Crypto Investments

Weekend Dip – Why does it happen?

For starters, one of the coolest thing about crypto trading is that you can trade crypto 24 hours a day. There is nothing stopping you for trading into the wee hours of the day and the next morning as well. Hence we often see wide swings in a 24 hour cycle as groups of people start waking up and listening to FUD and FOMO news and start their fanatic trading. And I like it. Sometimes at night when I have nothing else on my plate, I would like to take a look at the crypto market and see is there anything nice to buy or something to sell. If you are like me with a full time job and treat crypto as a hobby, this actually is for you. The traditional stock market is kind of impossible for most of us if you are working full time, unless you are sneaking off work to do trading during your shift.

But as I started crypto trading a few months ago, I realized that it seems that the market tends to drop at the weekends. Which initially I thought was kind of strange as weekends would be the best time to trade. Then I understood that small time retail traders like me basically don’t move markets. What we “pump” into the market in the weekends, probably isn’t much of a blip on the crypto radar.

So why is it exactly that causes the dip in the weekends, especially if you are looking from the US side. Well here are some rather interesting observations.

  1. Banks are not open. It is simple as that. When banks are not operating, it is kind of difficult to buy cryptos right? For traders in Singapore, remittance from the banks will only be processed during the weekdays. So nothing is being moved during the weekends. So if you are hoping for the pump, you might want to reconsider. Of course you could consider P2P trading via bank transfers but again, those would probably be smaller amounts. Not enough to move markets. With reduced sources of funds coming in…well we get spooked much easier.
  2. Low volume? Less institutional traders and whales means less trading volume. Not all those high stake traders would want to work in the weekends. They would probably want to go out to party, get drunk and others. And they can afford it, no problem. Even with extremely hardworking ones, they still have to rest sometimes. If they don’t rest during the weekdays, the only option would be the weekends. And with less volume means that it is easier to manipulate prices by those who remain. This actually makes perfect sense as prices can move much easier if you have just 10 traders compared to 100 traders.
  3. Liquidity issues. Same as the low volume, the low liquidity in the liquidity pools means easier to move prices. That is a fact. Just imagine comparing 10K ETH & 400K UDT and 1K ETH & 40K in a pool. Which would be easier to manipulate? Of course this would not explain why the prices go down during the weekend. But the next point should.
  4. Combination of all of the above. So now just imagine you are a weekend trader in the volatile crypto market with all the above happening. What will happen? Unless we get some positive news, the inevitable will happen – prices will drop. There is less trading volume and less to sustain the prices. And with less support (funds coming into the crypto market) means if some negative happens, it will tend to go to the downside.

Yes I cannot be definite that prices will always dip during the weekends. In fact there are numerous times where prices rise significantly during the weekend. There are also lots of crypto experts saying that this weekend dip theory is just not true. The crypto market is just so volatile. But in a lot of cases, I think this often holds true. Of course you should do your own research and never based what you are planning to buy or sell on just one blogger.

Crypto Mining

Interesting history behind Nicehash

Some of you guys should already know that I am crypto mining on Nicehash. Basically I mine Ethereum on my gaming computer and get paid out in Bitcoin. As to whether it is really that profitable, well only time will decide. Psst….not really that much profit broskies! Especially if using only a single rig for mining. If you want profitability, I guess you will need to get a good number of rigs and be very efficient especially in terms of energy consumption. Yes mining takes up lots of energy and in countries where the cost of electricity is high, it will usually not be profitable to do mining. Furthermore you will need to tweet your graphics card to give you more hashrate.

Anyways I have been reading up a little on Nicehash recently and it seems that the founder of Nicehash – a certain gentleman by the name of Matjaž Škorjanc has quite a reputation. Seems like he was involved in creating malware botnet called Mariposa Botnet. A Botnet is basically a group of compromised computers on the Internet and their purpose is usually malicious. Just think of them as a group of computer (usually after being infected by malware) on the Internet which can be controlled by someone and made to do attacks. And this particular botnet application is supposed to steal passwords and credit card information. Seems like Matjaž had been a naughty boy. And the FBI seems to be on him for a long time. But this is as expected. I mean if someone created a malware that caused lots of problems for innocent users, surely the FBI should go hard on him.

It is also rather ironic that Nicehash were a victim of an attack themselves. Apparently through some form of spear phishing in Dec 2017 and 4,700 BTC was stolen from their wallet through some “CryptoNeuro Trader” application. Where is Matjaž’s skill when it is most needed eh? And recent news seem to suggest that this attack was done by some North Korean hacker group. And this hacker group apparently are part of the North Korean military. I guess when the world can do nothing to you, why not just go hack everyone for profit. There is basically nothing to lose. And looks like it is very profitable. The North Korean hacker group also targeted an Indonesian cryptocurrency company in 2018 as well. Seems like the North Koreans understood the value of cryptocurrencies much better than the rest of the world. Especially governments around the world.

And it seems that this North Korean hacking group is pretty well known in the community. There are primarily known as Lazarus Group and Advanced Persistent Threat 38 (APT38). But I am guessing the FBI won’t do much to these groups all the way in North Korea. It is not like they can go ask Kim to extradite the group to the US right?

It is also interesting to note that after the hack, Nicehash did pay back the customers ALL the funds that were lost. Their repayment program started in February 2018 and by Dec 2020, they repaid 100% of the funds lost. There was also an conspiracy theory that this hack was actually some sort of an inside job. And they did it because they knew that the price of Bitcoin was going to tank and they would be able to cash out first to the profit from the sale before slowly returning to their customers. Well the FBI report do seem to prove that theory wrong.

Now we can all look at Matjaž past history and think ill of him. But he did the right thing. He could have simply just close Nicehash and ran away as it is kind of difficult to even do much as most of the customers of Nicehash would probably not be in Slovenia. Much more than I can say of plenty of other financial institutions. Just imagine if our local bank was hacked, what would they do? Probably run to the government and beg for handouts. Or even ask for protection against those whom they owe money to. So if you have been mining or trading in Nicehash, I don’t think you have much to worry about. Hopefully they have improved their security. Note that in 2018 to 2020, it is the bear market for cryptos and Nicehash still managed to pay back their customers. Now if that does not stand for something, I don’t know what is. So kudos to Matjaž and the team at Nicehash.

No, I am not paid by Nicehash to advertise for them. I just feel that in the cryptosphere where there are so many scams, lies, deceit and rug pulls, Nicehash does stand out to be rather different. And it is indeed very refreshing….If you want to read what I am mining at Nicehash, take a look at this post.

Crypto News

Why XRP is still down in the dump?

Yes I know that the market has been down lately. We had a few crashes the last few weeks and things don’t look that great. It is quite expected right? Seeing all the bad news that seem to be appearing everyday and those really did hurt the crypto market. And look at BTC taking a huge bashing left and right. As of the time of writing, BTC has dropped to about USD33K. But luckily it did bounce back when it tested the 31K level. Is this actually good news for us. We are very likely not in a bear market at least for these coming few weeks. Hopefully.

But anyways the price of XRP seem rather stagnated to me. It has been very sluggish since the middle of May and has not really recovered. At most the price is moving maybe a bit sideways. Very surprising indeed. I would expect it to recover much faster than most other altcoins as the coin’s use case is getting to increase. Although the story of the US SEC trying to extend a further 2 months for the discovery in its “legal” fight with Ripple did a number of the price, I would think it shouldn’t matter that much. The US SEC and Ripple has been embroiled in this fight for years already. And XRP is one of the oldest altcoins out there, so a mere 2 months should not really do any harm. It has endured the 2018 crypto winter and should have some very strong fundamentals. And their main association is with banks and other financial institutions! Surely we would not expect banks to crash right? Who doesn’t want to transfer money overseas (aka remittance) in a fast, secure and low cost manner? I know I do. For those who are interesting in how Ripple and XRP work, please check out this article from investomania.

And I believe that the SEC case against Ripple does not seem to be strong. Furthermore I think that the SEC and Ripple could settle the case out of the courts fairly soon. And once that happens, the price could rise significantly. Of course this is not financial advise. Please do your own research when doing investing.

As to why the price of XRP is still so low? Well I think it could just be market jitters. Seeing how the market reacted the past few weeks I am sure a lot of retail investors are less bullish than before. Those 3 major crashes also caused a lot of investors to exit the market. Furthermore, the lack of any good news regarding XRP or ripple probably made institutional investors stay away as well. So if both retail and institutional investors are not buying, then the price will stay at these low levels. So investors should not panic too much. I myself don’t think that we will have another “crypto winter” or some doomsday scenario where the crypto markets will not recover. I mean surely there will be periods where the market will be bearish but I feel it would be rather short and it will recover soon enough.

Crypto News

How the FBI seized bitcoins from Colonial Pipeline attackers?

Seems that the headlines these few days are all about the FBI seizing bitcoins (back) from the Colonial Pipeline ransomware attackers. And this got me a bit curious on how did the FBI even manage to get the private key of the attacker(s) and got into the bitcoin wallet. Note that the wallet which the FBI managed to get into (aka via its private key) is not controlled by the Darkside group but apparently just an “associate” of Darkside. So basically Darkside provide the service while the “associate” did the actual attacks. Think of it as “hacking as a service” kind of thing. Nowadays “hacking” have to be very complicated and requires a good number of parts to execute. So a group of hackers with different expertise are most likely needed in order to execute the attack successfully.

For those who don’t know what happened, let me give you a brief rundown of the “hacking” incident. In early May or late April of this year (2021), Colonial Pipeline which provides transportation of gas and other fuel suffered a ransomware attack. This caused a lot of their systems to go offline and thus the pipeline was affected. And yes, they are the handling the biggest petroleum pipeline in the United States. That means this disruption caused a lot of problems for the Americans and the American government. Gas prices rise and shortages occurred in parts of the country, mainly due to panic buying rather than actual shortage. But we are talking about an attack which made the headline news and probably lots of government officials had to be awakened from their sleep. And yes it seems that Colonial Pipeline did pay the ransom to the attackers to get their system up and running. About 75 bitcoin in total. So go forward to today (6th June) and it was announced that the FBI has retrieved the majority of the bitcoin paid to the attackers (about 63.7 bitcoin).

But the interesting thing about this is how did the FBI manage to get the private key of the attacker’s wallet? I know that it is not difficult to trace the transactions as the blockchain ledger is public. Anyone with a blockexplorer can see where the bitcoin(s) came from and where they went. But actually getting the private key to the wallet is quite amazing, even if we are talking about the dark arts of the FBI. Mathematically it is nearly impossible to “crack” the public wallet address to get the private key. So I think it is highly unlikely that the Americans have some special software or code to. And if they did, it would seriously be something that will affect the entire crypto market. People will lose trust in bitcoin and the entire crypto sphere as well. Perhaps that is why the market is tanking today. But we might be thinking a bit too off right? If the FBI can get into anyone’s private keys, why did they stop at the “associate’s” wallet only? Why not get all the bitcoins back even from Darkside group themselves? So hold your horses and stay calm.

A better answer would be Darkside group itself. We do need to be reminded that it was not Darkside’s wallet that got compromised. It was their “associate’s”. Could it be that Darkside backstabbed their “associate” to get the FBI off their heels? I mean private keys are merely numbers and letters that one can just write down on a piece of paper. Or stored somewhere maybe in a computer? If you know the person doing the attacks, surely it would not be that difficult to get the private keys by hook or by crook. So we shouldn’t be too alarmed. I am fairly confident that the Bitcoin network is still secure.

Or perhaps even the Russian government trying to make sure that this ransomware attack does not become a political nightmare for them in the international scene. Or perhaps too much American political pressure on them. We know Americans can be a bit heavy-handed when it comes to petrol right? They love their gasoline and if you disrupt the flow, you are going to get it! Not a good idea to get in the way of Americans and their petrol. Or maybe just to protect their own reputation a bit. Or they worry about what the Americans would do to counter these criminal groups? Even though the Russian government themselves might not be directly involved, it certainly does not look good on the country. I read that the Americans did indeed ask for the Russian’s assistance which is entirely plausible.

Furthermore it could even be possible that the hacker group themselves gave the private key to the FBI. Maybe they cannot take the heat or maybe they are under pressure by others in their organization. Or for them to avoid any sort of prosecution from the authorities.

I initially thought that the FBI had retrieved the Bitcoins because the attackers had sent the coins to an centralized exchange. In most cases, there isn’t really a good way for these criminals to convert their bitcoins into fiat currencies which they can use. So they have no choice but to send to these exchanges. This is usually where the authorities are able to catch them as most exchanges need some form of KYC. Especially when we are talking about millions in value. Or at least they will force the exchanges to freeze the accounts. But seems that this is not the case.

Crypto Mining

Making passive income – staking ADA (Cardano)

For those who are uninitiated, there are different types of blockchains for different cryptos. The most famous is of course proof of work. Basically these cryptos depends on huge amounts of computation power to create blocks (ledgers) and help secure the network. Popular proof of work blockchains are Bitcoin, Litecoin and Monero. There is yet another mechanism called proof of stake. These are different from proof of work as they are dependent on the amount of cryptocurrency you “stake” in order for the user to “mine” blocks. In most cases, the more tokens you hold, the higher the chance you get to “mine” a block. In other words, to get the most reward you will need to have a lot of coins in the first place. The advantage is that it is supposedly “green” as you won’t need the energy consumption as for proof of work.

Staking is a good source of passive income as well. They will usually require the “staker” to add into a staking pool a certain amount of tokens which will be held in the pool for a fixed amount of time. For direct ADA (Cardano) staking however you will not be able to take out your coins from the pool until the staking period is over. So please beware.

As I usually hold most of my cryptocurrencies in Binance [referral link], I will show you how to get into staking in that exchange platform. Note that you can of course stake your ADA in the official Cardano wallet called Daedalus Mainnet or their lightweight web wallet Yoroi. Go to your spot in Binance and on the right click on Earn. You will be presented with the “Locked Staking” option. Click on that.

Scroll down till you find the ADA token and choose the duration. In most cases, the shorter the duration, the higher the APY (aka returns). However this means that you will need to come back often to do staking once the staking period is over. As you can see for the 15 day staking period, the estimated APY is 17.79%! Not too bad if you ask me. But do note that sometimes the staking pool will be full so you will not be able to stake the 15 days duration if you miss the opportunity as it can be very popular. And as the 15 days staking interest is so much higher than the 30 days interest, sometimes I wait for a day or so to check if there are any availability in the short period pool slot. So if you are ready to stake, click on Stake Now. But before you do that, make sure you understand that if you redeem earlier, you will lose all the interest you have accrued. Yes so please be sure before you do any staking.

Once you ensure that everything is fine, tick their service agreement and then confirm purchase. Not too sure why it is called an “purchase” but I am guessing it is a “slot” to purchase. Anyway you are done. It should start earning rewards the next day. A gentle reminder that the APY is an estimate only. Should always be prepared that there will be some fluctuations in the rewards. This is crypto anyway. The crypto market is known to drop drastically when Elon Musk sneeze or the Chinese government goes and ban Bitcoin for the 50th time.

If you are interested in maximizing passive income returns on your cryptos, you should take a look at the list of those staking in Binance as well. Some of the APYs are quite good. Sometimes when the market is down and I have some spare stablecoin available, I will scroll down this list and see which tokens are giving me the best returns from staking. If you were to look at the above example, Matic is giving a 43.29% APY for the 15 day staking period! However at the moment the slots are sold out. But how about ATOM? That is 34.47% staking APY returns! This is what I call a nice passive income. But not exactly as you will need to come back 15 days later and do another round of staking if there are available slots.

May the passive income gods bless your returns many fold! If you are looking for a guide to start buying your first crypto on Binance, it is available on my blog here. Or if you are interested in my other passive income strategies?

Crypto Investments

Nexo – Maximizing your interest returns on your cryptos

You guys know that I am a Nexo [referral link] fan. Sure they don’t have any referral codes or links which I can use but their interest rates are good and their interface easy to navigate. And no confusing financial jargon in their fine print as well.

In this article, I will be telling you how to maximize your interest rates from putting your cryptocurrencies into their platform. Note that Nexo is a lending platform. So what that means is that they are something like a bank where customers deposit money and the bank lends it out. However they are not just like any other traditional bank, their rates are much better and they are pretty transparent (at least more transparent than most traditional banks I know of).

Loyalty levels” is basically a way for Nexo to incentivize their customers to hold Nexo tokens. Nexo tokens are the native tokens for Nexo. The more Nexo tokens you are holding in Nexo wallet, the higher your loyalty level is and the more benefits you get. You can take a look at the interest rates they are offering above. And for those who are planning to borrow cryptos from the platform, you should really look into holding at least some Nexo tokens. The reduction in the borrow interest rate is quite significant. You can check out how much Nexo token is need to get those loyalty levels in your profile page. However direct purchase of Nexo token might not be available in certain countries. Probably due to certain laws in these countries.

One thing I don’t understand is why Nexo is “punishing” bigger players as they have to get more Nexo tokens to keep up with the loyalty levels. As you can see, the loyalty level is determined by the percentage of Nexo token in relation to the other cryptos held by the investor. I am guessing that would force the investor to get his or her interest payout in Nexo tokens then. But still feels to me that it is a rather round about way to increase the demand for Nexo tokens.

Other than the difference in interest rates, you can have up to 5 free withdrawals from Nexo as well. This simply means that you can withdraw your cryptos without any fees for up to 5 times per month. However there will most likely be network transaction fees. These fees are something Nexo do not have control over. Just imagine you are transaction via the Ethereum blockchain! The gas fees might even be more costly than the interests you accrue! So make sure you know these “hidden” costs when doing transfers. Isn’t it ironically that cryptocurrencies were meant to cut away costly middlemen, but only to have actual transaction fees being the biggest killer? Thank god for Polygon/Matic eh?

Advanced Verification – you can earn dividends from your Nexo tokens! Complete their KYC to achieve advanced verification status and you will earn some dividends on the Nexo tokens you hold. Note that Nexo will keep 70% of the profits while the rest (30%) will be issued out as dividends for the Nexo token holders. [8th June 2021 Update]Note that as of 8th June 2021, Nexo token will now be changed to give interest rates of up to 12% just like stablecoins. This was just changed via their voting system.[/Update]Of course those Nexo tokens must be held in your Nexo wallet and not used as collateral in any credit line. However all these information might change in the future so it is a good idea to check out their blog regularly. And Nexo is looking to improve the advantages of holding its token in their 2.0 version. Watch out for their news. Yes I do admit that currently there isn’t any real use for its token as of yet. At least to me, it is not that attractive at the moment.

Another way you can maximize your returns is just to have your interest payout in Nexo tokens instead. This might not always be attractive to most users as we usually want the payout to be in the same crypto which we have put in. But if you want the extra 2%, why not. Can always swap back to the original cryptocurrency whenever you want. Of course you might lose a little on the swap/exchange and hoping that the value of Nexo tokens rises but overall I think the 2% is still quite significant over time. And if you are putting your cryptos into Nexo, surely you are planning to hold onto your cryptos for some time right? Note that you will need to complete KYC before you can apply for the interest payout to be paid in Nexo tokens.

Note that all the percentages in Nexo are in Annual Percentage Yield or APY. So that includes the compounding interest as well. If you would like to know more about difference between APY and Annual Percentage Rate or APR, please read this.

Oh I need to mention again that I am no financial advisor. Please do your own research first before doing any investing. And if you are thinking of putting your funds into Nexo, you might be interested in my step by step guide for your first deposit into Nexo. Please take a look. Hope that it will be useful.

Crypto Investments

HODL, crypto variety & dollar cost averaging strategy

Why keeping a number of different cryptos in your wallet is a good idea if you are planning to hold on to your cryptos? Well there are “various” reasons. Please read on for why I believe keeping a variety is better. And with dollar cost averaging, we will be able to get further with our investments.

HODL – Holding On to Dear Life. Basically means you are keeping your cryptos for the long term (like for years) and not selling them even when the market moves for the short term. In my opinion, this is actually a pretty good strategy. If you are going in for the long haul, HODL will usually yield you better results rather than keep buying and selling. This is because inevitably the market will turn bull. And whatever “crypto winter” will end. I would like to add that in addition to HODL, you can also dollar cost average your investments. This means you simply divide up your investment funds into smaller chunks and deposit at regular intervals. This strategy is very good in such a volatile market like the Crypto market. A good time to enter is when there is a dip. But honestly it is nearly impossible to predict the low or the high.

However do note that if the crypto you are planning to HODL is not sustainable, the price might go to zero. So only HODL those with at least some potential to be good. Not those meme coins (like our beloved DOGECOIN) or rug pull coins which might disappear the next month or year. For those tokens, I would suggest you not to keep for the long term. They are mainly for speculative trading only.

However there is one more often forgotten trading strategy – getting into a variety of different types of cryptos. No, I am not saying buying up all the top 20 cap cryptos you see on the exchange, but choose a few different types of cryptos – like defi, smart contracts, store of value and even stablecoins. But why you might ask? Well….because they simply spread the risks. Just imagine you are holding only BTC and one fine day some very strange celebrity claims that Bitcoin is one of the world’s most inefficient currencies out there and he wants to destroy it. We don’t want to name names here but we all know what the impact will do when someone does it. Same for Ripple and their XRP tokens right? Such things do happen in the Crypto sphere and the project might take a huge hammering in the short term. So yes spreading your risks around is a good idea.

The reverse can be true as well. Again imagine if you are holding those SWAP tokens and one fine day, the biggest centralized exchanges got hacked or went down or got shut down by the government. What would that mean for Decentralized Exchanges or DEXs? It means that traders will have no choice but to use DEXs now. Of course the entire Crypto market will take a slight dip as traders and investors will be extremely concerned but they still need to do trading right? And to do trading in those exchanges, you will need the underlying tokens. So demand for these SWAP tokens will increase and thus the price will rise as well. And if you are holding these tokens, you might want to offload them to cut your losses from your other crypt holdings. You can of course use the profits to go buy cheap cryptos as well. Win- win situation.

Stablecoins is yet another category of tokens which a lot of traders do not carry in their portfolio. But is it often underrated. Who can blame them? Their main purpose is for traders to exchange other cryptos with. It just makes trading easier as we get a stable “currency” to trade with. However keeping them in your wallet and able to use them at a moment’s notice can be mean huge profits. And if those “HOLDers”, the stablecoin interest rates are pretty high if you are thinking of lending them out to others. Sure they don’t increase in value but they are always in demand. I will usually keep a small portion of my portfolio in stablecoins, especially if the markets are down. I think of stablecoins as convenient “cash” sometimes. It is always good to have some cash on hand am I not correct?

Even keeping some store of value tokens can be a viable trading strategy as well. These are easy to understand tokens and you don’t need to too much technical knowledge to use the token. And these are usually what big institutions and whales usually aim for. So when they pump it is usually big money. Of course when it dips, the reverse might be true as well.

So investors should diversify their portfolio. If you have been targeting only one or two coins, I think it might be better to start changing tactics. And of course you will learn more about the different types of cryptos out there as well. And with more knowledge, there will be less FUD and FOMO around. And with less FUD and FOMO, the crypto market can finally mature. Hopefully. And please ensure that you have sufficient funds to meet your daily needs in case of a sudden downturn or unexpected need.

By the way, I am no financial advisor. Please do your own research and all investments come with a certain level of risk. You can check out my portfolio and see which tokens I am currently holding.

Crypto Investments

Being a liquidity provider – is it a good idea?

You have to admit the yield rates for being a liquidity provider (LP) looks very attractive. Some DEXs (Decentralized Exchanges) offer like up to 40-50% APY for being a LP. Definitely something every investor in the Crypto market would be somewhat interested in. The first time I went into investing, I was too shocked to see the extremely high returns for being an LP especially if you are putting in both pairs into the pool. The common DEXs are Uniswap, Binance DEX, Pancake Swap and numerous others. Note that some of them are running on the Ethereum blockchain, so their “gas” fees might be pretty high. However I would recommend users to only provider liquidity to DEXs which are more established.

Anyway before you dip your toes into being a liquidity provider, there are some risks you should know about. I am no financial advisor and everything on this article is just for informational and educational purposes. So please do your own research. Anyway back to the risks and there will always be a risk. I would even consider this quite a high risk considering that the Crypto market is volatile. The biggest risk is something called IMPERMANENT LOSS. Basically it is when the prices of the coins or tokens you have added into the pool changes and change drastically.

To simply explain how this works – you add in tokens or coins to the pool and the percentage of your stake is now recorded, lets say 10% of the total amount of tokens in the pool. If one of the token’s value increases, there will be a corresponding decrease in the NUMBER of that tokens in the pool. This is due to arbitrage in which bots come in and start buying up the tokens and hence the number of tokens are reduced. And lets assume that you would now like to withdraw from the pool and as the total amount of tokens in the pool has reduced, your 10% stake will result you in withdrawing LESS tokens than what you have initially put in. And this becomes PERMANENT LOSS. Of course since the LP gets the cut of the trading fees, the loss might not be that great. However if the price of the token rises a lot, you might see a significant drop in the number of tokens you get back especially if compared to just holding on to the token. The opposite is true as well. If the price of the token drops, you will see an increase in the number of tokens you get back when you withdraw. Note the difference between number of tokens and value of tokens. And you are basically hoping that the trading fees (yield) will be more than the loss.

Other than this IMPERMANENT LOSS risk, there is also a risk whereby the DEXs get hacked or exploited and funds get stolen. I believe recently there were a few cases of such hacks occurring. The most famous DEXs that got hacked into recently was DODO. But luckily the amount stolen was relatively small. However this shows that such things do happen. Furthermore DODO is one of the top ten DEXs out there. Kind of disappointing that such attacks still occur for major DEXs. And depending on the DEXs behind it, LPs might find that they might not get back their tokens. And no, the users (as in the traders using the DEXs) usually will not be affected as these DEXs usually work via having their traders transfer tokens in and out of their own wallets. However as the recent Pancake Swap incident shows, even DNS can be hijacked and users (aka traders) can be compromised.

So is it worth the while to become a LP? If you are like me who is not a huge risk taker, I think it is not a good idea to get into providing liquidity to pools. Although many of the DEXs allow you to take out from the pool immediately, there are still plenty of risks involved. There are other passive options out there – lending platforms being one of the them. Or even just staking your tokens. Furthermore the Cryptomarkets are so volatile. Prices of the (non-stable) coins will inevitable rise and dip. You will almost certainly face issues with impermanent loss. But if you are looking to get some major returns without the need for trading, then sure you could look into being a LP. The returns are indeed very attractive. These usually consists primarily of the trading fees levied on the traders. However you do need to know when to withdraw from the pool. For small scale traders like us, the market going up is the time where we should be selling our tokens. However when the price of tokens varied greatly, this is when the impermanent loss is the highest. So please beware if you are looking to become a LP.

Note that in most cases, the liquidity pools would require you to provide an equal value of the pairs for the pools. So for example USDT/DOGE pool, you will need to provide the equal value of USDT and DOGE to the pool for better returns.

You might also be interested in what FOMO & FUD means. Please check out my little rant on how that works and why it could ruin your trading experience.

Crypto Mobile Crypto

Bee Network – Yet another mobile mining application

I don’t really have anything against mobile “mining” applications but I feel that the Bee Network really needs to provide its users a little more information about their application. Yes their white paper has improved quite a lot since I first started using this app but still I have no idea what are their main purpose here. They talk about being a Decentralized Autonomous Organization (DAO) and whatever the advantages of being a bee is but nothing much else remotely concrete in this white paper.

And their core team seems to be hidden behind some mysterious cloud which is kind of surprising as they keep saying that they will announce the members, sponsors and even the advisors for quite sometime. Is it really that difficult to give the names of the core members which should already have been around since the beginning of the project. Not too sure why the secrecy, especially considering that they do have some big financial muscle behind them. At least judging from their domain name – That is one pretty expensive domain name.

Anyway enough of my ranting. We should be checking out their mobile application and finding out whether they are a scam or are they the real thing. After using the application for a few months, I didn’t face any issue with the app. Runs fine and none of my friends complained that they had any issues either. Very lightweight as well. And I must say, the interface is pretty decent. Definitely much better than the Pi application. Probably something the Pi team should take note of. Having a slick interface makes the users want to keep on coming back, even if it is just to tap a button.

As to whether it is a scam? I personally don’t think it is a scam though. Someone made the effort of creating the application, the pretty long winded white paper and the app is being updated constantly. And they don’t seem to be selling me anything. I have not paid a single cent since I started using the app. And no advertisements either. Which is pretty nice, considering that even the Pi Network app do have advertisements. I am guessing the most probable explanation could be this could be another commercial venture for a mobile gaming network and they are trying to promote it by making it into a crypto mining community.

For the uninformed, these crypto “mining” applications do not actually “mine” coins. They are merely simple applications to distribute virtual coins to the user and just only require the user to open up the app once per day to get the rewards. You won’t need that much processing power or even bandwidth for this purpose. In this case, the Bee Network app gives the user Bee Tokens. And how much is the Bee Tokens worth? Nobody knows. Heck, I don’t even know whether the Bee Network will be successful or not. It could just disappear in a few months time, who knows? Admittedly, their numbers do look strong but I still have my doubts. At the moment there isn’t even any information on the type of blockchain engine they planning to use for the Bee Network. And it is kind of strange that they are following the exact “team” structure as Pi Network – team members and “verifiers”. This would suggest to me they will be also using Stellar Consensus Protocol (SCP). Direct copy of the Pi Network. So I am still on the fence on this project.

The number of users on this network seem to be increasing quite significantly if we were to believe the stats being shown on the application. Seems that they have reached 10 million users in like 6-7 months, while Pi Network has over 18 million. Pi Network is the first “mobile mining” crypto based application and looks like Bee Network is quickly catching up to them. If you would like read a little more about the Pi network, please check out my review there.

With all these being said, I honestly don’t see much harm to install the application and spend a few seconds everyday to tap on a button. For me, I just love meddling with my phone and a few seconds per day pressing the screen is nothing to me. All in the hopes that one day the Bee Network will be successful and I will be able to use my Bee Tokens for my retirement. Which is highly unlikely, so please don’t get your hopes too high up. But we can always dream right? And even if the project goes ahead, it would probably take a rather long time for it to mature and for the Bee Tokens to be worth something. Another reminder that Bee Network have yet to announce the type of blockchain it will use for their engine. But their announcement posts seem to suggest they are hiring staff and community members though. Might be a positive sign.

If you would still like to go ahead and give Bee network a try, you can make use of my invitation code: u27g8mdm when you sign up. Link to their website is here.

Crypto Mining

Monero mining – switching from 2miners to MoneroOcean

I have been mining Monero for a few months now. Not to say that the mining has been profitable – in fact it is not really that profitable. And it seems that mining at 2miners, the reward rate does seem very inconsistent. Sometimes I do get the rewards but at times even half a day can go by without any block reward (XMR). Perhaps it is because there are that less miners in the 2miners Monero pool or something but it can be rather frustrating for the miner.

Then I read about MoneroOcean and their algo switching miner program (basically a modified XMRig that does benchmarks for different algo and use the most effective one) which is supposed to set your miner to the most profitable algo for your rig. Yes Monero is supposed to be ASIC-resistant and they do use a number of algorithms to help fight against ASIC mining. If I am not wrong, the developers even change these algorithms frequently to ensure that there is no ASIC miner being made for Monero mining. Cool right? Do note that I mainly CPU mine, so the hashrate depends mainly on my processor(s). I have one sad rig using the new generation Ryzen and a few older ones. They seem to be working fine but the inconsistency at 2miners really irks me. So now I started changing all my rigs to the MoneroOcean pool.

And yes the consistency has improved quite significantly. I am getting rewards constantly. Of course the rewards per block found is much less as MoneroOcean has way more miners and rewards are shared. They are also a pool! However MoneroOcean have way more hashrate to compensate. As to whether it is more profitable – well it is pretty hard to say exactly but I think it has improved. Not by a lot but still a slight improvement. Their modified miner is supposed to fine the best algo for your computer right? And you should only use their modified miner which can be downloaded from their website. At the time of writing, their pool fee is 0% and the only way they make money is via withdrawal fees. Even their modifier miner is free without any donation to the developers. I will update this in a few months time to give you guys a fuller picture on the profitability.

As to the interface and user friendliness of MoneroOcean? The interface is okay. Nothing crazy to shout about. Gives you everything you need to know in one page. But the web interface is pretty slow and sluggish. Probably because I am in Singapore and their servers might be located far away. 2Miners however did not give me any issue though. Fast and responsive. When I refresh, the page refreshes nearly instantly. But seriously if you come back from work and you are hoping to see at least something in your rewards but discovered that no blocks have been mined – your morale and the will to keep on mining pummels. I think I will just stick with MoneroOcean if the rewards remain more consistent.

Yes my hashrate is pathetic but I usually CPU mine. Don’t really have lots of the newer computers with the latest processors at hand. I take it as an hobby. And it helps to secure the network as well. And those Ryzen processors seem to be doing a better job than Intel processors in getting those high hashrates. Not too sure why though. It could simply be the Monero algos being designed for AMD processors rather than Intel. If you are serious about Monero mining, there are plenty of guides out there to optimize mining. Seems that memory and memory timings also factors a lot when doing Monero mining. But I won’t go through the details here. And no, I will not recommend solo mining. It will probably take very long time to even hit a block and that means even less consistency! Always join a pool when mining.

Do note that if you are thinking of making profit with Monero mining, you should not only concern yourself with the hashrate, you should also be wary of electrical costs in your country. If you are living in Singapore with high electricity bills, you will most likely not make any profit at all. In fact, you could be making a loss after deducting costs. So please beware. I also mine with Nicehash using my graphics card. Mining ETH but getting payout in BTC with Nicehash. It is a GTX 1660 Super.

Update 4-Jun-2021: Yes the returns for MoneroOcean is better than 2Miners. Have gotten nearly over 30% more rewards than in 2Miners.