Remember when I told you that you can make your assets work for you just by letting them earn a yield? Yes? Ok. If you remember, that’s great. If you don’t, you’re in luck. Just keep reading, won’t you?
In this article, I’ll tell you everything you need to know about Olive Finance and how to leverage it to earn insanely interesting double digit yields!
In Olive’s case, the real yield comes from their structured products (such as covered calls) and not from a limited pool, thus the “real yield”.
Investing in cryptocurrency has gone beyond just trading assets. In fact, one of the many ways invest There is some sweet passive income to be saved and earned in cryptocurrency. Now you might be thinking, “How am I going to save and invest?” Actually, the only people who will Surprise They are people who are new and don’t know how it works. Because I believe on my first day. But hey, if you are a beginner, you are at the right place.
You know how you put (save) your money in your bank account and at the end of the month, your bank credits you with some extra money, Although very few? Um… yes.
In Tradefy, Bank borrows Your saved money, lend it to other people, and in return, you are paid some sort of interest. That’s exactly how it works here in DeFi, but it matters even more because you earn in crypto and the rates are much better. I mean what does your bank give you 1% compared to 10% to 30% APY and more?
It is important to note that APY stands for Annual Percentage Yield and takes into account compound interest. Compound interest is known as ‘interest on interest’ and it makes money grow exponentially. This is for those who are fairly new to the space.
Compound interest is the eighth wonder of the world. One who understands it, earns… who doesn’t understand… pays. Einstein
There are lots of protocols that pay higher APYs and because these rates are attractive, you’ll want to take your time before choosing the one that works best for you. The higher the APY rate, the more research needs to be done, as you don’t want it to fall into the wrong hands. Additionally, some DeFi protocols/pools may pay higher APY but only for a short period of time to attract new users. That is why this article is a review of one of the many protocols called Olive. In this article, we will discuss everything there is to know about Olive, how you earn on the platform, and the risks involved. even more!
BTW, if you want to learn all about DeFi, check out this DeFi course.
Olive was formerly known as Polysynth, and it is a multi-chain protocol that maximizes your yields using its structured products without putting your money in risky positions where all your money could go.
When we say ‘multi-chain’, we mean that it is deployed on multiple networks such that they interact seamlessly. Olive runs on Ethereum, Polygon and Arbitrum.
Take a deep breath Now let’s go at it again, this time more slowly.
olive allows you Make up to 34% APY on your crypto assets in real yield. It also eliminates the risks associated with the possibility of a borrower defaulting on the loan (credit risk) or losing all your money (principal risk). So rest assured, from a product perspective, your money is safe. This does not mean that the protocol is completely risk free. We will find out about the risks associated with this later. But at least, Olive Finance is audited.
Olive also has a protocol token called Olive, issued by the Olive DAO. This token is both a utility token and a governance token.
btw, if you want to try olive, make sure you use my referral code, In this way, both you and I get a boost and a fee waiver.
DeFi Option Vault (DOV) is one of the ways to earn through crypto, and it works like this: Let’s keep some safe for. So here, your crypto is added to a vault, and these funds are used algorithmically in various options trading strategies to make you more money. Think of it as someone else managing your money for you but in this case, Olive is a decentralized asset management platform.
Olive has a DeFi options vault structure, and a simple one at that, and investors can deposit their assets into any strategy vault they like, and then, the auto-compounding smart contracts pick up from there.
Some olive vaults.
There are many strategies to choose from, including selling covered calls or covered puts – the easiest and most popular way to generate returns on Olive, using options.
Olive DOV allows you to earn returns regardless of the market. So it doesn’t really matter whether the market is stable, rising or falling.
The Principal Security Vault or PPV base on assets such as GLP, ETH, Matic, USDC, etc. can increase yield and investors are allowed to choose from a wide range of strategies that can be used to increase yield. For example GLP Vault will multiply your returns on GLP by ~1.5X without exposing your funds to principal and credit risks.
These strategies include Range Accrual, Twin-Win, Ascent, Summit, Digital, Highland etc. Only 2 of these strategies are popularly used.
range accrual strategy
This strategy allows the investor to earn returns if the underlying’s price remains within a pre-determined range during a specified observation time. Investors can earn yield only when the price stays within that range in a cycle. The cycle here is from Monday to Monday.
If for any reason the underlying price moves out of the range for more days/observations than it remains within the range of days/observations, the amplified return will depend on the number of days the price remains within the range. Worst case is that if the underlying price remains outside the range for all observations, your funds (principal) will not be affected as the base yield is prime Machine At work in this strategy.
twin win
It works quite differently from range accrual. This strategy allows the investor to profit from price movement in either direction. Investors can earn maximum returns only when the barriers (up and down barriers) are not violated. If the constraints are breached, the investor is compensated with base coupons.
I really like this strategy because it not only allows an investor to earn when the underlying price rises, but also when it declines as long as the pre-set limit is not breached. Even then, if the limit is breached, investors can still earn (guaranteed) basis coupons.
I think it’s a good deal. What do you say’?
Another cool thing about Olive is that you can refer your friends and earn up to $2m. I don’t know about you but this is a cool feature.
How is the APY for Olives calculated?
Olive’s APY is calculated by annualizing the average yield of the last 4 cycles, if the vault has a loss in any of those cycles, that particular cycle is not included in the APY calculation. I think this is a way to protect your earnings from loss.
Although there is no withdrawal fee on Olive, currently a management fee of 2% is charged on the allocated basis and a performance fee of 10% which is deducted only if the cycle brings profits (which is similar to Earnen Finance and Beefy) . I like it!
pros
- To start, double digit returns on USDC, ETH, MATIC, and WBTC 🤑
- There is no lock-in, so investors can make withdrawals anytime. There is no restriction on your holdings.
- There is no minimum deposit required to participate in Vaults. It doesn’t matter how much you are depositing.
- The yield component of your assets is used to drive your chosen strategies, and the yield from the previous cycle is used as the principal for the next cycle, therefore your funds are protected from principal and credit risks.
- Olive had investors like VC JumpCapital and Hashed. The team is also very strong.
risk
- We have already said that Olive bears neither principal risk nor credit risk. However there may be some volatility risk.
- It does not involve principal risk as the yield is used to generate additional returns in the vault and does not involve credit risk as the collateral you deposit is never lent out.
- However, Olive is susceptible to smart contract risk. There may be a risk of failure of the smart contract to work with the underlying vault or protocol, And let’s be honest, most, if not all, blockchain protocols are susceptible to smart contract risks., But that doesn’t mean we have to dismiss it. Olive Smart Contracts was audited by PeckShield and you can find the audit report here.
To conclude, as this is not financial advice I am not explicitly telling you what or where to invest, but if you feel trading crypto is not for you thing, So you can look into crypto-saving apps.
But be sure to do additional research and make sure you are really satisfied before investing your funds.
What do you guys think about olives? Is it worth it? Please let me know what you think.
If you’re interested in blockchain, crypto, NFTs, the metaverse, fintech, and DeFi, don’t forget to check out my highly-rated and super fun courses:
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Twitter: @henriquecentei
LinkedIn: Henrique Santiero
Source: medium.datadriveninvestor.com
