There are many ways to earn money but some ways are such that they can make you money easily and the risk is low. Now if we talk about trading then money can be earned from it but you need to know the method of trading.
In trading, you do analysis and guess to take trades. If your guess is correct then you will make a profit otherwise you will face a loss. This means that earning is not guaranteed here.
š Liquidity Pools and #COLONY Token
But in this post, I will tell you about a way where the risk is minimal and you will get passive income in any case. That is providing a liquidity pool. The pool means that you gather your money for any pair so that people can get liquidity for trading.
Liquidity pool means that you provide continuous liquidity to traders for trading and in return you get gas fee charges in the form of APR.
In the Hive ecosystem, there are many tokens that you can pair with your Hive coin and invest in the liquidity pool. But the smart thing is to use tokens that are strong in their price.
There are many good tokens but at this time in my view the best one is the #COLONY token. Why is it good? The main reason is that this coin is being used in many games, users recommend this token, and because of continuous investment, its price will keep rising.
#Arcadecolony, which is a games platform, allows you to play #Splinterlands, #MoonKarts, #Stakehouse Den and other games. Out of these, 2 games that I know support the #Colony token. This means if you want to progress in these games, you must buy this token.
Certainly, this is the era of games and play-to-earn is highly recommended in games. For Hive users, this is a great opportunity to benefit from these games and earn money while playing at home.
So in my view, buying #Colony token is safer. What you need to do is buy half your amount in Hive and the other half in #Colony token. Using the BeeSwap website, find these pairs and invest in the liquidity pool.
š Rewards, APR, and Risks
It is also important to discuss rewards. At this time #SWAP.HIVE:COLONY is giving excellent rewards. Currently, around $934 rewards are available and it provides approximately 25% APR.
Donāt you think this APR is better profit compared to other markets? Banks give only 7-8% APR and staking doesnāt have this much potential. But here you can easily earn passive income at 25% APR.
Many people might ask if our amount is locked when we invest in the pool. No, that is not the case. Your amount is temporarily locked and you get an LP (liquidity provider) token which shows how much of your amount is invested in liquidity. Whenever you want, you can sell the LP token and get your amount back.
Now letās talk about risks. Can a liquidity pool give a loss? Yes, certainly. The liquidity pool itself does not cause a loss but the coins you bought may drop in price. In that case, you may face a wealth loss.
But in my view, the rewards outweigh the loss. How? For example, if the token price temporarily drops, you can hold and recover over time. As for rewards, you are getting 25% APR, which means after one year you will get 25% profit on your total amount. Monthly, it will give you above 2% income.
Do you understand about liquidity pools? Has this post helped you? Share your opinion so the post can be improved further.
I hope you find this post useful and informative. If you do, please remember to reblog it so that it reaches as many people as possible and that they can benefit the most from it. Also, remember to upvote, which will help me financially and grow my account.
IMAGE TAKEN FROM CANVA
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