3 Best Crypto Investments In The 2022 Bear Market
All blockchain TVL dropped from $137bn to $85bn within a week following the UST crash. Many pegged cryptocurrencies, such as stETH-ETH, drift off the peg as panic spreads throughout the system. Despite the volatility, there are still rewarding opportunities for those who are willing to take the risks.
In this article, let’s take a deep dive into 3 of the most attractive and risk-adjusted cryptocurrency investment opportunities that still apply to ETH, BTC, FIL, and stablecoins.
1.LuckyHash
Assets: Filecoin, USDT
Expected return rate: 3.5%-90% APY
Risk level: medium risk
Platform overview:
LuckyHash is a dedicated cryptocurrency value-add service provider. It not only provides cloud mining products, but also fixed/ flexible deposits for USDT, Filecoin and various other tokens. The fixed deposit they provide are of 30 days, 90 days, and 180 days, that’s why its APYs vary from 3.5% to 90%.
LuckyHash is also holding an activity in which you can earn free cryptos, feel free to join if you are interested.
Profit strategy:
Simply pledge tokens on LuckyHash to earn.
Currently, the LuckyHash platform mainly promotes the financial management of two mainstream cryptocurrencies, FIL and USDT. Among time-limited wealth management products launched by LuckyHash, there are different lock-up periods such as 30 days, 90 days, and 180 days. The longer the lock-up time, the higher the return rate.
For example, 180-day FIL savings has an APY of 28.5%, and 180-day USDT savings has an APY of 19.5%. In addition, it also provides new user exclusive products of up to 90% APY.
LuckyHash offers generous returns for fixed deposits. Its USDT fixed deposits are especially suitable for conservative investors, because USDT is pegged to US dollars and will not have price fluctuations in a bear market.
Risk:
Before depositing assets with LuckyHash, you should be aware of several key risks. The first is liquidity risk, as depositors will be subject to different lock-up periods. In addition, LuckyHash was established in 2021, and it is still a relatively young platform compared to top platforms such as Binance, Coinbase, and Bithumb.
2.Convex Finance
Assets: USD
Expected return rate: 8%-11% APR
Risk level: medium risk
Platform overview:
Convex is a profit protocol based on exchange liquidity pool Curve. Many of us know, Curve uses the veToken (Voting Custody Token) model. The holders of the Curve protocol’s native governance token, CRV, can lock their CRV Token in exchange for the illiquid, non-transferable veCRV. When providing liquidity, veCRV holders can earn “boosted” CRV rewards (up to 2.5x), the boost is proportional to the amount of CRV tokens held by the liquidity providers.
Many Curve users need a larger number of CRV Tokens in order to obtain a larger “boosted” CRV reward, and it’s quite pricy. Considering that, Convex is providing “boosted” CRV rewards to any Curve liquidity providers who stake Curve’s LP Tokens (veCRV or not) through Convex, to add to their earnings.
Profit strategy:
There are many farms on Convex where users can stake their Curve LP Tokens in reward of Curve transaction fees, CRV rewards, and CVX rewards. The three most profitable farms currently are d3Pool (consisting of FEI, alUSD, and FRAX stablecoins), alUSD-3CRV pool (consisting of alUSD, DAI, USDC, and USDT stablecoins), and GUSD-3CRV pool (consisting of GUSD, DAI, USDC and USDT stablecoins). The current yields for these three pools are between 8–11%.
Risk:
Although providing stablecoin liquidity on Curve and staking Curve LP tokens on Convex reduce the risk of impermanent loss (as many of these assets are pegged to each other), users should still be aware of a few critical risks. First, one of the prerequisites of joining a liquidity pool is pledging multiple kinds of tokens in the same USD value. If the market loses confidence in one of the tokens in the pool, the assets in the Curve pool may become disproportionate. In which case, liquidity providers might not be able to withdraw their proportion. In addition, users also face the risk of two layers of smart contracts, Convex and Curve.
3. Balancer
Assets: ETH, USD
Expected return rate: 5–11% APR
Risk level: low risk
Protocol overview:
Balancer is a decentralized exchange. It is highly customizable as it supports the creation of multi-asset liquidity pools with different weights (i.e. assets in a liquidity pool can have different weights), unlike other automated market makers such as Uniswap and Curve, who adopt traditional equal-weight liquidity pools.
The Balancer pool has an extra mechanism called “vault”, which enables idle funds in the liquidity pool to be routed to other protocols (such as lending markets), and as a result, increases the revenue for liquidity providers. Similar to Curve, Balancer uses a veToken model. BAL holders can lock their BAL in exchange for veBAL Tokens, allowing them to receive “boosted” rewards when providing liquidity.
Profit strategy:
Like Curve, there are many liquidity pools on Balance where liquidity providers can earn revenue and prevent impermanent losses at the same time. This includes the bb-aUSDT-DAI-USDC pool, which currently yields between 8–18% (depending on the size of the LP “boost”). Investors can earn transaction fees, BAL Token, and interest income from Aave (which comes from saving unused liquidity with Aave money market to further increase the returns of liquidity providers)
Other desirable Balance liquidity pools include USDC-DAI-USDT pool (return rate 5%-11%, depending on the veBAL holdings) and wstETH-ETH pool (return rate 7%-11%). However, it’s worth mentioning that the wstETH-ETH pool is currently disproportionate — holdings consist of 65% wstETH and 35% ETH.
Risk:
The risks of providing liquidity on Balancer are similar to those of providing liquidity on Curve. In addition to smart contract risk, Balancer’s LPs are exposed to the risk of every underlying asset within the liquidity pool becoming unbalanced. Furthermore, they may be exposed to the risk of impermanent losses.
Conclusion:
Even though the current return rates in the crypto industry are limited, there are plenty of opportunities that allow investors to gain higher returns than in the traditional markets. Capitals are fleeing the crypto market in a panic sentiment, but whoever stays will continue to be rewarded.
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