Let’s look at Bitcoin for example, Bitcoin (BTC) has been the top performing asset of the decade, far outperforming any other investment option on the market.
In a recent survey it was found that 62% of investors not already exposed to the digital asset market plan to invest within the next year. But it doesn’t end there, beyond Bitcoin (BTC) there is a whole new investment realm of DeFi, offering decentralised exchanges, lending platforms and high yield compounding options.
One way professional investors are making high returns through this new investment model is putting their money to work in a liquidity pool, which is used to power a decentralised exchange.
A decentralised exchange, or DEX’s, use these liquidity pools to enable trades that are completely 100% governed by a mathematical code, with no human oversight necessary. Each time a trade is made, a small fee is attached to that trade, which is then distributed to all the liquidity providers based on their personal share of the liquidity pool. Because as mentioned above, there is no need for human oversight, this means that the rewards paid out are much higher than what we have seen in traditional investments. Upwards of 10% ROI pa is considered normal, with some products even offering over 20