• Wed. Jun 22nd, 2022

Here’s Why Eco-Friendly Cryptocurrencies Should Be Your Next Investment

ByHazel R. Lang

May 14, 2022

The buzzwords of 2021 for investors and traders, globally, were cryptocurrencies, blockchain and their ecosystem. In 2022, the conversation has now shifted to an advanced version called Wrapped Tokens. Simply put, Wrapped Token eliminates the inefficiency and limitation of existing cryptocurrencies by enabling operability on different blockchains. Thus, a wrapped cryptocurrency like Wrapped Bitcoin would derive its value from Bitcoin prices but could operate on the Ethereum network.

Wrapped tokens, which can take the form of crypto assets, digital collectibles, stocks, shares, commodities, fiat currencies, and real estate, among others, ensure that non-native assets can be used on any blockchain and thus can enable seamless interoperability. This, in turn, opens up liquidity and gives investors the opportunity to earn fixed income through smart contracts.

In order to understand why it is slowly becoming an investor favorite, globally, it is imperative to understand its benefits.

Decentralized finance

Decentralized finance (DeFi) applications have been launched to move from traditional centralized financial services to their decentralized counterparts. Apps such as Compound allow a user to override banks, as well as provide cash for rewards. It can be safely concluded that Wrapped Crypto was considered due to the expansion of DeFi for greater liquidity and flexibility.

Staking Wrapped Crypto

Staking is the process of earning passive income from the crypto asset without realizing its sale. Although there are currently several versions of staking protocols in use, it usually involves the user placing their cryptocurrency in a contract for an agreed term in exchange for rewards. This makes it one of the most renowned DeFi features.

Crypto Wrapped in Yield Farming

Yield farming is a bit different from staking in the sense that farming protocols have shorter blocking periods. Additionally, many systems allow network users to lend their crypto with interest. This makes Yield Farming another DeFi protocol that continues to gain momentum in the industry.

Liquidity

Wrapped Crypto promotes greater liquidity in the crypto market. In effect, it merges liquidity with the flexibility of interoperability. Previously, there were instances where decentralized exchanges and other platforms did not have sufficient liquidity to operate optimally and Wrapped Crypto bridges this gap by closing the liquidity loop between many CeFi and DeFi products.

Scalability

Liquidity and scalability go hand in hand with Wrapped Crypto. Due to interoperability, transactions for Wrapped Crypto are cheaper and faster. Since these tokens exist on the Ethereum blockchain, they provide the user with more storage options and an increased number of transactions, which makes scalability another significant advantage.

New features

Needless to say, the scope of Wrapped Crypto offers users more features compared to regular Crypto. Smart contracts are considered a core technology of the blockchain industry as they are self-executing pre-programmed protocols.

In a word

These massive benefits for crypto traders have led many investors to use the new technology instead of simply acquiring the underlying token itself. This has helped create a new sunrise sector in the blockchain landscape. According to reports, there are now over $1.1 billion in Wrapped Crypto in use globally, indicating its growing adoption. Today, investors around the world are seriously considering Wrapped Cryptos as their latest investment. What’s stopping you?



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Warning

The opinions expressed above are those of the author.



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