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Yield Farming in DeFi — the Evolution outcome of the Crypto Industry
Yield Farming (income farming) is one of the key trends actively developing in DeFi. Thanks to this earnings strategy, the Compound project has recently taken off, ranking first in terms of the number of user funds blocked in the protocol.
The Yield Farming investment strategy, or income pharming, is to generate income from the placement of cryptocurrencies on various DeFi-platforms for crypto-lending. Before Yield Farming, the main trend in DeFi was conventional cryptocurrency deposits, bringing in 4–10% returns. However, Yield Farming can generate up to 100% annualized income.
Yield Farming is the main driver of the DeFi sectorThe number of cryptocurrencies locked in DeFi (Total Value Locked — TVL) is now $2.29 billion. At the same time, over the past month, the capitalization of funds in DeFi has more than doubled, largely due to the popularity of income pharming. At the same time, the top five DeFi protocols attracted $2.1 billion in crypto assets, or 91.7% of the total TVL volume.
• Compound — $690.8 million
• MakerDAO — $644.7 million
• Synthetix — $396 million
• Aave — $192.4 million
• Balancer — $178.2 million
And the total number of users of these projects was about 230,000.
The sharp rise in interest in Yield Farming is associated with one of the new protocols on the market — Compound. Users of this platform can provide loans or take out loans in nine different cryptocurrencies, for which they receive COMP project tokens. With these tokens, Compund users can make decisions about its future development. In other words, conditional “shares” of the Compound project are distributed to those who provide liquidity to the platform, as well as to those who take loans on it. This largely corresponds to the concept of SAFG (“a simple agreement on the possibility of obtaining the right to control in the future”) as a logical development of other principles of distribution of tokens — SAFE and SAFT.
COMP for BATIssued daily at 2880 COMP, which is equivalent to $518,688 at a token price of $180.1. Half goes to liquidity providers, half to borrowers. At the same time, distribution is carried out to each of nine markets (BAT, ETH, USDC, USDT, Dai, REP, 0x and Sai) — to everyone who borrows or takes loans from Compound, in proportion to the interest rate, as well as to their payments for interest or income. The higher the rates for a loan or loan, the more COMP tokens are paid.
At the same time, Compound is constantly updating its token distribution rules. So, according to the latest update from July 2, COMP payments begin to be made based not on interest rates, but on the dollar value of the funds in the transaction. This should eventually lead to more use of stablecoins. For them, borrowing rates can be less than 1%, which is ten times less than for the most volatile asset in DeFi — the BAT token.
It is worth noting that until recently, Compound users received the maximum number of COMP tokens for transactions with BAT. As a result, for the period from June 19 to July 2, the volume of transactions with this asset reached $931 million, which exceeded the total turnover of Ethereum and DAI for the same period. However, another change in the rules sharply increased the volumes of DAI and USDC.
Yield Farming: Borrowing Is Better Than LendingThe changes did not affect the main advantage of Compound — the COMP tokens received by users still cover the cost of borrowing in cryptocurrencies. In other words, Compound users find it more profitable to borrow than borrow (as noted, for example, with the Tether stablecoin). Payments of COMP tokens to borrowers look like a cryptocurrency cashback for participation in the platform — this can be viewed as if, for example, American Express bank shared a small share in the share capital with users for each transaction.
This Compound policy has led to a sharp increase in loans, as well as increased income for those providing liquidity, as they also receive COMP tokens for participating in the platform. Moreover, this cashback is a plus to the interest earned on borrowed cryptocurrencies. Moreover, since borrowers receive payments on loans, liquidity providers can use their own assets to borrow more funds. As a result, their income increases and they again provide liquidity to Compound.
Not only CompoundCompound was not the only one that played an important role in popularizing Yield Farming. So, Aave makes it possible to borrow cryptocurrencies at a fixed rate, and then place them in order to generate income. Aave’s fixed rate is usually higher than Compound’s variable, which means Aave gives more income to those who provide crypto loans. There are also liquidity pools, such as Uniswap, which offer large returns (sometimes at 100% annualized rate), but with higher risks.
While the price of СOMP shows a clear downward trend (research of the Delta Exchange platform claims that this token is five times overvalued), Compound is overgrown with competitors. So, on June 22, the COMP token cost $327.82 (on the day of listing on Coinbase Pro, June 23, at the moment the cost even rose to $427), and on July 12 it was already $180.1. The fall of СOMP is noticeable, but it is worth noting that at the beginning of its emission the token cost only $16. Moreover, about 80% of COMP tokens are distributed among the top 10 addresses in Compound, and the volume of tokens in free circulation is $686 million, which corresponds to a free-float indicator of 38%. It is not high, and this will contribute to the strong volatility of COMP.
Against the background of a decrease in the cost of COMP, the Balancer platform, which provides crypto lending services from a pool of various ERC20 tokens, began distributing 145,000 native BAL tokens to liquidity providers every week. These tokens, like COMP, provide the right to participate in the management of the platform. Of the maximum possible issue of BAL 100 million, 65% will go towards payments.
Risks of Yield FarmingDespite the popularity of Yield Farming among DeFi players, this trend is not without its pitfalls. For example, Ethereum co-founder Vitalik Buterin continues to criticize DeFi, stating that “interest rates that are significantly higher than you can get when working in the field of traditional finance are either an opportunity for temporary arbitrage or are obtained at the expense of not publicly disclosed risks.”
Indeed, when using Yield Farming, the following risks should be borne in mind:
• Cryptocurrencies can be stolen from the platform they are hosted on.
• The participant may borrow too much funds in relation to the crypto deposit placed by him (trading with high leverage), as a result of which the collateral may be lost.
• The collapse of cryptocurrency rates. This factor can be realized if, for example, it turns out that some stablecoins in reality do not have the declared 1:1 collateral.
• The Compound platform will no longer reward borrowers and lenders with COMP tokens. According to the statements of the project team, the program will operate over the next four years — during this time 42% of the total token emission will be distributed. However, the site has the right to change the rules.
• Systemic risk, within which even small changes in the core principles of Yield Farming can provoke a very strong transformation of this strategy and affect its popularity.
• Scam tokens. Due to the simple asset listing system on the Uniswap site, assets such as a copy of the Balancer token, fake coins of the Curve Finance project, the DYDX token, which can be confused with dYdX, and the Uniswap Community Token, which is not related to the platform itself, appeared on it. As a result, the site issued a warning about an increase in the number of fake ERC20 tokens.
Yield Farming gives hope for the growth of cryptocurrency quotesBut how does Yield Farming affect the crypto market in general? Over the last week of June and the first ten days of July, an additional 2,430 bitcoins were added to Compound, in addition to the 170 already available at that time. The Balancer platform during the same time saw an influx of bitcoins from 126 to 1787. In total, for the implementation of Yield Farming, DeFi protocols are now more than 12,000 BTC. Potentially, an increase in the inflow of bitcoins into this sector of the cryptocurrency market can play a positive role in relation to the dynamics of the growth of quotations of the first cryptocurrency. After all, the growing popularity of Yield Farming supports interest in BTC, which is especially important given that in July, the turnover of this cryptocurrency trade fell by 31% compared to June.
Since most of the DeFi projects are based on the Ethereum blockchain and use the assets of this ecosystem, ether can potentially get an incentive for strong growth. Although the example of XRP and the development of innovations from Ripple shows that such market success is not guaranteed. It is also symbolic that the total capitalization of ERC20 tokens has reached $33 billion, exceeding the total capitalization of ether ($26.6 billion). Messari analyst Ryan Watkins, commenting on this data, said that ether has shown a very modest growth over the past two months, only 20%.
The continued growth in interest in stablecoins and the increase in trading volume with them is also driven by their popularity at Yield Farming. Along with this, stablecoins, which have long become a “bridge” between the world of classical finance and the cryptosphere, also contribute to the rapid emergence of various CBDCs on the market.
Yield Farming meets institutional investorsYield Farming has become a natural stage in the evolution of the cryptocurrency ecosystem. However, its further destiny, like all DeFi areas, is directly related to ensuring reliable cybersecurity. This is also important from the point of view of investors who invest in infrastructure: it’s a shame, for example, that the dForce platform faced the theft of $24 million in assets, having received $1.5 million in funding from investors a few days earlier.
In this connection, venture funds from Silicon Valley are being invested in the development of infrastructure for Yield Farming. So, ParaFi is investing $4.5 million in Aave, supporting a platform that offers instant cryptocurrency loans without collateral. These are high-risk transactions for the borrower, but it is important that Aave develops further. So, it has service integration with Uniswap. Moreover, Aave became the first DeFi protocol to work with the Tether stablecoin. Plus, the platform now offers a new product — credit delegation, when a depositor can lend their assets to a specific member of the platform in a collateral-free scheme. Both parties enter into a loan agreement, which, thanks to the integration of Aave with OpenLaw, allows such a contract to be securely stored on the blockchain. In fact, this is a real exit for DeFi with Yield Farming to the classic financial market, to work with institutional investors as well.
There is also a trend towards the integration of various platforms into DeFi, which thereby help each other grow. Thus, internal tokens and “synthetic” tokens (cTokens) Compound began to be used in Uniswap. And three projects at once — Synthetix, Curve and Ren — launched a joint pool providing liquidity in the form of tokenized bitcoins.
Also in a short period of time, insurance products targeted at Yield Farming members, such as Nexus Mutual, began to appear on the market. Now the Nexus Mutual team has insured assets in the amount of $8.5 million. Curve Finance is most interested in this opportunity ($1.6 million of assets are insured). Cryptocurrencies for an average of $700,000 are also insured on the Balancer, Compound, Aave and 1inch.exchange platforms.
Yield Farming, along with decentralized insurance products, confirms the opinion of analyst Chris Burniske, who emphasized that DeFi recreates all the elements that are found in classic finance, but on a new, innovative basis. So it cannot be said that Yield Farming is a short-term trend. This segment of the cryptosphere will continue to evolve despite the decline in net margin in it, as seen in the example of Compound.
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Can the early success of major crypto exchanges propel them to winning the broader consumer finance market?submitted by mickhagen to genesisblockhq [link] [comments]
This is the first part of Crypto Banking Wars — a new series that examines what crypto-native company is most likely to become the bank of the future. Who is best positioned to reach mainstream adoption in consumer finance?
While crypto allows the world to get rid of banks, a bank will still very much be necessary for this powerful technology to reach the masses. We believe a crypto-native company, like Genesis Block, will become the bank of the future.
In an earlier series, Crypto-Powered, we laid out arguments for why crypto-native companies have a huge edge in the market. When you consider both the broad spectrum of financial use-cases and the enormous value unlocked through these DeFi protocols, you can see just how big of an unfair advantage blockchain tech becomes for companies who truly understand and leverage it. Traditional banks and fintech unicorns simply won’t be able to keep up.
The power players of consumer finance in the 21st century will be crypto-native companies who build with blockchain technology at their core.The crypto landscape is still nascent. We’re still very much in the fragmented, unbundled phase of the industry lifecycle. Beyond what Genesis Block is doing, there are signs of other companies slowly starting to bundle financial services into what could be an all-in-one bank replacement.
So the key question that this series hopes to answer:
Which crypto-native company will successfully become the bank of the future?We obviously think Genesis Block is well-positioned to win. But we certainly aren’t the only game in town. In this series, we’ll be doing an analysis of who is most capable of thwarting our efforts. We’ll look at categories like crypto exchanges, crypto wallets, centralized lending & borrowing services, and crypto debit card companies. Each category will have its own dedicated post.
Today we’re analyzing big crypto exchanges. The two companies we’ll focus on today are Coinbase (biggest American exchange) and Binance (biggest global exchange). They are the top two exchanges in terms of Bitcoin trading volume. They are in pole position to winning this market — they have a huge existing userbase and strong financial resources.
Will Coinbase or Binance become the bank of the future? Can their early success propel them to winning the broader consumer finance market? Is their growth too far ahead for anyone else to catch up? Let’s dive in.
BinanceThe most formidable exchange on the global stage is Binance (Crunchbase). All signs suggest they have significantly more users and a stronger balance sheet than Coinbase. No other exchange is executing as aggressively and relentlessly as Binance is. The cadence at which they are shipping and launching new products is nothing short of impressive. As Tushar Jain from Multicoin argues, Binance is Blitzscaling.
Here are some of the products that they’ve launched in the last 18 months. Only a few are announced but still pre-launch.
Can they create a cohesive & united product experience?
Binance WeaknessesBinance is strong, but they do have a few major weaknesses that could slow them down.
Binance Wrap UpI don’t believe Binance is likely to succeed with a homegrown product aimed at the consumer finance market. Their current product — which is focused heavily on professional traders and speculators — is unlikely to become the bank of the future. If they wanted to enter the broader consumer market, I believe it’s much more likely that they will acquire a company that is getting early traction. They are not afraid to make acquisitions (Trust, JEX, WazirX, DappReview, BxB, CoinMarketCap, Swipe).
However, never count CZ out. He is a hustler. Binance is executing so aggressively and relentlessly that they will always be on the shortlist of major contenders.
CoinbaseThe crypto-native company that I believe is more likely to become the bank of the future is Coinbase (crunchbase). Their dominance in America could serve as a springboard to winning the West (Binance has a stronger foothold in Asia). Coinbase has more than 30M users. Their exchange business is a money-printing machine. They have a solid reputation as it relates to compliance and working with regulators. Their CEO is a longtime member of the crypto community. They are rumored to be going public soon.
Coinbase StrengthsLet’s look at what makes them strong and a likely contender for winning the broader consumer finance market.
Coinbase WeaknessesLet’s now look at some things that could hold them back.
Coinbase Wrap UpAt Genesis Block, we‘re proud to be working with Coinbase. They are a fantastic company. However, I don’t believe that they’ll succeed in building their own product for the broader consumer finance market. While they have incredible design, there are no signs that they are focused on or capable of internally building this type of product.
Similar to Binance, I think it’s far more likely that Coinbase acquires a promising young startup with strong growth.
Honorable MentionsOther US-based exchanges worth mentioning are Kraken, Gemini, and Bittrex. So far we’ve seen very few signs that any of them will aggressively attack broader consumer finance. Most are going in the way of Binance — listing more assets and adding more pro tools like margin and futures trading. And many, like Coinbase, are trying to attract more institutional customers. For example, Gemini with their custody product.
Wrap UpCoinbase and Binance have huge war chests and massive reach. For that alone, they should always be considered threats to Genesis Block. However, their products are very, very different than the product we’re building. And their approach is very different as well. They are trying to educate and onboard people into crypto. At Genesis Block, we believe the masses shouldn’t need to know or care about it. We did an entire series about this, Spreading Crypto.
Most everyone needs banking — whether it be to borrow, spend, invest, earn interest, etc. Not everyone needs a crypto exchange. For non-crypto consumers (the mass market), the differences between a bank and a crypto exchange are immense. Companies like Binance and Coinbase make a lot of money on their crypto exchange business. It would be really difficult, gutsy, and risky for any of them to completely change their narrative, messaging, and product to focus on the broader consumer market. I don’t believe they would ever risk biting the hand that feeds them.
In summary, as it relates to a digital bank aimed at the mass market, I believe both Coinbase and Binance are much more likely to acquire a startup in this space than they are to build it themselves. And I think they would want to keep the brand/product distinct and separate from their core crypto exchange business.
So back to the original question, is Coinbase and Binance a threat to Genesis Block? Not really. Not today. But they could be, and for that, we want to stay close to them.
Other Ways to Consume Today's Episode:
Download the app. We're a digital bank that's powered by crypto: https://genesisblock.com/download
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What are instant crypto exchanges?Even for veterans of the crypto industry, the role and functionality of instant crypto exchange may be unknown. You won't see Changelly, Shapeshift, and ChangeNOW on CoinMarketCap's top stock exchange list, and the name itself isn't particularly meaningful. What is an instant crypto exchange?
An instant crypto exchange is an exchange solution that typically aggregates prices and liquidity from multiple custody exchanges and offers a simple registration process with a simple exchange UX. This obviously differs significantly from custody exchanges such as Binance and OKEx, which protect your crypto, are limited to volume and prices on their exchange, offer lengthy login procedures and have a more professional trading interface.
Understand the benefits of instant crypto exchangeThe differences between instant and traditional exchanges don't make you inherently better than the others - they are made for different use cases. As you develop an understanding of instant crypto exchange, you can determine which solution best suits your needs. Here are some of the potential benefits of opting for an immediate crypto exchange:
Money storage - security
Perhaps the most basic way in which Instant Crypto Exchange differs from its more traditional counterparts is how funds are kept. Instant crypto exchanges receive and deposit money right in your wallet, which means you keep custody - unlike custody exchanges that keep your assets for you.
As you know, not your keys, not your coins. By instantly storing your funds, instant crypto exchange gives you more control and security. If you practice good operational security, which usually includes not keeping your money in an exchange, the likelihood that an attacker would like to have access to your wallet is relatively small compared to the massive honeypots of custody exchanges.
In 2019, there were 12 exchange hacks with stolen funds in excess of $ 290 million. By using an instant crypto exchange, you can avoid the risk of a centralized exchange hack without having to keep moving your money to and from an exchange.
It should be noted that instant exchanges use traditional portfolio exchanges to execute an order. This means that the funds involved in trading are temporarily held by the underlying exchange for the duration of a transaction.
Registrations and user interface - easy to use
If you don't have a preferred exchange yet, the sign-up and registration process is a factor to consider when choosing an exchange.
Many of the traditional exchanges have lengthy registration processes that include identity verification and long processing times. In contrast, with many instant crypto exchanges, you can only exchange crypto-to-crypto trading pairs with an email, a mobile app, or a wallet address.
For example, with Changelly, you need to use an email or social media page to sign up for your account. This process takes minutes before you can trade. Not surprisingly, if you want to trade fiat-to-crypto, Changelly requires you to go through a Know Your Customer process and connect your bank account. However, purchases under $ 150 can be made without KYC.
Once you are connected to an exchange, you will also notice a big difference between the user interface of the moment and the traditional one. Instant crypto exchanges feel more like modern finance apps than trading terminals. They are elegant, easy to use and extremely intuitive.
While this may seem minimalistic to an experienced trader, it is an extremely attractive option for those who just want to invest or make a single transaction. For comparison, power traders using options like Coinbase Pro see the following:
As can be clearly seen, a traditional crypto exchange has much more information that an experienced trader can process and process. For users who want a simple onboarding and trading experience, instant crypto exchange offers a much easier alternative.
Aggregation and fixed / variable interest rates - price
If you are familiar with traditional crypto exchanges, you will know why Coinbase Pro's user interface is so extensive in comparison: you need to know the price and depth of the order book to be able to process your trade. This order book depth is exchange-specific - it only contains the orders received by Coinbase. Instant crypto exchanges, on the other hand, aggregate prices and liquidity from multiple exchanges, meaning that you get access to the best prices that these multiple exchanges offer, with lower liquidity and less risk of slipping.
These two solutions differ in the actual order. A common traditional exchange order type is a limit that instructs the system to execute the buy or sell order when the price reaches or exceeds a certain limit. This gives traders more flexibility and control over their trades.
Immediate crypto exchanges also have an advantageous function when executing trades: fixed or variable interest rates. A floating rate is carried at the best possible price at the time of the transaction, which may be slightly above or below the listed price due to market volatility. A fixed interest rate blocks a certain interest rate and guarantees that trading is carried out at this price, which in turn can be above or below the variable interest rate depending on market volatility.
The disadvantages of instant crypto exchangeIt is clear that instant crypto exchange offers a number of advantages, but there are some notable disadvantages. Onboarding for an instant exchange is a quick and easy process, but requires the knowledge and use of a wallet.
For an inexperienced cryptocurrency user, the learning curve and responsibility for protecting your own crypto assets can prove to be an entry barrier. Users should do their research to understand exactly how wallets work, as lost money can usually not be recovered.
The use of wallets is the only place where an instant exchange actually requires more sophistication. Mostly, a more sophisticated approach accompanies traditional trading exchanges.
As with wallets and self-protection, however, greater sophistication can pay off. For custody exchanges, the sophistication of the interfaces described above offers extended trading options. These can be more sophisticated instruments such as derivatives, placing orders - such as stop limit orders - leverage and margin.
Finally, trading fees should be considered. Immediate crypto exchanges typically cost between 0.25 and 0.50%, while many traditional exchanges typically cost between 0.05 and 0.50%. Depending on your price sensitivity and the frequency of trading, a conventional exchange solution may make more sense.
So should you do your taxes? Well, yes. First of all, it’s the law to pay them and not following that law may get you in trouble. But secondly, you also want to know exactly, to the last sat, where you stand with your finances at any point in time – your gains, and your losses. You want to know how much you spend, where, how much you get, from whom, and how much money in fiat should you have ready for the tax time. And it’s far better to do this on a constant basis, than two days before you need it.submitted by CryptoHamstereu to u/CryptoHamstereu [link] [comments]
Luckily, the times are changing, and this change is the best seen by those connected to digital assets. With the general transfer of numerous businesses to the digital world, new tools are being created to accommodate the individual’s and business’s every need, and make the job at hand easier, in this case producing a tax report. Hence, a professional route is probably the best way to go, given that they will be familiarized with the tax law of your specific country/city. Additionally, contemporary tools and platforms are not only tax software, but portfolio trackers too, as they need the info to produce your report. They will help you import your data, calculate your taxes, and prepare your filing for you, delivering a full set of necessary documents. Additionally, you can often pay for a plan in crypto without giving out your real name anywhere in the signing-up process, which helps protect your identity and privacy.
We’ve used the digital market intelligence platform SimilarWeb to find the most popular crypto tax tools, and we focused on those below the global rank of 2 million. The the two most popular ones, had 364,000 and 70,000 visits in September respectively, while the visit numbers for other platforms were not available. There are also many other platforms out there for you to check out to find your best fit, such as Koinly.io, Cryptio.co, Bittax.com, or Bear.Tax. That said, these are the eight tools we found, presented in the order of their rank, starting with the most popular.
1. CoinTracking.infoCurrencies supported: All major fiat currencies and 7,016 coins and assets.Countries supported: Software is flexible enough to adjust to basically all countries.Exchanges supported: Direct imports from 52 exchanges and 8 wallets; also, legacy support for 16 closed exchanges.Price / year: Free, Pro - USD 117, Unlimited - USD 249.
CoinTracking is a comprehensive tool from Germany, which offers tax calculators for thousands of cryptocurrencies to people across the globe. It analyzes trades, produces real-time reports on gains and losses, and allows users to keep an eye on the value of their currencies on each exchange. Furthermore, users can calculate historical balances and profits, review realized and unrealized gains, and prepare trading and income data in order to generate tax reports. The dashboard provides an overview of a user’s portfolio, utilizing interactive charts and graphs showing various information, such as balance per day, or trades per month.
2. CoinTracker.ioCurrencies supported: 2,500 cryptocurrencies and 157 fiat currencies.Countries supported: Full support in the U.S., the U.K., Canada, Australia, and partial support for every other country (considered "partial" because it doesn't apply the nuances of local tax laws for each jurisdiction yet, but users from other countries can still get a transaction history CSV (a simple file format used to store tabular data) and capital gain CSV; more countries are in the plans for the full support).Exchanges supported: Direct import from 38 exchanges, and more than 300 others via a CSV upload.Price / tax year: Hobbyist - USD 49, Trader - USD 199, Pro - USD 499, Satoshi - USD 999.
CoinTracker is a crypto portfolio tracker and tax calculator, which offers portfolio management, tax calculation and optimization, trading, and payments. It is wallet and exchange agnostic and enables fee tracking and margin trading, among other things, while allowing users to review their tax summary and download the reports needed to file taxes – all available in a unified interface. Users’ asset balances and transactions from wallets and exchanges are automatically and continuously synced. This is done so that users can always have the latest information on the state of their assets. Additionally, you can use your Coinbase account to log in. CoinTracker is also integrated with TurboTax, a popular tax preparation software.
3. CryptoTrader.TaxCurrencies supported: More than 2,500 cryptocurrencies; capital gains / losses reporting for over 30 different fiat currencies.Countries supported: Specific tax forms for countries like U.S. and Australia also are supported, with Canada and U.K. tax forms expected to launch by the end of 2019, but anyone from around the world can use the platform to calculate their crypto gains and losses.Exchanges supported: Direct import from 30 exchanges, and more via a CSV upload.Price / tax season: Hobbyist - USD 49, Pro Trader - USD 99, High Volume Trader - USD 199, Unlimited - 299.
CryptoTrader.Tax utilizes the methods tax professionals use to calculate your tax liability and minimize it, and to make sure that the results are accurate. After you’ve logged in, you just need to connect your exchanges, import and define transactions (by an offered label) and import your trades from the exchanges/brokers, after which you can review your data. Then, your gains/losses and taxes will be calculated and your tax report ready for download in a short amount of time. Each tax report includes five documents: an income report, short and long term sales report, end of year positions report, IRS form 8949, and a full audit trail. You can file these yourself, send them to your accountant, or import them into TurboTax for e-filing.
Margin trading is available to both individual and institutional traders. For individuals to qualify for margin trading, they must live within one of the 23 states* where we currently offer the feature, have a valid Coinbase Pro account, and be active on Coinbase Pro, measured by recent trades, balances, and deposit and withdrawal activity**. Coinbase Pro is bringing in margin trading as one of its services as a response to several requests from many of its users. One of the many things that companies attempt to strive for is customer satisfaction. In an attempt to further its satisfaction rate in its clients, Coinbase Pro is bringing in margin trading as one of its services as a Margin trading is the practice of borrowing funds [from a lender] to trade. This is a form of “leveraged trading” that provides traders access to more buying power than the balance of their Coinbase accounts by using certain assets (currently only BTC, USD, and USDC) as collateral for loans. Coinbase has launched margin trading for users of its cryptocurrency trading platform, Coinbase Pro. Both individual and institutional investors in selected regions now have access to Coinbase Today, margin trading on Coinbase Pro provides up to 3x leverage, up to the line of credit granted to you. For example: for every $1 you put in, Coinbase gives $2 for a total of $3. If your line of credit is capped at $100, you may only borrow $100 even if 3x leverage is greater than $100.
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