How can crypto holders maximize their profits?

There are many ways that people can get involved in the crypto market, from investing (holding), trading, staking to mining or participating in Airdrops. However, the most popular strategies for making money in the crypto world are holding and trading.

This article, however, will discuss strategies that holders can use to optimise their investments. Traders also can use the article as a reference in case they unwillingly become holders.:)

Please note that following strategies are not for those who want rapid profits; instead, it is for long-term holders who seek to increase the number of coins/tokens till the next bull run.

Strategy 1: Know the ecosystem and its tokens

With a vast majority of crypto ecosystems at the moment, it is a challenge for holders to have a deep understanding of what ecosystems and coins/tokens will bring the best profits. It depends on people's beliefs as the future is unpredictable. However, the table below will briefly mention the most well-known ecosystems till now.

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EcosystemCoins/Tokens
Ethereum
ETH, UNI, SUSHI, CRV, CFG...
Binance Smart Chain
BNB, ADA, GRT, CAKE, BAKE, XVS...
Solana
SOL, LINK, FTT, OXY...
Avalanche
AVAX, PNG...
Polkadot
DOT, REEF, KSM, PHA...
Polygon
MATIC, DAI, AAVE, MANA...
Terra
LUNA, MIR...
Fantom
FTM, SPIRIT, EST,...
Near
NEAR, OCT..

Strategy 2: Choose appropriate profit optimization strategies.

Holders can choose to increase their coins/tokens via different methods such as staking, farming and lending. This article will provide a brief review of these three strategies and provide information regarding platforms that holders can consider using.

Staking

The term “staking” is indeed prevalent in the cryptocurrency market. It is a feature of all blockchains that use the PoS (Proof-of-Stake) consensus protocol. To stake a cryptocurrency, you have to hold coins/tokens. Before, you could only stake crypto from your digital wallets, which must constantly be connected to the network. However, many platforms have offered holders to stake directly from its platform, such as on Binance exchange, making it easier for most users.

Here is information regarding popular staking platforms:

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Staking on:Basic infoPlatform
CEX (Centralized exchange)
• Stake coins/tokens that the exchange supports. • Complexity: Easy to use, staking and earning rewards on exchange • Low-medium APR rate • Please note: Locked period, releasing time after unstaking
• Binance • Coinbase • Houbi • Kraken • OKEX • Gate • KuCoin
DEX (Decentralised exchange)
• Stake the DEX native tokens, depending on the support of each DEX. • Complexity: Average, need to know how to use non-custodial wallet • Medium-high APR rate • Please note: Staking fee
• Sushiswap (SUSHI) • Pancakeswap (CAKE) • Raydium (RAY) • Spiritswap (SPIRIT)  • Uniswap (UNI)
Foundation staking
• Stake coins/tokens via node validators/delegators. • Complexity: Average, need to know how to use non-custodial wallet • Low-medium APR rate • Note: Staking fee, validators’ prestige
• For more information, please visit: https://www.stakingrewards.com/
IEO, IDO
• Staking native token of IEO/IDO platform to be eligible for participating in IEO/IDO crowdfunding • Complexity: Average, need to know how to use non-custodial wallet • Benefits: Eligible to participate in buying new launching tokens • Note: staking fee, releasing time after unstaking
IEO • Binance Launchpad • Houbi Prime • Kucoin Spotlight  • Probit Launchpad IDO • Polkastarter  • DAO Maker • Pancakeswap

Farming

Yield Farming has become increasingly popular as it is a way to gain more crypto using crypto. It can be known as liquidity mining, as crypto holders provide liquidity to the DeFi platform and receive rewards. There are two types of Yield Farming that holders can take into consideration.

The first one is DEX Farming, where holders provide liquidity to DEX and receive rewards from DEX transaction fees. Rewards are usually in the form of a DEX native token.

The second type is Yield Aggregator Farming. Projects that provide this type of Farming will compare farming pools and choose the one that has the most profitable yield. Moreover, users can also receive the project native token.

Below is a comparison between these two types of Farming:

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NameDEX FarmingYield Aggregator Farming
Complexity
Average, need to know how to use non-custodial wallet
Average, need to know how to use non-custodial wallet
Benefits
Relatively high APR rate
Relatively high APR rate
Risks
Farming fee, Rug-pull, impermanent loss
Farming fee, Rug-pull, impermanent loss

Platforms

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EcosystemDEX FarmingYield Aggregator Farming
ETH
Uniswap, Sushiswap, Bancor...
Yearn Finance, Alpha Homora...
BSC
Pancake, DODO, MDEX...
Pancake Bunny, Beefy Finance...
Solana
SerumSwap, Raydium...
SolFarm....
Fantom
SpiritSwap, SpookySwap...
Popsicle Finance, Ester Finance...
Polygon
Quickswap
Beefy Finance, Adamant...
Avalanche
Penguin Finance, YetiSwap...
Beefy Finance, Yield Yak...

Lending

Crypto lending is indeed a potential feature that most DeFi projects desire to include in their products. Holders do not need to sell any of their coins/tokens; instead, they lend them to others (borrowers) at an interest rate. For example, Kucoin offers annual percentage rates (APYs) up to 25% when users start lending out BTC, USDT and more. It sounds promising for holders who would like to earn passive income. However, higher returns always come with higher risks.

Like Farming, Lending also has the following basic information.

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Lending
Complexity
Average, need to know how to use non-custodial wallet
Benefits
Relatively high APR rate
Risks
Farming fee, Rug-pull, impermanent loss

Based on the above ecosystem, holders can use the following platform:

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EcosystemPlatform
Ethereum
Aave, Compound, MakerDAO...
BSC
Venus, Cream, Alpha, EasyFi..
Polygon
Aave, EasyFi
Fantom
Cream Finance

Holders can also refer to the following services for lending their crypto:

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Services
Custodial lending platform
BlockFi, Hodlnaut, YouHolder, Celsius, NEXO, Crypto.com, Ledn...
Crypto Exchanges
Bitrue, Hotbit, Bitfinex, Poloniex, Binance, Coinbase, KuCoin...
DeFi (Non-custodial services)
Nuo, Dharma, Lendf.me, Compound, dYdX, Fulcrum...

Recommendations

The recommendations below are not about what platform or coins/tokens should be chosen to stake, farm and lend. However, it is about things that holders need to consider carefully when they seek to maximize their crypto assets.

First of all, it is vital to check the fees carefully.  Fees can be relatively small if you enter into 1-2 transactions; however, they will quickly add up and exceed the rewards. Therefore, it is essential to calculate whether possible interests/rewards you might earn can cover those transaction fees.

Second, releasing time after unstaking also needs to be examined. Several platforms only allow you to receive your crypto 1-2 weeks after submitting your unstake request. Therefore, if the coins/tokens you hold surge dramatically in price, you might miss the chance to sell them.

The next is Rug pull. It mostly happens in farming with low liquidity tokens. Several projects will deliberately increase the liquidity in the pool, luring inexperienced holders to provide more liquidity. Then they will withdraw tokens/coins, resulting in a sharp decrease in the token prices. At that time, those holders will undergo a considerable loss.

Finally, hackers can attack DeFi Protocols via Smart Contracts loopholes and withdraw crypto/money from the protocol. Thus, holders should conduct thorough research before choosing any DeFi project. It is recommended to select DeFi projects with high TVL (Total Value Locked) and are already audited.

Conclusion

In the crypto market, returns are not always guaranteed. Potential projects can end up being an exit scam. Coins/tokens can be pumped and dumped regularly. Hence, it is wise not to put your eggs in one basket. Holders should consider how to obtain and evaluate related information before making a decision.

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