CryptoColumnist content strategist Maria Tankushina on one of the cryptocurrency investment strategies for beginners
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Pharming based on liquidity pools consisting only of stablecoins is the most conservative and low-risk way of investing in the cryptocurrency space, despite market volatility. In my opinion, this is the most suitable investment strategy for beginners.
The essence of the investment idea:
A novice investor invests stablecoins in a project and makes a profit in its token. Almost all pharming strategies involve multiple returns.
Description of the idea:
The yield on such deposits can reach about 10% per annum, but at the same time investments remain pegged to the dollar. For example, on the PancakeSwap decentralized exchange, you can farm CAKE tokens, which have historically shown the stability of their rate, despite the unlimited emission. Perhaps the speed of their emission is balanced by other positive features in tokenomics and the popularity of the project itself. This means that potentially farmed CAKE tokens will not drop to low values. Moreover, they can be invested in staking already at 70% per annum.
- Many sites do not refer to smart contracts and do not explain the sources of the expected staking returns. The lack of such information should alert a novice crypto investor.
- The presence of a smart contract does not guarantee the safety of funds. Often scammers install hidden withdrawal mechanisms on the deposit.
- DeFi sites are often attacked by hackers.
- If liquidity is provided in pools with different tokens, where, in addition to the stablecoin, there is a project token, the value of one asset relative to another can vary greatly, which entails a decrease in the body of the deposit.