How can one earn a FIXED passive income from owning Bitcoin?

How can one earn a FIXED passive income from owning Bitcoin?

In short, it’s currently not possible because YieldFort will only be launched in a few weeks. But the reality is that yes — the king of crypto is, in fact, bare. That is, the Bitcoin ecosystem is in an absolute embryonic state compared to Ethereum, and there aren’t many options for earning.

Currently, you can own or trade Bitcoin, but to simply earn a deposit with a fixed rate is not yet possible.

Yes, there are solutions on the market offering investment yield, but these solutions involve:

Firstly, converting Bitcoin into Wrapped Bitcoin on the ERC/BEP 20 network.

Secondly, you can only receive an annual percentage yield (this is not a fixed yield, but a dynamic one that changes several times a day).

The most “common” tools for earning yield from owning Bitcoin are the AAVE or Uniswap protocols, where you can deposit Wrapped Bitcoin on the Ethereum network for a dynamic annual percentage yield. At AAVE (https://aave.com/) it’s 0.15%, and at Uniswap (https://uniswap.org/) it’s 1.5%.

How do AAVE and Uniswap achieve this yield?

AAVE has an internal algorithm that, depending on demand and supply, calculates the rate on deposited assets based on the volume of deposited funds, the volume of funds attracted from the protocol, the attraction rate, and the market value of the asset. In other words, it is a kind of automated bank that analyses how much an asset is worth, how much of the asset has been borrowed and at what rate, and based on this, calculates the attraction rate.

Uniswap has a fundamentally different model. The idea is that anyone can be a liquidity provider and deposit their funds on Uniswap, which in turn uses them as liquidity for automated exchange.

How YieldFort is changing the rules of the game?

In the absence of a settled classical model of fixed income (loans, bonds), YieldFort has taken the route of structured products and creating synthetic fixed income through options. YieldFort uses Deribit and deltatheta options exchanges to place funds in structured products that provide a fixed yield.

The fixed income is tied to the Federal Reserve’s interest rate, i.e., a change in the Fed’s rate also changes the fixed income (just like a change in the Fed’s rate will affect the yield on a deposit in any bank).

There are two options for placing funds:

  1. Without capital protection, the rate is 5.5% per annum (Fed rate + 0.25%). You deposited 1 Bitcoin, and after 1 week you received 1 Bitcoin + 5.5% annual/52.
  2. With capital protection, the rate is -5.5% per annum. You deposited 1 Bitcoin (current price 30,000 USD), after 1 week suppose Bitcoin is worth 29,000. You received 1 Bitcoin — 5.5%/52 + 0.03446 Bitcoin for the week on your 1 Bitcoin. Here, 0.03446 Bitcoin represents a compensation payment to cover the exchange rate difference. Thus, protection means that if the Bitcoin exchange rate falls relative to USDT, you do not lose in dollar terms and increase the amount of BTC in your account.

There are only a few weeks left until the beta testing of YieldFort begins, so go to https://yieldfort.com/ and subscribe to our news! In addition to the announcement of the platform’s launch, there will be plenty of useful and important information for any cryptocurrency user.