Cryptocurrency: From Speculation To Income

over 3 years ago

We all want our tokens to moon. For those hodling Bitcoin, we saw that happen over the last month. The same can be said for Ethereum. On Hive, many are enjoying the run up in the LEO token.

There is no doubt that one of the keys to wealth is speculation and being able to turn small amounts of money into larger sums. Certainly, not everything has to be a homerun yet, on occasion, we need those to really help out the old portfolio.

The problem with speculation is that markets can turn. While it has the power to move an asset way up, it also can crush it in an instance.

Thus, playing the speculation game forever is not the best idea. At some point we have to move some of the money out of the high risk category to something more stable. This is an old method used by investors for decades.

Source

Income producing assets are vital in this formula. Not only do they tend to be less volatile but they also can provide a steady stream of income. We all know how multiple streams of income is so important for wealth generation.

Yield is an important component in finance. This captured the attention of the crypto community with the recent insanity in the yield farming realm. However, while this situation might be a bit out of hand, the premise is sound.

On Hive that is an interesting project that was put a consistent dividend. It is the EDS token. There are 20,000 of them available of which, roughly 8,000 were sold. Each EDS is selling on Hive-Engine/LeoDex for 1.01 HIVE.

It is a true income token. One buys it to hold. Each week, on Monday I believe, a dividend is sent out. The target is an annual 12% return although it is likely to keep going higher.

For the past week, I received 1.33 HIVE. This is based upon the 550 EDS tokens that I hold. On an annualized basis, this is 12.57%.

Naturally, this does not compare to the wild returns of Bitcoin. It is not suppose to. Instead, the idea is to be able to take some of the profits from any project and put it in an asset that provides a decent stream of income while removing the downside potential.

In the world of traditional finance, products such as certificates of deposit were suppose to do this. For many years, they served the role well. However, with interest rates near zero, why would anyone put their money in an asset like this?

The hunt for yield is a major struggle in the traditional financial markets. Simply put, equities look like one of the few games in town where one can get a decent return. Low interest rates force money out of savings.

It is rather ironic that most in the traditional investing world would kill for 12.57% annual returns in an income producing vehicle. Yet, in crypto, especially on Hive, it is overlooked.

That aside, this shows the flexibility that we have on the Hive blockchain. Coupled with Hive-Engine, we see the possibility to offer a solid return. This is a vital component to having a well balanced system. Speculation is how one makes money, income producing assets is how one keeps it.

Often we discuss how innovation and ingenuity are a major part of the cryptocurrency world at the moment. We are in the process of establishing a foundation that provides many of the benefits that people find in the traditional system. However, the goal is to take what it offers as a baseline and improve upon it.

EDS is a prime example of how this is coming into being. Hive is overlooked by most in the cryptocurrency world yet that does not mean that there is nothing being offered. In fact, when we search, we can find there are a variety of projects that can meet the needs of the community.

An economy depends upon the flow of money. To achieve this, many use cases are required. This helps to fill the needs of people, which are obviously wide and varied. Many still look at Hive as a blogging platform when it is already evolved into something much greater. The inflation is a change to create more opportunities for both those who are on here and anyone who is going to join in the future.

Source

Want to know how simple this is? EDS is actually based upon a cartoon that is posted throughout the week. Naturally, being on Hive, this allows for the receiving of rewards. This coupled with the HIVE accumulated via the token sales is powered up. At that point, it is used put into the leasing pool to earn a return.

The profits from this system are then distributed each week based upon one's holding of the tokens in relation to the whole.

It is a very simple concept. The EDS token is backed by HIVE that is powered up. This keeps the money in the ecosystem as opposed to flowing outside. Each year, simply by hodling the EDS token, one is getting a return, something that is likely to grow as the amount of Hive Power increases.

Projects like this, as silly as they might sound (a cartoon, seriously?) a laying the foundation for the future. At the same time, they are grounded in sound financial logic.

Having income producing assets is vital for an ecosystem. One of the major parts of the shift towards DeFi is to have a well rounded system. If Hive is to participate, we need to understand the holes in our offering while working to fix them.

EDS is one small step in that direction. Thus, anyone who made some decent profits in a token run up or through trading, perhaps it best to consider picking up a few EDS tokens. This will help to protect those profits while generating more income for you.

It is a wealth building plan that has been used by many throughout the years.

And now we have it available on Hive.

If you found this article informative, please give an upvote and rehive.

gif by @doze