Liquidity mining is a crucial yet enigmatic element in decentralized finance (DeF). Liquidity miners don’t get nearly as much attention as app developers or venture capitalists, yet DeF protocols wouldn’t work without them. DeF protocols are merely lines of code rather than using apps without liquidity — or enough tokens to facilitate seamless transactions.

Liquidity miners are decentralized finance partakers that invest in DeF protocols to provide liquidity. They will be able to collect the bulk of decentralized finance protocol income as well as a significant portion of the protocol’s governance tokens at a cost that is likely to be lower than venture capital.

What is Liquidity Mining?

The term “mining” refers to a process in which bitcoin transactions are confirmed, and new cryptocurrency units are generated. Mining efficiently necessitates both powerful hardware and software.

When it comes to verification, a single computer is still not strong enough to mine cryptocurrency successfully since your power cost would skyrocket. To combat this, miners frequently join pools to combine their computer resources and distribute miner rewards to pool members. Using specialized technology and inexpensive power, groups of miners compete to verify pending transactions and collect the benefits. This rivalry helps to maintain transactional integrity.

AntPool, F2Pool, and BitFury are the most significant pools, with AntPool alone accounting for 19% of total cryptocurrency mining. China is home to most of these liquidity mining pools accounting for more than 70% of total Bitcoin mining. The majority of bitcoin mining equipment is made in China, which takes advantage of the country’s low power rates.

The History of Liquidity Mining

Liquidity mining has been around since 2017, even if it just got popular in June 2020. In October 2017, IDEX, one of the significant decentralized exchanges, pioneered the concept. Sythetix then redefined it in 2019 before being improved further by Compound in June 2020 to become what we know today.

In October 2017, IDEX unveiled a market maker reward scheme, which established the foundation for what we now know as liquidity mining. Instead of putting their money in a pool, the exchange gave market makers its token, IDEX, in return for trading on its platform. There was no need to keep assets in a different location. All market makers had to do was fill a limit order and be rewarded with IDEX.

Following Compound’s announcement of the concept in 2020, the notion’s acceptance rate has exploded in recent years. For example, the total value locked (TVL) between June and October 2020 was more than $10 billion. The TVL (at the time of writing) was $96.96 billion, according to Defipulse.

Can You Incur a Loss with Liquidity Mining?

Mining, investing, and trading all have risks that make being profitable in the market. On the other hand, liquidity mining has its own set of limitations that hinder users from supplying liquidity without needing to monitor the bitcoin market: temporary loss (IL).

The opportunity cost of hanging onto an asset for speculative purposes versus giving it liquidity to generate fees is known as impermanent loss. It’s nearly impossible to prevent IL with digital assets since they’re unpredictable. The user is in danger of not earning or even losing money if an asset inside the LP of choice loses or acquires too much value after being placed. For example, Ethereum’s value can quadruple in 5 days, but the fees paid while farming it will not even come close to covering half of what one would have profited by HODLing.

The term “impermanent loss” is well-deserved. Only when the user decides to withdraw his liquidity does he incur losses. As a result, if the market recovers to its previous price, it is feasible to prevent IL. LPs will be obliged to withdraw liquidity and realize their IL if this does not materialize.

Other risks associated with liquidity mining include technical risks, Rugpull fraud, information asymmetry, and high gas fees.

Conclusion

Liquidity mining is a form of passive income that allows crypto holders to earn from their current assets rather than storing them in cold storage. Assets are lent to a decentralized exchange in exchange for a proportional distribution of trading fees to each liquidity provider. Thus, we can conclude that we can introduce new horizons of innovation in decentralized financing through liquidity mining.

 With oschain.io, we can help you make the most out of liquidity mining and provide you with all the necessary assistance you need in this regard.

Since the start of 2021, the cryptocurrency market has seen an increment in its value, totalling a staggering $2 trillion. The past year has been very positive in terms of the growth and opportunities introduced in the crypto market. With increased interest from Wall Street, and the U.S. exchange trade fund linking its trades to bitcoin, cryptocurrency has ventured into new areas.

However, we cannot deny the rollercoaster the entire journey was; with some steep falls to immense booms, the cryptocurrency market saw it all in 2021. Experts and analysts have studied past trends, the rising inflation, and other vital factors to determine the success of cryptocurrency in 2022.

Despite the unstable and fluctuating nature of the crypto market, experts have predicted the success of specific cryptocurrencies. Investing in these has a high probability of achieving the desired results and bestowing you with the gains you were yearning for!

Satisfy your crypto-curious self by investing in cryptocurrencies that have favourable predictions.

Ethereum (ETH)

Ethereum, also known as ether, has outperformed multiple cryptocurrencies in 2021, including the famous bitcoin. Most trend experts seem to unanimously believe that this positive trend in Ethereum will extend to 2022.

Ethereum’s potential of being used for multiple purposes is a significant contributor to its success. Alongside this, ETH is the native version of the Ethereum blockchain, which had already established itself as the primary hub for intelligent contracts.

The induction of blockchain in decentralized financing has also increased the chances of increasing ether’s prices and the London upgrade, which is set to be complete in 2022 and will prove to be a crucial stage towards further success for the crypto market. Many crypto investors anticipate the arrival of Ethereum 2.0, and the past success of Ethereum has set a profitable path for Ethereum 2.0.

Layer 1 Diversity

2021 by far, has been the most successful year for cryptocurrency, with the use of blockchain technology being introduced in many real-time applications. The increased feasibility and practicality of cryptocurrency is making it increasingly popular amongst investors, and the year 2022 is guaranteed to see some significant diversifications in the NFT sector. In the past, the NFT sector saw the success of Tezos and Solana; however, in 2022, analysts are predicting that these favourable trends will also extend to other cryptocurrencies.

Continued Token Decoupling

With Token Decoupling, you can see the returns on your cryptocurrency based on its individual value proposition. Token decoupling is a highly preferred feature amongst investors as it allows them to stop tracking the coin’s prices at their preferred instant and get access to higher returns. Experts have noticed a rise in the number of investors that are now opting for token decoupling and have predicted that its use will see a further enhancement and increment in 2022.

Stocks don’t rise quickly.

Keeping the multiple investing options in mind, most people still prefer to invest in stocks traded on the stock market. However, these stocks can sometimes take forever to see immense increases, whereas cryptocurrencies, on the other hand, tend to have more significant and more frequent fluctuations. This makes them an ideal option for people looking for a quick road to success in 2022.

Restrictions by the Fed

With the start of 2022, the Feds are planning to amp up the interest rates, in addition to shrinking their bond-buying program. In response to the rising inflation, people will want to look for alternate and more profitable investment options. With cryptocurrency, investors can make investments free of the effects of inflation, and due to their digital nature, they are not subjected to stricter Fed regulations. Thus more and more people are expected to shift towards cryptocurrencies. The rising demand is expected to be met by a rising price, which will further pave the path to success for cryptocurrencies.

Conclusion

While the idea of investing in cryptocurrency can seem very intriguing, it involves a lot of risks, patience, and a thorough knowledge of the crypto market. Your profit can either rise tenfold, or you can see the crypto market crashing, sinking all your money in a monumental loss. However, if fate plays its cards in your favour and the socioeconomic and political factors work, 2022 could be your year of success and high profits through cryptocurrency.

With topiacoin.io, we can guide you with what cryptocurrencies to invest in, how to proceed with the investment process and other details that are deemed necessary by potential investors!

Crypto staking—also known as staking coins—is a realistic option for those interested in obtaining assets for their crypto wallets. It’s a method for confirming cryptocurrency transactions. It also lets members -0p9to generate passive income from their holdings and commit shares to maintain and confirm transactions on a blockchain platform.

Like many other aspects of crypto, staking in crypto can be risky. I guess it depends on how much knowledge and understanding you choose to acquire. The primary learning for many traders and investors is that staking is collecting incentives for holding particular cryptocurrencies. Even if you’re seeking to collect some staking rewards, it’s helpful to know how and why things work the way they do. 

So below are the five things that you most likely didn’t know about crypto staking. 

Proof of Stake

Proof of Stake, a modern consensus technique, has arisen intending to enhance effectiveness and quality while lowering fees. It’s the system that allows you to arrange transactions into blocks. The blockchain is then created by connecting these blocks. Although each Proof of Stake blockchain technology has its staking currency, other networks use a two-token structure, with incentives paid in a different token.

The blockchain provides incentives during the crypto staking because it puts it to work. Staking-enabled cryptocurrencies use a “consensus technique” known as Proof of Stake to assure that all transfers are validated and protected without the involvement of a bank or transaction processor. When you choose to stake your crypto, it becomes a part of the process.

Proof of Stake lowers costs by removing the need for all the other miners to go through arithmetic problems, which is a time-consuming and energy-intensive operation. However, transactions are verified by those who have staked their money in the blockchain. 

Lockup Period 

Staking entails, a “lockup” or “vesting” period when your cryptocurrency is unavailable for trading for a specified period. It can be a disadvantage because you won’t be able to swap staked tokens even if prices change during this time. It’s essential to understand the specific staking requirements and guidelines for any project you’re interested in before you start staking. 

Slashing Event 

The network selects validators depending on the size of their stake and the length of time they’ve held it. As a result, those who have put out the most significant effort get rewards. If transactions in a new block are invalid during a slashing event, the network may burn a portion of a user’s stake.

Cryptocurrencies you can stake. 

Bitcoins are still not staked, despite popular belief. Bitcoin transactions are validated via the “proof of work” approach, effectively a wall of computing power. These are why mining necessitates enormous processing groups and why Greenpeace opposes it.

Meanwhile, a new, energy-efficient technology known as “proof of stake” employs coins rather than electricity. Proof of stake technology is complicated. 

Coins having high-interest rates (at the time) include:

• Binance is a cryptocurrency that enables you to trade (BNB).
• Ethereum 2.0 (ETH) is a multi-layered cryptocurrency platform.
• Polkadots (DOT) is a more recent cryptocurrency that allows for interoperability.
• EBITDA is a decentralized application that allows you to (BIT).
• Cardano is a cryptocurrency (ADA).

Platforms where you can stake crypto 

There are a number of platforms that allow users to begin staking currency instantly. Most crypto investors are undoubtedly aware of big-name services like Coinbase and Kraken, which enable members to stake coins. To benefit from incentives on exchanges like these, investors must opt into staking.

Staking-as-a-service firms, which specialize in staking rather than exchanging, are another option for enterprising stakers. MyContainer, Stake Capital, and Staked are some of these platforms.

It’s vital to note that the products, rules, and prices for each platform will vary. Before you jump in, spend some time investigating a few to ensure your aims coincide with the platform.

Conclusion 

Comparing crypto staking to putting money in a savings account may be beneficial. While the money is in the bank, the depositor obtains interest as a reward, which utilizes the money for other reasons. As a result, staking coins is analogous to earning interest.

There are a few drawbacks to staking cryptocurrency because it is a financial asset. However, it’s essential to consider the block rewards associated with the staking coins you own, as well as the fluctuations of cryptocurrency in general—if the coin’s value drops, so will the value of your staking interests.

Staking is a process of earning additional benefits with your crypto assets or coins. It’s important to remember, though, that staking isn’t without risk. 

With btsr.io, we can enable you to discover more about how to stake crypto and make it easy for yourself by understanding the benefits and pitfalls in great depth.

Paying taxes in the UK can be burdensome for a US citizen. Not only do you have to worry about how to file your US taxes from the United Kingdom, but you also have a slew of new questions to address.

US expat tax accountants specialize in navigating complex international tax laws, ensuring that Americans living abroad remain compliant with IRS regulations while optimizing their financial strategies.

So, if you’re an American living and paying taxes in the United Kingdom, we’ve put together this basic but essential guide for you. If you’re a US citizen who is living in the UK and filing taxes, read on!

What US Citizens Who are Paying UK Taxes Should You Know About the UK’s Tax System?

Her Majesty Revenue & Customs (HMRC) is the UK counterpart of the IRS. The HMRC is the United Kingdom’s primary revenue collection agency, responsible for collecting taxes, administering various regulatory frameworks like the national minimum wage, and disbursing some forms of public assistance and welfare, including issues related to obtaining a UK tax number.

The tax year in the United Kingdom runs from April 6th to April 5th. If you file your tax return electronically, you must file it by January 31st of the year after the end of the tax year. If you are filing your tax return on paper, you must complete and file it by October 31st of the year after the end of the tax year. There is no automatic extension for filing your UK tax return, but if you meet specific criteria, the HMRC may eliminate the late filing penalties. The HMRC examines each case on its own merits.

You will need to apply for a National Insurance number to work in the United Kingdom and, as a result, file your tax returns. You will enroll for a number through Jobcentre Plus. You’ll need identification, proof of marriage or civil partnerships, and proof of residency.

The UK tax system is similar to the US tax system in that you pay tax on your salary, wages, business revenue, and investment income when you earn them. Pay As You Earn (PAYE) taxes are a type of payroll tax. PAYE is a payroll system that incorporates your income tax and social security obligations. The tax system is progressive, which means that the more money you earn, the greater your tax rate becomes. National Insurance will be discussed later.

Couples who are married are unable to file a combined tax return. Although each person is responsible for filing their tax return/assessment as needed for their income, there is a marital allowance that permits one spouse to shift some personal allowance to the other.

Who is Required to File a Tax Return in the United Kingdom?

Individuals receive tax return forms from HMRC. If the HMRC determines that you have paid enough tax through payroll withholding, they will not issue you a tax form, and you will not be required to file a return unless you have more income or circumstances.

If you have additional sources of income, such as self-employment or investment income, you must submit a tax return and pay the taxes associated with such income. You may also be required to file a tax return in the following circumstances:

• Renting out a property as a source of income
• Profits from the sale of stock, a second home, or other assets that result in a capital gain
• While you were living in the UK, you generated income from non-UK sources.
• If you or your partner earned more than £50,000 and you claimed child benefits,
• Your annual income was at least £100,000

Donations to charity, private pension payments, and job expenditures over £2,500 are all common deductions.

You must register with the HMRC online if you have not gotten a tax form from the HMRC but need to file one. Because a verification PIN must be mailed to the taxpayer, the registration procedure takes 10-14 days to complete. If you need to register online, do it as soon as possible to avoid fines for late filing.

Who Can Be Considered a UK Resident?

The rules given by HMRC in the UK are used to determine if you are a UK resident. In general, your residency will be established by your long-term goals and the number of days you are physically present in the United Kingdom. Each day is considered as being present in the UK at midnight in the UK.

• If you spend 183 days or more in the UK and do not plan to stay for more than two years, you are a resident for the tax year. You will not be deemed a resident for tax purposes if you spend less than 183 days in the UK.
• If you spent 91 days or more per year in the UK on average during the last four tax years, you will be deemed a resident for tax purposes. If you intend to spend more than 91 days in the UK on average every year, you will be classified as a resident for tax purposes from the day of your arrival.
• If you plan to stay in the UK for at least two years, you are considered a tax resident from the day you arrive.

Are You An American Working in London and Need Assistance with Your Taxes?

Taxes for Expats is here to help you with your taxes. Let us know if there is anything else we can do to assist you! With our guidance, it’s easy to understand the tax system in the UK and how this will affect Americans living abroad. We also have resources on many other topics that relate specifically to expat life overseas — all you have to do is ask!