The Big Lure Of Crypto Airdrops And The Headliners of 2021

Airdrops are novel to cryptocurrencies and they have become a fortune boost for savvy investors. Here is how they lead into 2021.

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The world of airdrops, leading projects, and what to expect in 2021

Airdrops have long been a controversial subject in the cryptocurrency market. While they’re often touted as a great way to get users for a blockchain, detractors argue they weaken the value of the very crypto being airdropped, thus defeating the very reason to run them. Others see them as cheap ploys to attract users, and in anyway, it is a world of the good, the bad, and the ugly!

However unpopular, airdrops are still a thing in the market – and they’re considered a very useful tool, if properly handled. That’s why, even when some people really dislike them or even consider them “dead,” they still are happening. They just have changed. They’re no longer free-for-all extravaganzas, instead becoming focused events.

What this means is that Airdrops haven’t disappeared, and they aren’t expected to. These days, you just have to look a bit deeper than otherwise to find them.

But first… What is an airdrop?

An airdrop is the name given in the cryptocurrency scene to wide, usually free, distribution of tokens on a blockchain. The most recent celebrated airdrop was for Flare Network, and it helped give XRP a leap since it was predicated on exosting XRP in circulation. Bitcoin Cash AB was also recent and it is holding its place as a crypto of note.

That failure notwithstanding, crypto projects kept offering them, even if in less wide modes. The most common mode of airdrops, known as ICOs (for Initial Coin Offering) were extremely common as ways for projects to obtain early funding, although their popularity has greatly waned over the last two years.

Still, free airdrops have been shown to work in several occasions – and as long as they’re well designed, there’s no reason they shouldn’t work in the future.

Which airdrops have seen success?

Perhaps the largest airdrop to see success comes from Stellar. The then-new blockchain gave away 20% of its token supply to people who owned BTC. The airdrop was deemed a success, enough so that Stellar has in several occasions reactivated the airdrop, letting people sign up for free Lumens tokens.

Decred is another blockchain that hosted a massive airdrop with success, with 285,000 tokens distributed in 2017. While the token saw a price crash in 2018, its value is still close to the pre-airdrop value.

Must-Read 3 High Performing Cryptocurrencies To Look Out For in 2020 Q4

What do I need to do to get into an airdrop?

It really depends on which airdrops you’re looking to get into. Registering for the airdrop is, of course, a mandatory step for all of them, but some also have other requirements. In some cases, as happened with the XRP airdrop, you need to own another cryptocurrency. Other airdrops require you to sign up for email advertising or even advertise the token yourself via social media.

The latter is more common than you might expect, and makes sense: Airdrops these days are largely used as advertising, and thus the social/viral element of them is expected. In many cases, these airdrops don’t assure you’ll receive tokens, instead giving you what could amount to entries for a raffle. With the recent market leap in prices, it is perhaps worth the effort.

Which airdrops are yet upcoming?

There are dozens, if not hundreds, of upcoming airdrops, as they’re still used in many crypto projects to attract attention. Several websites were set up specifically with the goal of keeping a list of upcoming token airdrops and their requirements, and they have since become the best tool for airdrop hunters.

As you can likely notice, most free airdrops these days are for low-value tokens, which makes sense considering it’s essentially free money. More serious airdrops have larger requirements, one of them being holding a minimum amount of another cryptocurrency to be eligible. These airdrops, known as Holder Airdrops, are the most commonly successful ones.

Watch Out For Symbol

Perhaps the largest upcoming airdrop as of this writing comes from the Symbol blockchain. An already successful blockchain, known as NEM, is staging a migration towards a newer system that’s considered superior to the current one.

To entice users to migrate, all users holding 100 or more NEM tokens will by early January receive an equal number of tokens in the new blockchain, deemed XEM tokens. Some exchanges are supporting the airdrop alongside some wallet serbvice providers. Coming from an already-established blockchain, this airdrop is expected to be a success and is for now the largest foreseen airdrop for 2021.

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How Staking Works With Ethereum 2.0

Ethereum 2.0 was long awaited and now it has arrived with a promise. Here is how staking works on the new platform.

After a long time and repeated delays, Ethereum has finally moved away from its proof-of-work model to validate transactions into the cutting-edge, less resource intensive proof-of-stake model that most new blockchain projects over the last couple years have adopted.

Along with this change has, as one would expect, come many questions from Ethereum’s own users, particularly those who mined Ethereum either as a hobby or to make ends meet, about how the system works, or why it is any better. In some cases, when people only mined and invested in Ethereum and no other tokens, they genuinely don’t know anything about the proof-of-stake mechanism that has become commonplace.

So what’s this proof-of-stake?

Proof-of-stake is the now preferred method of assigning transaction blocks for validating transactions in blockchain environments.

The older system, called proof-of-work (and more commonly known as “mining,”) tasked participants (that is, miners) with solving an extremely complex mathematical problem via brute force. Whoever solved the problem first was assigned the block for validation along with the reward, which was the cryptocurrency that was “mined.”

This system is extremely wasteful, because said mathematical problems have no actual use other than help the system decide who gets what. In the end, they proof-of-work model leads to huge losses in energy and processing power. To deal with this, the proof-of-stake method was created.

In a proof-of-stake environment, you don’t need to dedicate your computer’s processing power to solving repetitive problems. Instead, in order to establish your credibility with the network and ensure you’ll authenticate transactions properly, you put some of your cryptocurrency at stake, hence the term “staking”.

If your authentication is considered correct (that is, if you’re not trying to meddle with the blockchain,) at the end of the process you’re given back the crypto you staked plus extra crypto rewards. If it isn’t, the system takes the crypto you staked, or a part of it, as a fine of sorts.

What do I need to stake?

Staking is a much easier process than mining, because all you need is to have some cryptocurrency at hand. For the ETH network, said currency is naturally ETH tokens. If you want to operate your own node, which will net you full rewards from staking, you’ll have to stake a minimum of 32 ETH. That’s about $20,000, which is pretty much pocket change and an amount so small people have asked Ethereum to raise it, lest the have-nots start staking too.

Alright, joke’s over. It’s a huge amount. More money than most people have ever held in their lives, or will ever hold. Luckily, you only need such a monstrous amount of Ethereum if you want to run a full node yourself. For people who don’t have massive amounts of money invested in crypto, staking pools exist.

Staking pools work in the same way mining pools did: They allow many people to chip in with whatever they can, in this case to reach the minimum 32ETH or surpass it so the node can be run. The rewards for staking are then divided among all people staking, proportional to how much they staked and for how long.

How do I set up a stake? Can I just jump in and out?

While some systems using proof-of-stake allow individuals to jump in and out, it’s a bit more complicated with the Ethereum network. Every time you choose to run a staking node or join a staking pool, you should think of it as a timed deposit – meaning you shouldn’t expect to be able to take back your staked Ethereum before the time is up.

Certain staking pools can allow you to retrieve your ETH, although usually this will imply forfeiting any earnings, and some will not allow you to retrieve it at all until your agreed upon time is over. As such, you shouldn’t stake any crypto you might soon need. The feelers from Binance-supporetd pools is that you must leave your stake untouched for at least one year.

What are the risks in staking?

From a general point of view, staking is risk free as long as you’re not trying to cheat the system. You deposit your crypto, wait a set time, take earnings based on how many blocks you were assigned. The higher your staked amount is, the more likely you’ll be to be assigned blocks. It’s simple and relatively direct.

However, we did mention that staking should be treated as a timed deposit – meaning in many cases you won’t be able to withdraw your staked crypto at a moment’s notice. In a stable or bullish market that’s not a problem, since you won’t need to cash out unexpectedly. But in a bear market, or an outright market crash, staking can mean you won’t be able to react to market movements, and thus will have to soldier through it all.

Now, Ethereum is usually stable, so it’s not a particularly risky move since even when prices crash it recovers relatively quickly. However, the risk still exists – so it’s not an entirely risk-free process.

Is staking good?

The proof-of-stake consensus algorithm has existed for years, and it is generally considered superior to proof-of-work algorithms. On that degree, considering anyone can stake and the carbon footprint of staking is minimal when compared to that of mining, staking is the best model we currently have to assign blocks for authentication.

However, since it has inherent risks not existing in mining, some people stay away from it. This in the end creates a system that’s much greener, much more open than the older one, but that some people who are extremely protective of their investments might wish to stay away from.

Conclusion

The traditional finance options in deposits and financial papers allows for long periods in tenor before rewards are accessed. Same works here for staking except that this platform is a decentralized one. With traditional finance undergoing rejuvenation, staking and its ilks seem to lead the way to a newer frontier.

Must-Read: The Attraction of Polkadot Blockchain And Here Is How It Is Making A Difference

How To Trade Leveraged Tokens on Binance Exchange

Binance exchange provides a remarkable experience with leveraged tokens. Here are the vital insights.

Margin trading is a risky business where profit margins are paper-thin. That’s a fact. While hundreds of thousands of people have dabbled into the market, be it via forex or cryptocurrencies, the truth still remains: Making a living out of regular margin trading can be extremely difficult, if not impossible. Moreover, a single mistake can completely destroy your position, sending you back weeks or months.

Due to the extremely thin profit margins, leverage trading is also a common practice: In this model, a user receives an amount of money for trading that’s several times higher (Usually 5x or 10x, though in some cases much larger) than the amount of money they have. They are then allowed to trade with that money, with the caveat that if they lose an amount of money equal to their initial amount (their leverage) they must immediately liquidate their position and pay back the loan.

Leveraged tokens are an attempt to help with this complicated process. Instead of having to ask for leverage and then invest using it, you just buy leveraged tokens. Leveraged tokens have their value semi-pegged to that of another crypto token… except their value changes at 2-3x the rate.

In other words, if you want to try leverage trading, using leveraged tokens make the process much easier by getting rid of the middleman and allowing you to multiply your gains (or losses) automatically.

How do Leveraged Tokens on Binance work?

First of all, not every token that’s traded on Binance works as a leveraged token. Not all tokens have a leveraged equivalent, either. As with other Binance programs, like pegged tokens, leveraged tokens are only offered for a handful of cryptocurrencies – naturally, the ones that see leverage trading more often, and thus where there’s a market.

An important thing to note is that a leveraged token isn’t equivalent to the actual token. A Binance Leveraged Bitcoin, for example, can’t be used to make Bitcoin purchases. They’re essentially a separate token, whose value is pegged to that of Bitcoin.

Knowing that, the process is simple: You can buy or trade leveraged tokens on Binance in almost the same way you can buy or trade the actual tokens, with the only difference being that the leveraged token’s daily change will be steeper. For example, if the price of a Bitcoin goes up by $1,000 during a trading session, the price of a Bitcoin-based BLVT will go up by $2,000-$3,000.

Sounds like easy money… Where’s the catch?

There isn’t much of a catch in the sense that there’s no small print that will make you lose your money. However, one thing you’ll have to know is that leveraged trading tokens are rebalance every day to make sure the relative value to the base token holds.

What does this mean? Well, it’s simple. Say, a BTC leveraged token (we’ll call it BTCL) releases today, with the initial exchange being 1BCT = 1BTCL. At the end of the first day, BTC gains 10% of its value. Since BTCL was set to 3x leverage, that means that at the end of that day 1.3BTC = 1BTCL.

That works for a single day. However, as more days go on, problems start arising: First, because maintaining the same ratio over many trading sessions can get difficult – what started as a 3x leverage can easily balloon into much higher values after successive positive sessions, for example. But more importantly, because the exchange needs to have liquidity so they can perform token payouts.

This directly affects the value of the token, as one would expect. In many cases, this will make earnings somewhat smaller over a longer period than the actual accumulative. It can also make losses smaller over a longer period in the same way. Due to how the market and rebalancing works, it can also create losses even when the original token’s price variation evens out to 0% (that is, if price goes up, then down, over two separate sessions.)

Rebalancing is important to maintain liquidity and keep the reference existing, but you need to look into how your exchange does it to know exactly what to expect. For more information, see the “Volatility decay” section in Binance’s own website.

Alright. What else is there? Why should I trade on Binance and not elsewhere?

Your choice of trading company is entirely yours, and people tend to have vastly different preferences depending on their goals. However, Binance does offer a few things to their leverage traders that might sway your opinion:

Tiny trading fees. Binance leveraged tokens exist in Binance’s own blockchain – and, as usual for Binance operations, its own intra-blockchain trades have much smaller fees than extra-blockchain ones. Obtaining Binance Leveraged Tokens will result in a much lower fee than obtaining the tokens themselves, on top of the extra earnings.

Constant leverage rebalance. While other exchanges only rebalance the token value, Binance also changes the leverage for each trading session depending on how the token has been faring. Generally, this means the leverage will flow between 20 and 30% depending on the current market, but it can also go higher or lower at times.

High Market Liquidity. Binance is one of the crypto exchanges with the highest liquidity in the world – and thus they have enough crypto in storage to weather almost any market swings. This is important when the market is particularly volatile, since smaller exchanges with lower liquidity could run into issues if prices vary widely in an unexpected manner. For Binance, this shouldn’t be a problem.

Conclusion

The market depth of cryptocurrencies is improving and there are more ways to trade and explore digital currencies.

With Binance LVT, you can take more positions and reap rewards. As exciting as the crypto market might be, never forget that it is high risk, and only invest what you can lose and still be able to get a good night rest.

How Celsius Has Outperformed Bitcoin In 2020

The CEO of Celsius recently reported that the digital asset has outperformed Bitcoin so far this year up to tune of 2,000 percent. Here are the facts.

Crypto lending is fast becoming a trend in the crypto space with diverse platforms taking off in 2020. With already over $8 billion in value, the crypto lending market is expected to experience continual and somewhat steady growth.

The idea is to replace greedy intermediaries while also ensuring that users substantially earn passive income per week on their crypto holdings, especially in comparison to interest rates of fiat-based savings scheme. This birthed the slogan “Banking is an essential need of the world, but banks in itself are not needed.”

According to expert, crypto loans and Bitcoin are championing the surge towards the massive adoption of cryptos due to the simplicity of investment. Several crypto start-ups such as Celsius are spearheading novel monetary policies in the digital asset space, with over $8.2 billion in processed loans.

Celsius Network (CEL) – A Quick Overview

Celsius is a democratized cryptocurrency savings platform that operates on the blockchain and offers lending and borrowing services “just like the big banks do with traditional assets,” but in a more structured manner, without holding on to all of the generated profits. The entirety of the Celsius network is based on its CEL token, which can be used to take loans, send money P2P, get interests or even HODL if you like.

The Celsius network supports a wide range of cryptos, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and other altcoins like Dash (DASH), Bitcoin Gold (BTG), EOS and Zcash (ZEC). In February 2020, the company began offering its liquidity providers compounding interest on cryptos deposited in its digital wallet.

Despite the instability and economic uncertainty induced by the COVID-19 pandemic, Alex Masinsky, the network’s CEO, has said that the use case of the digital asset has experienced massive growth and has continued so.

Celsius Performance Spurred by Decentralized Finance Protocols

Since the introduction of the Celsius token – CEL – in 2018, the crypto has experienced substantial soar in price and has leveraged on decentralized finance (DeFi) protocols to expand its userbase, most notably in the past few months in 2020.

The ripple effect of the DeFi integration has now seen CEL shoot more than 9 times its price in January 2020 and has continued on this path with a surge of over 1700% since the crypto market flash crash in March.

Currently, CEL is valued at over $1.35 per unit and hold its place among the top 50 crypto assets ranking 42 with a market cap of over $330 million, which is a 227% increase from what was recorded at the start of September 2020 (just over $100 million).

Bitcoin Performance in 2020 So Far..

The crypto flash crash of 2020Q1 spared no digital asset, not even Bitcoin (BTC). During the start of the year, Bitcoin took off at about $7,200, with a market cap of over $130 billion.

By the end of March, the market value of the world’s top-ranking digital asset had dropped to about $6,400 and a market cap of about $117.8 billion. The 11% drop in price and about 9.4% drop in market cap is attributable to the Coronavirus pandemic.

At the moment, BTC is valued at over $13,500 per unit, with a market cap of over $250 billion, and hold its place as world’s no. 1 crypto asset. Doing the mathematics, this leaves BTC at about 1.9x its price at the start of the year, and a surge of over 110% since the flash crash of March 2020. At the start of September 2020, BTC was valued at over $11,600, when juxtaposed with its current price, that’s about a 16% increase in market price.

What Is Driving the Performance of the Celsius Network?

The impressive growth experienced by the Celsius Network in the past few months of 2020 is attributable to the company’s policies and product offerings. Unlike banks which offer meagre interest rates to its users, Celsius distributes 80% of its rake-ins.

Another important performance driver is the security architecture adopted by the company regarding its wallet. Celsius wallet is provided by PrimeTrust and FireBlocks, both with a crypto-insurance scheme that covers insider theft, external hacking and loss of private keys.

Who wouldn’t large interest rates and a multi-secured crypto lending platform, even in the middle of a pandemic! Thus far, it is reflected in the magic of DeFi

Final Thoughts

Although it is common knowledge that BTC is the world’s most accepted and recognized crypto asset, but it has been outclassed in terms of performance by several other assets such as the Celsius (CEL) Network. Based on the prices and market cap changes observed within the period of comparison, Celsius has clearly outperformed BTC by over 1000% in previous months, which is a remarkable achievement.

How Cryptocurrency Investment Works With Grayscale Trust

Grayscale Trust made the headlines recently when it emerged that the firm was selling its ETH investment higher than the market price of retail ETH. Yes, it was for a good reason. Its trust has a ROI that beats the market. Here are more insights.

How to invest in Grayscale Trust Crypto

The Grayscale Crypto Trust is the world’s largest and fastest-growing crypto and digital asset investment product, with $7.5 billion in managed assets as at the end of September 2020.

Grayscale offers investment exposures and well-researched market insights into developing crypto assets that enthusiasts and individual investors can purchase and sell off on their brokerage account.

The Grayscale Crypto trust portfolio offers several crypto products, with its Bitcoin Trust being the largest selected investment by far, accompanied by its Ethereum Trust. Other products include Litecoin Trust, Bitcoin Cash (BCH) Trust, Stellar Lumens Trust, ZCash Trust, Ethereum Classic Trust, Horizen Trust, XRP Trust, and Digital Large Cap Fund (holds multiple digital assets in one portfolio).

What does Grayscale Trust Crypto offer?

It is a portfolio of cryptos that provides alternate means of investment to specific investors, intending to secure their investments from market uncertainties, while precipitating positive yields regardless of market bias.

To better understand this subject, let’s take a quick look at Grayscale’s Investment Services. These services are categorized into Single-Asset and Diversified Products.

Single-Asset Grayscale Products

Grayscale BTC Trust: This is a flagship product, and it’s symbolized as GBTC. It is exclusively invested in Bitcoin (BTC), and it lets investors gain insight into the price mechanics of BTC while eliminating the challenges associated with directly purchasing, storing and securing BTC.
Grayscale BCH Trust: Offers an alternative and effective approach for E-cash.
Grayscale ETH Trust: Decentralized platform powered by smart contracts.
Grayscale ETH Classic Trust: Flexible Currency for IOTs.
Grayscale Horizen Trust: This product is a private and secure platform for media, messages and money.
Grayscale Litecoin Trust: Crypto for quick low-cost payments.
Grayscale Stellar Lumens Trust: This product connects people, banks and payment systems.
Grayscale XRP Trust: Crypto for efficient worldwide enterprise payments.
Grayscale Zcash Trust: A currency for the new age with enhanced privacy protocols.

Read Also: Leading Reward Tokens That Rule The Crypto Space In 2020

Diversified Products

Grayscale Digital Large Cap Fund: Open-ended and private investment vehicle that offers diversified insight and exposure to the leading digital assets via a cap-weighted market portfolio.

All investment products constitute about 80% of the total digital asset market cap, and they offer a holistic business solution for enthusiasts. Now, why should you invest in Grayscale Investment Vehicles?

Grayscale Investment Products – Why Invest!

Here are some of the benefits of investing in Grayscale’s Investment Products:

Titled Securities: Grayscale Trust Crypto share are titled securities, and are more or less like the common bonds and stock owned by investors. Titled securities are easily transferrable to beneficiaries and are well known by tax and financial advisors.

IRA-Eligible: Grayscale Trust Crypto Shares can be held certain 401ks, IRAs, and other investment and brokerage accounts.

Inherent Security and Storage systems: The underlying assets of each investment product is safeguarded by a robust security protocol that includes cold storage, 2FA, encrypted key shards, usernames and passwords.

Audited Financials: The financial statements of each investment product is audited yearly by Friedman LLP.

Stress-free Investment Model: Individuals and investors seeking to trade cryptos and other digital assets on their own will often have to transact through unregulated or insecure intermediates and unfamiliar exchanges. This puts the digital assets at additional risk as their private keys become susceptible to theft, thereby exposing an investor to total or partial loss.

With Grayscale Trust Crypto, investors do not have to worry about buying, storing or transferring digital assets, instead, Grayscale and each investment product service provider carries the burden without compromising investor’s exposure to the performance of assets.

Must-Read: How Yield Farming Works On Uniswap

Seasoned Manager & Sponsor

Having considered why to subscribe to Grayscale’s investment vehicles, let’s delve into the “How”.

How to invest in Grayscale Trust Crypto

First, Grayscale Trust Crypto investment placements are only accessible by accredited and verified investors. In this case, an accredited investor will earn over $200K per year or $300K with spousal equivalents, possess a Series 7, 65 or 82 professional certification, and have over $1M in net worth as a standalone investor or with spousal equivalent.

Likewise, entities could also be considered as accredited investors if they have over $5M in liquid assets, or if each member of the entities is an accredited investor.

Secondly, you can either invest in-kind or through cash subscriptions. The amount of investment contributions you can make will fall in the following range:

Less the $25K
Between $25K – $100K
Between $100K – $1M
Between $1M – $5M
Between $5M – $15M
$15M upwards

Conclusion

In summary, to subscribe to Grayscale Trust Crypto, you’ll have to complete an e-form that will require you to answer a few questions to verify your eligibility.