownership of their assets. This strategy creates an ever-growing wealth creation system.