<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/05/Discussing_the_ways_to_overcome_the_difficulties_of_advertising-1024x576.jpg" alt="" class="wp-image-1294" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/05/Discussing_the_ways_to_overcome_the_difficulties_of_advertising-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/05/Discussing_the_ways_to_overcome_the_difficulties_of_advertising-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/05/Discussing_the_ways_to_overcome_the_difficulties_of_advertising-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/05/Discussing_the_ways_to_overcome_the_difficulties_of_advertising.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



Facebook has a tumultuous history of relations with crypto and blockchain technology. They have previously made declarations explicitly forbidding companies from running crypto-related advertisements on Facebook and Instagram. But other times, they&#8217;ve asserted that the restriction didn&#8217;t actually happen and that entrepreneurs shouldn&#8217;t be concerned about it. Facebook even went so far as to launch &#8220;Libra&#8221;, its own crypto project. Many companies are unsure if it is viable to promote cryptocurrencies on Facebook due to all the previous unclear replies.



<h2 class="wp-block-heading">Are there any ways to promote cryptocurrencies on Facebook?</h2>







The answer to the issue concerning whether there are any opportunities to promote your crypto on Facebook is, like many other questions in this area, &#8220;it depends&#8221;. It is unclear what Facebook&#8217;s official position is on cryptocurrencies and blockchain. In just a few years, the company has evolved from publicly denouncing Facebook as a risky tool for money laundering to the idea of developing their own cryptocurrency, called &#8220;Libra&#8221;. Facebook appears to have reverted to its prior position: &#8220;Crypto is something bad,&#8221; following a long period of regulatory opposition concerning the &#8216;Libra&#8217; project. Facebook argues that its actual advertising policy does not explicitly prohibit blockchain project advertisements, but in most cases, permission is required.



What specialists advise.



According to the data that FB made publicly available, it&#8217;s reasonable to believe that the majority of blockchain projects that are not hosting an ICO or providing something dubious shouldn&#8217;t have any issues. But pioneers in this area have the opposite opinion.



They assert that FB&#8217;s advertising policy, which is posted on their website, is mostly a PR ploy. Over the years, they worked on a tonne of fantastic blockchain campaigns, and not a single rejection from FB was received. They succeeded in getting a campaign authorized, but it was quickly taken down every time. In addition, used accounts were permanently banned.



It is also important to mention that none of the projects that have been turned down have broken FB&#8217;s guidelines for crypto advertising.



<h2 class="wp-block-heading">Is it possible to promote crypto on Instagram?</h2>



Instagram, which is owned by FB, has an identical position on cryptocurrency advertisements. CoinTracker, a provider of software that can help you work with portfolios and collect data for tax reporting on crypto, is one that, for a brief period of time, was successful in getting crypto adverts on Instagram. From this perspective it seems that the majority of companies shouldn&#8217;t rely on this platform to advertise their products.



Entrepreneurs and companies are searching for alternative strategies to increase recognition and to attract new users now that advertising giants like FB and Instagram are essentially out of the picture. The following are some of the possible options:



Firs one in our list is Twitter.



This platforms guidelines for advertisement have recently become more flexible. It continues to be a feasible alternative for cryptocurrency advertisers trying to increase their company&#8217;s visibility through a programatic platform.



Google.



It is another Pay Per Click advertising choice for cryptocurrency businesses. Although, account suspensions are uncommon, and ad variations are infrequently restricted, Google Ads still offers the possibility of generating a positive ROAS.



Promotion with the help of influencers. Such a marketing approach is deemed one of the most preferred methods in this area since it enables companies to avoid the requirement for ad approval from social platforms like FB and Instagram.



SEO



This approach is another highly common area of attention for marketers involved in crypto promotion. Since SEO enables organic and consistent traffic and doesn&#8217;t require approval from any of the previously mentioned platforms.



How about display ads?



Such advertisements may be run on multiple publishers&#8217; and news websites with CPM rates comparable to Google ads.

AlphaGuilty

Discussing the ways to overcome the difficulties of advertising crypto on Facebook and Instagram.

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/05/Ways_of_using_widely_spread_social_networks_like_TikTok_for_crypto-1024x576.jpg" alt="" class="wp-image-1288" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/05/Ways_of_using_widely_spread_social_networks_like_TikTok_for_crypto-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/05/Ways_of_using_widely_spread_social_networks_like_TikTok_for_crypto-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/05/Ways_of_using_widely_spread_social_networks_like_TikTok_for_crypto-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/05/Ways_of_using_widely_spread_social_networks_like_TikTok_for_crypto.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



As you may know, one of the most popular kinds of investment today is crypto. Owners of cryptocurrencies are lobbying for the adoption of it as a widely accepted currency to exchange. Not everybody agrees with this, though. The fact that TikTok previously prohibited any materials relating to crypto makes this especially clear. Thus, their late news are intriguing. Programmers in TikTok are developing software that will enable cryptocurrency-related companies to place advertisements in their app. Although there may be limitations, it seems to be a significant development for Crypto promotion on TikTok.



In the United States and Canada, TikTok is now testing a new soft. It permits companies related to crypto that are accredited by a recognized regulatory body to promote crypto to all those using TikTok who are at least eighteen years old. Licensed enterprises can post advertisements for their products on TikTok and encourage cryptocurrency investment. There&#8217;s plenty of caution taken in these sorts of advertising because this type of currency is still so new and unstable. Companies are not permitted to run sponsored commercials, according to a TikTok PR representative, but they are still able to share organic materials regarding crypto on their feeds. The platform is currently attempting to alter this.



<h2 class="wp-block-heading">Why is this crucial?</h2>



We stated that TikTok had restricted any cryptocurrency-related material in 2021. They still haven&#8217;t let sponsored adverts for cryptocurrencies, even though it was clear that the restrictions on non-paid material were interim. But there is a known fact that there were companies that managed to effectively run sponsored ads prior to the prohibition. An adviser at &#8220;Lolli&#8221;, a browser addon that gives cash backs in BTC, shared that they managed to post several adverts in 2021 but then suddenly failed to be allowed.



An organization may suffer significantly if it loses all of its access to an infrastructure that is important to its marketing and advertising plans. This is why TikTok&#8217;s new program represents a significant advance for the industry.&nbsp;



Due to their constraints, cryptocurrency businesses that wish to have ads on TikTok must take the necessary action to guarantee that they are subject to the appropriate regulations.



Furthermore, thanks to the fact that these advertisements may be viewed by individuals eighteen and older, we can be confident that only reliable cryptocurrency companies have the right to advertise to people who are capable of making wise financial decisions.



<h2 class="wp-block-heading">Next let&#8217;s discuss some ways of advertising on TikTok platform.</h2>



Whether you&#8217;re handling a marketing campaign or not, you&#8217;re certainly searching for some possible ways to distinguish your brand from that of many other players in the area. Because of this, internet marketing for your company becomes even more crucial. However, the current beta program is restricted to several companies. Although the test period has no specified date of ending, if it is implemented, any company that is controlled by the authorized institution might be permitted to display sponsored advertisements. But we may talk about methods to produce organic content. Let&#8217;s go through some.



Distribute educational material. Considering how young this industry is, many people are unaware of how it functions. You may engage plenty of newcomers and introduce them to your business by providing them with helpful information and some fundamentals for beginners. Make every effort to simplify this complicated subject. In this manner, those who are unfamiliar with crypto may join in and, ideally, end up becoming your customers.



Use&nbsp;humorous materials. Have some&nbsp;fun while&nbsp;creating your material. There is still opportunity for humor even though the subject is&nbsp;serious—as you remember, we are speaking about investments.



Provide some interesting tips. There are a lot of possible tips available, including what to buy right away, what to dispose of, and what to keep, or they may contain some brief descriptions of some branches of the crypto market like <a href="https://alphaguilty.io/blog/what-is-nft-staking-and-how-to-earn-with-nft" target="_blank" rel="noreferrer noopener">NFT</a>, <a href="https://alphaguilty.io/blog/how-to-create-a-crypto-token">tokens</a>, etc. You may share these short videos with your audience in order to assist them in staying up-to-date on what&#8217;s trending. As people search for their next significant financial move, viewers will probably find these sorts of videos to be fascinating.



Remember to make use of the tools like link-in-bio. The ability to connect to pages from videos is provided by this tool, which enables businesses to build a small landing page that includes multiple external links. Depending on the tool you use, your landing page may look very different. Some let you make a grid where every video points to a different page, whereas others let you create a list of links. Make smart use of this by including links to your services page, website, registration forms, blog pages, and others.



Collaborate with media influencing people of this area. One of the winning strategies is to make a collaboration involving some famous influencers and obtain a guarantee that your videos are not taken down for &#8220;community guidelines violation&#8221;. Choose those who support the same cryptos that your company promotes, and collaborate with them to produce joint material.

Ways of using widely spread social networks like TikTok for crypto promotion.

With the launch of the AlphaGuilty Ambassador Program, we are taking a significant step forward in building a strong community of users that are passionate about our project&#8217;s mission and goals.



The Ambassador Program is designed to provide an opportunity for passionate individuals to work closely with our project and become a part of our growing community. Ambassadors will be tasked with helping us to create unique content, promote our project, share knowledge about our platform, and provide valuable feedback based on user needs to help shape our project&#8217;s direction. In return, ambassadors will receive various rewards for their contributions and maybe even full-time jobs.



Our goals with the Ambassador Program are to drive organic community growth. We aim to move from a centralized model to a decentralized one where the power users become our evangelists. We also want to increase brand awareness with ambassador outreach and drive new users and clients to AlphaQuest.



The Ambassador Program has specific criteria for selecting its ambassadors, such as passion to create quality content for the crypto industry, strong&nbsp; communication skills, an active social media presence, and a strong understanding of AlphaGuilty products, mission, and goals. Additional qualifications such as contacts in different crypto project communities, experience in community management, and influencer marketing are optional but can be an added advantage.



There will be three directions to manage the Ambassador Program: Marketing, Product, and Bisdev. The Marketing ambassadors will be responsible for building and managing the project&#8217;s community, creating a lot of content aimed at retention and growth of our community, and working closely with our team. The Product ambassadors will take the lead in supporting our diverse international and multilingual community by facilitating translations of official AlphaGuilty information, creating new chats, organizing language-specific AMAs, video content, and community events. The Bisdev ambassadors will reach out to crypto projects with an offer to be listed in AlphaQuest managed by the business development department.



Ambassadors will be asked to provide feedback and suggestions to our team on how to improve the project. They will be expected to communicate the concerns and needs of the community back to us to help shape the platform&#8217;s direction.



Ambassadors will receive USDT (tokens) as a reward for their contributions to the project or equivalent in AQ tokens, along with other rewards such as project-branded swag, NFTs, and early access to information.&nbsp;



Here is some examples of our tasks for ambassadors with rewards:&nbsp;



<ul>
<li>Create an article on how to earn in WEB 3.0 &#8211; 15-25 USDT or AQ token equivalent</li>



<li>Topic-specific Podcast episode w/guests &#8211; 50 USDT or AG token equivalent</li>



<li>Сreate a meme about AlphaGuilty/AlphaQuest &#8211; 5 USDT or AG token equivalent&nbsp;</li>



<li>AMA/twitter space Organization &#8211; 75 USDT or AG token equivalent&nbsp;</li>



<li>Translate article on your language &#8211; 10 USDT or AG token equivalent</li>



<li>Specific Twitter post &#8211; 5 USDT or AG token equivalent</li>
</ul>



 In our Notion, you can see the entire list of tasks and rewards for them &#8211; <a href="https://alpha-guilty.notion.site/b02900baf0634685b0762e1af17f46f3?v=35a941305cda4205bfcd71866f3d6048" target="_blank" rel="noreferrer noopener">Notion</a>.



All tasks will be updated once a month. We also plan to listen to the feedback from the Ambassadors and adjust tasks based on their feedback.



To apply for participation in the Ambassador Program fill out this <a href="https://forms.gle/L1R9FCuJZWVRoDNe8" target="_blank" rel="noreferrer noopener">form</a>.



In conclusion, the AlphaGuilty Ambassador Program is an excellent opportunity for individuals passionate about the crypto industry to be a part of a growing community and help shape the direction of our platform. We believe that our ambassadors will play a significant role in driving organic community growth and increasing brand awareness. Together, we can build a strong community of users that believe in our mission and goals.

The AlphaGuilty Ambassador Program: Building a Community Together

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Top-DeFi-companies-to-watch-in-2023-1024x576.jpg" alt="" class="wp-image-1194" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Top-DeFi-companies-to-watch-in-2023-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Top-DeFi-companies-to-watch-in-2023-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Top-DeFi-companies-to-watch-in-2023-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Top-DeFi-companies-to-watch-in-2023.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



Today, crypto has fundamentally changed the perception of the value of fiat money and created significant competition for standard payment systems. Until recently, earning money from digital assets was limited to a few areas: trading, investing in potentially profitable projects, participating in airdrops, and the classic &#8220;buy and hold&#8221;. Despite the innovation and clear superiority of crypto over fiat, many aspects of the classic financial system were still missing.



So, a robust technological ecosystem is essential for the full development of the cryptocurrency economy and its various elements. Currently, decentralized finance is driving the discovery of innovative solutions and the recreation of traditional financial models without relying on a third party.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="960" height="640" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-31.png" alt="" class="wp-image-1193" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-31.png 960w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-31-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-31-768x512.png 768w" sizes="(max-width: 960px) 100vw, 960px" /></figure>



This material aims to highlight the top DeFi companies and stocks to watch this year, while also providing an overview of why the DeFi ecosystem is rapidly growing within the crypto industry.



<h2 class="wp-block-heading">What is decentralized finance?</h2>



Now decentralized finance refers to an ecosystem of DeFi applications developed on various blockchains. The most popular DeFi projects are created on the ETH blockchain. There are also systems on BTC based on Rootstock (smart contracts in the Bitcoin network). The goal of decentralized finance is to move the existing financial system to blockchains, making it accessible and open to the world. To help newcomers get up to speed, let&#8217;s review the basics:



<ul>
<li>Decentralized finances goal is to bring together all the benefits of the existing system (in the form of interest rates on deposits, lending opportunities, and insurance) while replacing various agents and intermediaries with smart contracts.</li>



<li>DeFi is distinguished from the ordinary system by greater efficiency, availability, and transparency. For example, DeFi projects offer the possibility of P2P lending, where a person from anywhere in the world can take out a loan or deposit existing assets.</li>



<li>The efficiency of these projects is that they eliminate brokers from their routine work. The work of the banker or insurer in the decentralized system is done by a smart contract, which resolves possible disputes.</li>
</ul>



So the guarantor of reliability is the blockchain on which this or that project is built (as we mentioned above, it is mostly ETH blockchain). All relationships here are built and regulated by smart contracts, and this is incredibly convenient.



A DeFi wallet is a digital wallet that allows users to store, send, and receive various digital assets used in decentralized finance protocols.



<h3 class="wp-block-heading">Use of smart contracts</h3>



In the past, if you wanted to make a deal with a person whose integrity you were not sure of, the only way out was to find a broker who could protect you with his authority, for a fee, of course. Today, everything is much simpler.&nbsp;



So, smart contracts are self-executing digital contracts built on blockchain technology. They are essentially programs that automatically execute the terms when certain pre-defined conditions are met. Such contracts are a key component of Web3 because they enable trustless and decentralized transactions between parties without the need for brokers.



Today, Web3 represents a new era of the Internet that is more transparent, and user-owned. It is also built on blockchain, which enables secure and tamper-proof transactions without the need for mediators such as banks or other institutions. This has the potential to democratize access to various services and create new models of governance and social organization. Current projects are developing in several directions:



<ul>
<li>Decentralized exchanges.</li>



<li>Special platforms, one part of which specializes in lending, the other in providing interest income from deposits.</li>



<li>Platforms for risk management (an alternative to insurance).</li>



<li>Platforms for the creation, management, and trading of derivatives, where the basic instruments are tokens.</li>
</ul>



In addition, most projects publish everything from capitalization and collateral to transaction lists.



<h2 class="wp-block-heading">What is the distinction between crypto and DeFi?</h2>



Crypto/DeFi are related concepts, but they are not the same. For example, the first term refers to any digital asset designed to be used as a medium of exchange, store of value, or unit of account. Crypto is based on technology that enables secure and transparent transactions without the need for middle parties.



DeFi, on the other hand, specifically refers to decentralized financial apps based on the same technology. These applications are designed to be accessible to anyone with an Internet connection and are often built on top of existing networks. This category also includes decentralized exchanges, lending and borrowing platforms, and other tools that allow users to interact with each other in a decentralized way.



So while crypto refers to a broad category of digital assets that include tokens and coins, DeFi is specific to the system that focuses on building decentralized applications.



<h3 class="wp-block-heading">Is DeFi the best solution?</h3>



DeFi Web3 projects expand opportunities for crypto enthusiasts by offering new models and ways to make money from their assets. Among the new opportunities is the ability of a digital currency to multiply just by having it. We&#8217;re talking about Proof of Stake and other passive income options.



For example, liquidity pools. It could be said that liquidity pools are locked tokens that facilitate efficient asset trading and allow investors to generate income from crypto ownership. Also, a liquidity pool is an automated market maker that provides liquidity to prevent significant fluctuations in asset prices. AMM is an innovation that allows trading without the need for order books.



We should also mention the possibility of obtaining passive income through Proof of Stake. Crypto staking is a process by which owners of certain assets can receive rewards for keeping their coins in a wallet. With Proof of Stake, an investor earns profit simply by storing tokens in the wallet or on a special platform for a contractually agreed time. Thus, the Proof of Stake algorithm appears to be an alternative to simply holding assets in a wallet, which is analogous to a bank deposit in the crypto industry.



But DeFi is still a relatively new technology, and there are several risks associated with it. For example, smart contract vulnerabilities can lead to hacks and other transaction security issues. Also, the regulatory environment for DeFi is still evolving. Whether this is the best solution depends on the specific use case and individual risk tolerance. While it has the potential to create a more accessible system, it is important to thoroughly understand the potential drawbacks.



<h2 class="wp-block-heading">What are the top DeFi stocks to watch this year?</h2>



In this article, we&#8217;ll provide a summary of some of the most promising DeFi stocks to watch in 2023. We&#8217;ll also evaluate the potential for both short-term and long-term investment, taking into account current market conditions:



<ul>
<li>MATIC, the token that powers Polygon, is a leading scaling platform for Ethereum&#8217;s dApps and a major driver of the ecosystem. With a current price between $1.20 and $2, MATIC is an affordable option for investors interested in short-term or long-term positions, depending on their investment strategies.</li>



<li>CoinBase remains one of the most popular and talked about public companies in the DeFi space, as it continues to dominate as one of the leading exchanges. Given the high volatility of both COIN and the broader crypto industry, investors may want to consider short-term strategies for the coming months of 2023.</li>



<li>The price movement of RIOT is closely tied to that of Bitcoin, providing traders with valuable insight into market patterns and helping them determine their short-term options. Although RIOT is an attractive option for investors, it is high-risk and may not be suitable for long-term investment.</li>



<li>For traders and investors looking to diversify their stock portfolio, Canaan Inc. could be a potential competitor to RIOT. With a 52-week range of $3.50 to $39.10, Canaan Inc. may be an attractive option for day or swing traders who are willing to monitor the stock closely and manage its risk profile.</li>
</ul>



As with any emerging vertical or sub-vertical in the financial markets, only time will tell which companies (and currencies) will emerge as leaders in both the short and long term.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="960" height="640" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-30.png" alt="" class="wp-image-1192" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-30.png 960w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-30-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-30-768x512.png 768w" sizes="(max-width: 960px) 100vw, 960px" /></figure>



<h2 class="wp-block-heading">Top DeFi development companies to watch in 2023</h2>



Here are some of the top companies leading the way in the DeFi space:



<ul>
<li>Uniswap allows users to exchange tokens without the need for an order book or centralized authority. It is known for its user-friendly interface and low fees, making it a popular choice for traders.</li>



<li>Aave is a lending platform that allows users to lend, borrow and earn interest on a variety of crypto. It is known for its innovative flash loan feature, which enables users to borrow funds without collateral.</li>



<li>GMX is a derivatives platform that operates across multiple chains, including Avalanche, Arbitrum, and BNB Chain, offering users the ability to trade futures, perpetual, and options with up to 25x leverage. The platform boasts over $400 million in TVL and offers over 20 trading pairs.</li>



<li>MakerDAO is an autonomous organization that operates the Maker protocol, a platform for creating and managing the Dai stablecoin. Dai is widely used in the DeFi space for trading, lending, and other financial apps.</li>
</ul>



So, DeFi represents an emerging segment of the crypto industry that has the potential to transform the way we access and use financial services. Today, DeFi protocols offer several benefits, including higher returns, greater security, increased accessibility, and novel investment opportunities.

DeFi companies

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-to-accept-crypto-payments-and-benefit-your-business-1024x576.jpg" alt="" class="wp-image-1189" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-to-accept-crypto-payments-and-benefit-your-business-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-to-accept-crypto-payments-and-benefit-your-business-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-to-accept-crypto-payments-and-benefit-your-business-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-to-accept-crypto-payments-and-benefit-your-business.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



In today&#8217;s world, more and more different organizations and companies are choosing to accept Bitcoin and other cryptos as payment methods for goods/services. The speed in the growth of digital assets and the expansion in the use of blockchain has caused a revolution in financial technology. In fact, this is a new phase in online payments.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="960" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-29.png" alt="" class="wp-image-1188" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-29.png 960w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-29-300x180.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-29-768x461.png 768w" sizes="(max-width: 960px) 100vw, 960px" /></figure>



So, crypto payments can be particularly attractive to merchants who are considered high-risk and have been rejected by traditional payment processors. By using crypto payments, these businesses can avoid the strict regulations and restrictions imposed by some processors and take advantage of the decentralized and global nature of digital currencies.



Now we will tell you how to accept Bitcoin and other crypto payments and what benefits you get from it. This info will be helpful to both current entrepreneurs and people who just want to start their businesses.



<h2 class="wp-block-heading">How can cryptocurrency payment options benefit my business?</h2>



Of course, you need to accept crypto payments because this is a promising direction. First of all, it is an opportunity to offer customers more payment options and to attract a new target group. Today, many people have crypto wallets and prefer to pay only in digital currency. It is no longer possible to ignore such customers because they are growing in number and they own promising assets.



So, accepting crypto payments bring many benefits to your business, including reducing transaction processing costs, lowering the risk of chargebacks, expanding your customer base, and meeting the preferences of modern consumers. Let&#8217;s take a deeper look at the advantages you receive:



<ul>
<li>These transactions typically have lower processing fees than traditional methods such as credit cards/bank transfers. With crypto payments, you can save on transaction costs and increase your profit margins.</li>



<li>Chargebacks occur when a customer disputes a transaction and requests a refund from the bank or credit card company. Crypto payments are non-reversible, meaning that once a payment is confirmed, it cannot be reversed or returned. This eliminates the risk of fraudulent chargebacks and helps protect your company from financial loss.</li>



<li>Thanks to crypto payments, you tap into a growing market of tech-savvy clients who prefer to use digital currencies. This expands your customer base and increases revenue opportunities.</li>



<li>Digital assets are borderless and can be used for international commerce without the need for currency conversions/bank transfers. With a crypto payment processor, you serve customers from different parts of the world and expand your global business.</li>



<li>All operations with digital currency are highly secure and private. They are based on technology that uses advanced cryptography to protect user data and transactions. Just accept crypto payments as a business owner and increase your customers&#8217; trust in a company and help protect their personal info.</li>
</ul>



Don&#8217;t forget that coins/tokens can easily be converted into fiat or stored in a crypto wallet, as rising demand and exchange rates make this currency a promising investment.



<h2 class="wp-block-heading">How do you buy/pay with cryptocurrency?</h2>



To facilitate paying, a crypto payment processor acts as an intermediary between the sender and receiver. It&#8217;s usually operated by a company or exchange, and it helps businesses get paid in crypto in a much easier way. It&#8217;s not as complicated as it may seem at first glance. Here are some recommendations for those who want to accept crypto payments:



<ul>
<li>Several processors allow you to accept crypto payments, such as Coinbase Commerce, BitPay, and CoinPayments. Pick the one that best suits your needs.</li>



<li>To receive digital assets, you must have a wallet that is compatible with the payment processor you select.</li>



<li>Then you need to configure these methods on your website or platform. This typically involves adding a &#8220;Pay with Cryptocurrency&#8221; option or a QR code that users can scan.</li>



<li>Be sure to provide clear and concise instructions on how customers can make purchases using crypto, including the coins/tokens they can use.</li>



<li>Track all incoming orders and ensure they are processed correctly. Most providers offer real-time monitoring and reporting features.</li>
</ul>



You can use a processor that automatically converts crypto payments on your website to a preferred currency. Alternatively, you can manually convert digital assets to fiat using an exchange.



The digital currency market has a huge number of asset types. Of course, the site owner should only rely on the most popular options. For this purpose, you can use any international rating relevant to the current year. Bitcoin is the main option that will always be up-to-date. These coins occupy a leading position on the market, and the rapidly increasing rate is due to the growing demand and limited amount of the asset.



<h3 class="wp-block-heading">Reasons to accept Bitcoin and other crypto payments as a business owner</h3>



Above we have already considered all the advantages for people who want to accept crypto payments. So, Bitcoin payments provide businesses with lower commissions, global accessibility, increased security, and showcasing innovation in your company. You can get paid instantly and from anywhere and embrace new, wealthier clients.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="960" height="640" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image.jpeg" alt="" class="wp-image-1186" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image.jpeg 960w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-300x200.jpeg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-768x512.jpeg 768w" sizes="(max-width: 960px) 100vw, 960px" /></figure>



<h2 class="wp-block-heading">What are the drawbacks of accepting Bitcoin on my website?</h2>



The advantages are many, but the drawbacks must also be considered. The most important is volatility, as it is almost impossible to buy and sell BTC at the same price. By allowing buyers to pay in digital assets, sellers run the risk of receiving less than they intended. The buyer is unlikely to be willing to part with the coin, which can increase in value significantly in a few days.



What other drawbacks should you consider when deciding to accept crypto payments today? Setting up and integrating Bitcoin purchases into a website or point-of-sale system requires technical knowledge and expertise, which can be a challenge for some businesses. In addition, the legal and regulatory landscape surrounding coins/tokens is still evolving. There is some uncertainty as to how governments may regulate or tax cryptocurrency operations in the future.Don&#8217;t forget that the scalability issue is still unresolved. The speed of cryptocurrency systems is still lagging behind their fiat counterparts. For example, Bitcoin requires significant computing power to verify and process on the network, which slows down the speed of transactions.

How to accept crypto payments

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-info-about-DeFi-liquidity-pools-1024x576.jpg" alt="" class="wp-image-1183" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-info-about-DeFi-liquidity-pools-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-info-about-DeFi-liquidity-pools-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-info-about-DeFi-liquidity-pools-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-info-about-DeFi-liquidity-pools.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



Today decentralized finance activities such as lending, borrowing, or exchanging tokens rely on smart contracts. These smart contracts allow users to freeze crypto into liquidity pools that are available for other people to use.&nbsp;



So, liquidity pools are a unique innovation of the crypto industry and have no direct equivalent in traditional finance. They serve as a vital resource for the core activities of a decentralized finance protocol and also attract investors looking for high-return opportunities. But what exactly are liquidity pools and why are they so important to the DeFi ecosystem? In this material, we will explore the concept of liquidity pools, how they work, and why they play a critical role in the DeFi field.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="960" height="638" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-27.png" alt="" class="wp-image-1182" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-27.png 960w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-27-300x199.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-27-768x510.png 768w" sizes="(max-width: 960px) 100vw, 960px" /></figure>



<h2 class="wp-block-heading">Why are liquidity pools important in DeFi?</h2>



Now DeFi provides financial services typically limited to centralized exchanges, such as trading, lending, and more, but in a completely transparent and safe way. To achieve this, DeFi applications rely heavily on the technology of liquidity pools. In DeFi, this is a critical factor as it facilitates the smooth functioning of the exchange and allows traders to enter and exit positions with minimal slippage.&nbsp;



DeFi liquidity refers to the availability of funds on a decentralized exchange that can be easily bought, or sold without significantly affecting the market cost. DeFi liquidity to a pool is typically supplied by liquidity providers who invest their digital currency in a pool, which is then used to facilitate operations on the exchange. In return, liquidity providers receive a share of the trading fees. The more liquidity available on an exchange, the easier it is to execute trades.



Essentially, a liquidity pool is a set of tokens frozen into a smart contract. Also, liquidity pools are smart contracts implemented in the network. When users invest their assets into a liquidity pool, they interact with the smart contract to get LP tokens.



<h2 class="wp-block-heading">How do liquidity pools work?</h2>



So, liquidity pools are one of the fundamental technologies in the DeFi environment. They are used by AMMs, liquidity mining, farming, and many other areas. In other words, any practice that requires immediate access to funding without counterparty involvement. Let&#8217;s take a closer look at how the liquidity pool works:



<ul>
<li>The pool consists of two types of tokens, which allows for the creation of a new market for the exchange of crypto. The coins can be of any type, but most often there is an ETH or BTC in the pair, which is countered by another digital currency.</li>



<li>When creating a new pool, the first liquidity provider determines the starting exchange rate of tokens within the created system. Each of the participants must deposit an equal amount of tokens of both types.</li>



<li>If there is a large price difference within the pool compared to global trends, arbitrage is possible. Providers then risk losing all of their invested capital. Maintaining the balance between coins is one of the main conditions of the system.</li>



<li>Each user will receive LP tokens based on the amount of funding provided, which will be credited to the user after the transfer of currency. All investors participate in coin giveaways, which are a commission of the decentralized exchange.</li>



<li>When a user wishes to withdraw funds from the pool, he/she will need to burn the existing LP tokens issued during the transfer of assets.</li>
</ul>



Above we mentioned the term AMM or Automatic Market Maker. This is a mechanism that allows each exchange of crypto passing through the pool to change the cost according to the work of a special algorithm. The AMM system in each pool is different as the market maker is modified and improved. AMMs also allow traders to make deals not with each other, but directly with a smart contract.



Having a large number of assets reduces the impact of operations on the exchange rate. This is the ultimate goal of market participants and liquidity providers. Today liquidity pools make it possible to eliminate the use of order books and to distribute all the profits from the operation of a marketplace among the depositors. They have already gained a foothold in the world of trading and decentralized exchanges, providing new opportunities for the development of markets.



In addition, because liquidity pools are self-contained, decentralized exchanges don&#8217;t require special books, which helps reduce the risk of front-running and other types of market manipulation.



<h3 class="wp-block-heading">Why is low liquidity a challenge?</h3>



Now low liquidity is a challenge because it can lead to some problems in the operation of a pool. For traders, it can result in high slippage, making it difficult to execute trades at the desired price. This can lead to higher commissions and reduced profitability.



<h2 class="wp-block-heading">Are DeFi liquidity pools safe?</h2>



This is one of the main questions that interest those who want to provide liquidity to the pool. Such pools in DeFi are generally considered safe, but there are some risks associated with participating for the purpose to provide liquidity.



One of the main problems is impermanent loss. This is a phenomenon that can occur in pools where users who provide liquidity may experience a temporary loss of value due to changes in the relative prices of the assets. This factor is the main obstacle to decentralized exchanges becoming mainstream. If the value of a coin increases by 500%, the volatility loss will increase to 25.5%. To avoid this situation, you can invest in low-volatility pairs tied to stablecoins.



Decentralized exchange pools consist of two coins, with users adding assets of equal value. If a site achieves an ideal balance at a 50/50 ratio, then proportional investments will maintain an ideal trading environment. DEXes are governed by the laws of supply and demand, which also leads to some problems.&nbsp;



In such a system, the price of assets changes depending on the actions of market participants, while external sources have no influence. If the movements of the charts are too abrupt, third parties are brought in to make adjustments and arbitrage is possible.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="960" height="480" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-26.png" alt="" class="wp-image-1181" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-26.png 960w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-26-300x150.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-26-768x384.png 768w" sizes="(max-width: 960px) 100vw, 960px" /></figure>



Providers can also spread their crypto across multiple exchanges to reduce exposure to any one asset or exchange platform. It is also important to consider the risks and rewards of participating in a particular platform and to be aware of fees.



<h3 class="wp-block-heading">Who&#8217;s using DeFi liquidity pools?</h3>



These pools are used by a variety of participants in the DeFi field, including traders, liquidity providers, and developers. For example, people can exchange coins without having to rely on centralized exchanges (CEX).&nbsp;Users can quickly buy or sell digital assets at a fair market price without worrying about order book depth. Developers can also create new ways for users to earn returns on their crypto. Overall, this technology has become an important component of the DeFi area.

DeFi liquidity

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-do-you-need-to-invest-in-the-DeFi-blockchains-1-1024x576.jpg" alt="" class="wp-image-1178" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-do-you-need-to-invest-in-the-DeFi-blockchains-1-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-do-you-need-to-invest-in-the-DeFi-blockchains-1-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-do-you-need-to-invest-in-the-DeFi-blockchains-1-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-do-you-need-to-invest-in-the-DeFi-blockchains-1.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



The field of decentralized finance is one of the most attractive to investors and a fast-growing part of the cryptocurrency market. It attracts many people with the prospect of potentially high returns at relatively low risk. A few years ago, skeptics predicted that the decentralized finance bubble would burst due to its rapid growth, but on the contrary, this sector has seen even more growth.



The rise of decentralized finance is also due to the popularity of cryptocurrencies, and their gradual acceptance by society and the state. New DeFi platforms are emerging almost daily, and leading international venture capital funds are actively investing in them. If the momentum continues and the cryptocurrency market continues to grow in 2023, we can expect the decentralized finance sphere to become even more developed and offer more opportunities.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="678" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-25-1024x678.png" alt="" class="wp-image-1176" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-25-1024x678.png 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-25-300x199.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-25-768x508.png 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-25-1536x1017.png 1536w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-25.png 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



So if you don&#8217;t know how to invest in DeFi, be sure to read this material. We will tell you what opportunities this field offers to investors and how to avoid risks.



<h2 class="wp-block-heading">How to invest in DeFi projects?</h2>



So, decentralized finance consists of an ecosystem of DEX, DeFi applications, stablecoins, DeFi tokens, and other financial tools based on blockchain (most DeFi platforms use the ETH network). These networks operate autonomously and cannot be controlled by any governing body. The financial services offered by the DeFi platforms are almost identical to the ones provided by traditional financial authorities.



But the most important advantage of DeFi applications is that anyone can make money with them. Of course, the industry is categorized as technically complex, so people encountering it for the first time may be intimidated. But, despite the newness of the infrastructure, the decentralized finance area is open to people who want to learn how to make a profit from it. Now, investing in DeFi projects can be done in a few different ways:



<ul>
<li>Direct DeFi investment. You can invest directly in some projects by purchasing DeFi tokens or coins through a DEX such as Uniswap or Sushiswap. You&#8217;ll need to have a digital wallet that supports the specific DeFi token or coin you wish to purchase.</li>



<li>DeFi funds. You can also invest in DeFi funds, which are managed portfolios of various projects. These funds are typically managed by a professional investment manager and offer diversification across multiple platforms.&nbsp;</li>



<li>Staking. How to stake tokens? Staking is the process of holding and keeping a crypto in a digital wallet to support the security and operation of a particular project. In exchange, investors receive rewards in the form of additional DeFi tokens or coins.&nbsp;</li>



<li>Yield Farming. This is the process of lending your crypto to a project in exchange for rewards. Yield farming can be a high-risk, high-reward strategy, and it is important to thoroughly research the DeFi protocol and understand the risks before participating.&nbsp;</li>
</ul>



Interactions in DeFi are based on smart contracts — special algorithms that ensure that parties abide by the terms of the contract. Today, smart contracts are used in a wide range of DeFi applications, including exchanges, DeFi lending platforms, stablecoins, prediction markets, insurance, and more.&nbsp;



It is important to do your analysis and understand the possible dangers of DeFi investing before making any decision. It is also recommended to start with small DeFi investments and gradually increase your holdings as you become more familiar with this ecosystem.&nbsp;



So, If you have no idea how to invest in DeFi and want to choose the most suitable option, you should sort out all the available solutions. We&#8217;ll look at both the DeFi investments listed above and a few new options.



<h3 class="wp-block-heading">DeFi tokens and projects investments</h3>



Investing in DeFi tokens is a way to buy assets in anticipation of their growth. The appeal of this DeFi investment approach is that a DeFi token has the potential to appreciate rapidly, sometimes by thousands of percent within hours of its release.&nbsp;



However, the high volatility of new crypto tokens presents a challenge. While it is possible to make significant profits quickly, the risk of loss is also very high. It is important to be aware of this danger and to carefully consider your strategy before you invest in DeFi tokens.



<h3 class="wp-block-heading">DeFi funds</h3>



These funds typically invest in a range of DeFi protocols, including those that offer DeFi lending, borrowing, DEXes, and other financial services. By investing in a diversified portfolio of projects, funds can help investors manage risk.



<h3 class="wp-block-heading">Stake crypto tokens or coins</h3>



You may have already searched for info on how to stake cryptocurrency. So, if you need passive income from cryptocurrency, staking is a great option. This means that assets are locked in a crypto wallet and all participants create a staking pool so that the network gets quality operational support. Also, the number of tokens in circulation is reduced, so the rate doesn&#8217;t decrease and the risk of inflation is minimized.



Staking is possible with ETH, BNB, and some other tokens of the network. To benefit from staking, you need to keep the funds in a crypto wallet. Rewards are paid by the network, so you don&#8217;t have to rely on third-party intermediaries. But DeFi involves other people using your tokens (not for free, but for interest).



<h3 class="wp-block-heading">Yield farming DeFi protocol</h3>



This is a popular DeFi protocol that allows investors to earn a return on their cryptocurrency holdings. In yield farming, people lend or provide liquidity to a DeFi protocol in exchange for interest or rewards. The strengths of this type of DeFi investment include:



<ul>
<li>The possibility of getting a good extra income.</li>



<li>You can influence the DeFi protocol by shaping it according to your needs.</li>



<li>High chances to invest in a promising token and earn a lot.</li>
</ul>



Farming became popular after the Compound DeFi protocol appeared. It distributed COMP tokens to those users who contributed funds to the platform or took decentralized credits. People get additional rewards, and the crypto project grows faster by encouraging participants to be active.



<h3 class="wp-block-heading">P2P lending</h3>



In decentralized lending, lenders and borrowers interact via blockchains. One person borrows in cryptocurrency at interest, leaving collateral in crypto as well. The investor, on the other hand, puts his assets into the liquidity pool and earns a profit. This is beneficial not only for the person who needs a loan but also for the owner of the cryptocurrency, who has free tokens and can lend them at a good interest rate.



<h3 class="wp-block-heading">Trading on the DEX</h3>



This is a way of trading on the exchange using borrowed funds. Leverage allows the trader to use many times the number of funds available. The trader borrows assets from lending DeFi protocols. Investments can be made by lending their unused cryptocurrency to people at interest. The risks of losing funds are controlled by smart contracts. Today, centralized exchanges are typically regulated by a central authority, while DEXes operate without intermediaries.



<h2 class="wp-block-heading">How much money do you need to use the DeFi protocol?</h2>



The amount of money required to use DeFi protocols can vary depending on the specific platform and intended case. Let&#8217;s look a little more closely:



<ul>
<li>For example, many platforms allow users to borrow or lend small amounts of cryptocurrency. People can deposit as little as $10 worth of crypto to begin earning interest or borrowing funds.</li>



<li>However, some protocols may require a minimum investment of cryptocurrency from your wallet to participate in certain features or earn rewards.</li>



<li>Additionally, it&#8217;s important to consider associated transaction fees, especially during periods of high network congestion on the underlying blockchain.</li>
</ul>



In general, many platforms have no minimum requirements for people who want to invest in DeFi, allowing users to start with small amounts of cryptocurrency. Don&#8217;t forget that you need a wallet to store your funds before you can invest in a specific project. Make sure you choose a wallet that supports the token or coin you want to use for the DeFi investing strategy. It is very important to review the features of the wallet and pay attention to its security mechanisms.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="682" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-24-1024x682.png" alt="" class="wp-image-1175" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-24-1024x682.png 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-24-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-24-768x512.png 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-24-1536x1023.png 1536w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-24.png 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



<h2 class="wp-block-heading">Choosing the right strategy to invest in DeFi</h2>



The strategy you choose determines how much/how long you invest and the list of assets in your portfolio. There are three main options: conservative, moderate, and aggressive. Next, you can select the assets:&nbsp;



<ul>
<li>Growth expects to grow for some reason, so you can sell in time to lock in profits in a short-term or long-term perspective.</li>



<li>Yielding generates passive income (when you stake tokens) or provides a stable option, such as stablecoins.</li>
</ul>



Given the main risks, a conservative strategy would be to invest in known projects using stablecoins. With an aggressive option, the person invests in growth assets and new projects with the expectation of high returns.



When choosing projects to stake digital assets or make investments, you must understand the market situation. You also need a special wallet to work with crypto (be sure to read about how to choose the best wallet). And in general, every investor should understand that this market remains volatile and risky.



This is a rapidly evolving field because new DeFi applications and projects are emerging all the time. Stay up to date on the latest developments in DeFi financial services by reading news articles, following social media accounts, and participating in online communities.

How to invest in DeFi

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax-1024x576.jpg" alt="" class="wp-image-1169" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



In 2023, numerous countries achieved substantial advancements in the regulation of cryptocurrencies and altered their tax policies. Nowadays, interest in digital assets is growing among people outside of just crypto investors, making it important for particular countries to provide legal certainty for the industry. Additionally, there are more and more cryptocurrency transactions every day.



In order for you to become familiar with this subject, we will now outline all the data about taxes in crypto area. This is crucial because many individuals are interested in buying and selling digital assets to gain money, and cryptocurrency transactions may be performed for significant sums.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="682" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-1024x682.png" alt="" class="wp-image-1170" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-1024x682.png 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-768x512.png 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-1536x1023.png 1536w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22.png 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



<h2 class="wp-block-heading">What kind of taxes are levied on crypto?</h2>



Cryptocurrency taxes are now imposed on a variety of activities carried out by companies and people using crypto. It sparks in-depth conversations on more particular concerns including the requirement for a crypto exchange license, crypto taxation, and other crucial subjects. The circumstance is always changing. Following are some&nbsp;rules for taxing crypto:



<ul>
<li>Taxation on capital gains. You can be liable for such taxes if you sell or trade USD or EUR. By calculating the cost basis—the price paid at the time of purchase is subtracted from the sale price—the gain or loss may be&nbsp;determined. Whether you&#8217;ve owned the asset for a short or long period of time before selling it may affect the tax rate for cryptocurrencies.
</li>



<li>Mining. For the purpose of crypto taxation, whenever you obtain digital currency by mining, the worth of it at the moment of receiving is regarded as income. The cost of equipment and energy may potentially be deductible as mining-related expenses.</li>



<li>Coin spending. This implies that, depending on the market worth of the assets at the moment of the purchase, you would have to pay any relevant crypto taxes and disclose the cryptocurrency transactions on your tax return.</li>



<li>Airdrops. It is taxable revenue when you get an airdrop from a project as a part of a marketing campaign or giveaway. 
The amount received must be reported on a tax return by investors.
</li>



<li></li>
</ul>



Thus, it&#8217;s crucial to be aware that each jurisdiction may have a different approach to cryptocurrency taxes. For this reason, it&#8217;s essential to seek advice from an expert in the industry or a financial counselor in order to comprehend the implications of cryptocurrency transactions in your country.



<h2 class="wp-block-heading">Is paying crypto taxes required in your case?
</h2>



Coins and tokens are therefore regarded as digital assets in the US and are often treated by the IRS in a manner similar to stocks or bonds. Cryptocurrency trades may result in profits that must be taxed as either capital gains or income. Taxes on crypto&nbsp;are also based on many elements, including how they were obtained&nbsp;and how long they were held.



It&#8217;s crucial to examine the way you&#8217;ve used your digital asset to ascertain whether you will&nbsp;encounter a&nbsp;tax burden associated with it. Let&#8217;s examine several scenarios in which&nbsp;investors are free from IRS obligations:



<ul>
<li>When you receive coins as a gift, it&#8217;s commonly not taxable, so you don&#8217;t have to pay tax on them until you decide to sell them.</li>



<li>You can be eligible for a charitable deduction on your tax return if you donate digital money directly to a recognized charity or nonprofit organization.
</li>



<li>Cryptocurrency transfers made between your personal wallets or accounts are not subject to taxes.
</li>



<li>When you choose to sell assets in the future, you may keep track of your initial cost basis and purchase timestamp to assess any prospective crypto tax repercussions. The staking rewards you receive while you stake ETH and hold ETH2 are often not taxed since the protocol has not yet released them.
</li>
</ul>



It is not taxable when you buy tokens on a cryptocurrency exchange and retain them. To put it another way, the tax on crypto&nbsp;is often assessed after you sell them and realize the profit or loss.



<h2 class="wp-block-heading">How the amount of crypto tax is calculated?</h2>



For instance, crypto&nbsp;is regarded as property in the US, which implies that any profits or losses from cryptocurrency trading are taxable as capital gains. It should be made clear that the&nbsp;rate of such a tax&nbsp;is determined by the payer&#8217;s&nbsp; level of&nbsp;income and the length of time the currency has been held.



Is there a way the crypto tax calculation procedure may be made simpler? A tool that aids in computing the tax obligations associated with cryptocurrency transactions is the 
crypto tax calculator.







<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="682" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-1024x682.png" alt="" class="wp-image-1171" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-1024x682.png 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-768x512.png 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-1536x1023.png 1536w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23.png 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



<h3 class="wp-block-heading">Ways to declare crypto on a tax return.</h3>



You must notify the IRS of any earnings when you acquire or sell coins. It is simple to collect the essential data for your&nbsp;tax returns thanks to the exchanges that offer reports on&nbsp;transactions that cover all account activity. The process might be more difficult if you have&nbsp;transactions spread across numerous exchanges.



You may use&nbsp;tax software like CoinTracker or TokenTax to make the procedure of gathering info about your operations&nbsp;simpler. With the help of these&nbsp;apps, you may enter activity from all of your exchanges and produce a report. It&#8217;s crucial to remember that such software could demand additional expenses. 



The reporting tax year for digital currency is the same as it is for traditional assets. To prevent penalties, it&#8217;s crucial to comprehend the tax year in a certain jurisdiction and complete your&nbsp;tax returns on time.



<h2 class="wp-block-heading">Summarizing the discussion about crypto taxes</h2>



You might face a fine if you deliberately or negligently disregard crypto tax laws or regulations. Interest will be added to the penalty if it is not paid on time. However, what if you realize that you&nbsp;are unable to pay them at the moment? You might, for instance, ask the IRS for a repayment plan to improve your situation.

How much does crypto get taxed

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/DeFi-and-non-fungible-tokens-—-1024x576.jpg" alt="" class="wp-image-1166" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/DeFi-and-non-fungible-tokens-—-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/DeFi-and-non-fungible-tokens-—-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/DeFi-and-non-fungible-tokens-—-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/DeFi-and-non-fungible-tokens-—.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



The blockchain consists of many of the same tokens that can replace each other. Therefore, even if the components of the blockchain are replaced, the system can continue to function as before without any changes. But there is another type of token called NFTs, which was created in 2017 based on Ethereum smart contracts.



At the same time, DeFi refers to a financial system that operates on a decentralized, permissionless blockchain, such as Ethereum, and is built using smart contracts. So, NFTs and DeFi are the two most commonly used terms in conversations about cryptocurrency and blockchain technologies. The world continues to explore the possibilities of these two fascinating fields of innovation, but how do NFTs and DeFi intersect? This is a very interesting topic and we will discuss it in detail today.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="960" height="540" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-21.png" alt="" class="wp-image-1165" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-21.png 960w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-21-300x169.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-21-768x432.png 768w" sizes="(max-width: 960px) 100vw, 960px" /></figure>



<h2 class="wp-block-heading">What are NFTs used for?</h2>



NFTs or non-fungible tokens are also one of the components of the Ethereum blockchain. It is impossible to split or replace NFTs because they are unique and differ from other blocks in the Ethereum network. This allows a person or company to secure their rights to a unique object that has been used successfully by artists and art venues. So let&#8217;s look at the main ways non-fungible tokens are used:



<ul>
<li>Non-fungible tokens on the Ethereum blockchain are used to represent unique digital assets such as art, music, video, and other forms of creative work.</li>



<li>These tokens are often bought/sold as collectibles, and their value can vary based on factors such as rarity, popularity, and historical significance.</li>



<li>By allowing artists to retain control and receive ongoing royalties for their work even after it is sold, these tokens have the potential to transform property rights and royalty systems in the creative industries.</li>
</ul>



Converting files into non-fungible tokens is a secure way to use blockchains to streamline the processes of buying, selling, and trading while drastically minimizing the occurrence of fraud. But when looking at NFTs from a financial perspective, they can be viewed as a store of value, similar to more conventional assets such as gold or coins. In this sense, each token represents a unique value that may be subject to market variability.&nbsp;



So, the similarities between NFTs and conventional financial systems are greater than many people realize. Rather than viewing DeFi and non-fungible tokens as potentially opposing concepts, it is important to recognize that they can have a close connection. NFTs are already being integrated into financial processes, demonstrating the potential of combining with DeFi. To understand how this merger can benefit individuals in both the real world and the metaverse, it is important to have a clear understanding of the definition and purpose of the DeFi ecosystem.



<h2 class="wp-block-heading">What can you do with DeFi?</h2>



Today DeFi enables a range of financial activities similar to those offered by banks, such as earning interest, borrowing and lending, insurance, trading, flash loans, and others. Moreover, decentralized finance works faster, more efficiently, and with greater security through the use of blockchain technology (most often Ethereum).&nbsp;



Users interact directly with each other without third-party providers. In addition, blockchains allow for the elimination of time constraints — the system can be used by any person 24/7, all year round. Let&#8217;s take a closer look at the definition of decentralized finance:



<ul>
<li>DeFi operates as a financial system, with the involvement of various blockchains, including Ethereum, to enable its ecosystem.</li>



<li>DeFi provides decentralized financial management solutions by incorporating tools like smart contracts.</li>



<li>The system of decentralized finance is completely transparent and open, unlike the alternative centralized services.&nbsp;</li>
</ul>



So, the definitions of non-fungible tokens and DeFi clearly show the possibilities of discovering the link between the two. But where do you start to see the connection between DeFi and NFTs? Looking at their definitions, you can see that NFT tokens offer a unique way to store value and DeFi space provides a decentralized infrastructure to unlock value.



<h3 class="wp-block-heading">What are smart contracts in blockchain?</h3>



As you may know, smart contracts are self-executing programs that run on a blockchain (Ethereum or another). They enable the automation of contract execution, validation, and enforcement without the need for a third party. In the context of our topic today, it is very important to reveal another thing. So, smart contracts play a critical role in both DeFi projects and NFT tokens:



<ul>
<li>In DeFi, smart contracts are used to automate lending, borrowing, trading, and staking, ensuring that all operations are performed correctly and transparently without the need for a broker.</li>



<li>In the case of NFTs, smart contracts are used to define the unique characteristics of the asset, such as proprietary rights, transferability, and authenticity. Smart contracts allow token creators to program certain conditions, ensuring that the artist receives a share of the profits when the token is sold/traded.</li>
</ul>



In addition, DeFi protocols are sets of self-executing programs that are encoded into smart contracts on a blockchain like Ethereum or another. DeFi protocols use blockchain technology to provide a more secure and transparent way to conduct various operations. Now you understand why we touched on this topic.



<h2 class="wp-block-heading">How does NFT token help in DeFi?</h2>



Now NFTs can play an important role in the DeFi space by providing unique assets that can be used as collateral for loans, traded on marketplaces, and used in other financial apps. For example, NFT marketplaces can integrate with DeFi protocols to offer new financial applications and investment opportunities. Let&#8217;s explore the different use cases of non-fungible tokens in DeFi:



<ul>
<li>Collateral for loans in DeFi. For example, a person can deposit tokens as collateral and borrow a certain amount of crypto, which they can then use for other purposes.</li>



<li>Users can provide liquidity to DeFi protocols by staking their NFT, which earns them a share of the transaction costs generated by the DeFi protocols.</li>



<li>NFT can also be used to create unique products in DeFi, such as prediction markets.</li>



<li>By holding an NFT, users can participate in decision-making processes related to the operation of the DeFi platform, such as voting on proposals or allocating resources.</li>



<li>NFT can be traded on marketplaces, allowing people to gain exposure to unique assets and providing new investment opportunities in the crypto field.</li>
</ul>



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="960" height="540" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-20.png" alt="" class="wp-image-1164" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-20.png 960w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-20-300x169.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-20-768x432.png 768w" sizes="(max-width: 960px) 100vw, 960px" /></figure>



So, NFTs have emerged as a promising use case in the DeFi space, particularly on the Ethereum blockchain (with the introduction of ERC-20 tokens representing digital assets). NFTs can serve as proof of proprietorship for art and other unique assets, making Ethereum an ideal platform for creators to share and engage with collectors.&nbsp;With the ability to prove proprietorship, NFTs offer significant value propositions on the DeFi platforms. Most importantly, DeFi helps in revealing the value of a particular asset. The next few years will show how productive the process of merging NFT and DeFi technologies will be, and whether it will be able to attract new users to the ecosystem without any major problems for it.

How can NFTs be used in DeFi (decentralized finance)?

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-decentralized-finance-1-1024x576.jpg" alt="" class="wp-image-1158" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-decentralized-finance-1-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-decentralized-finance-1-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-decentralized-finance-1-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-decentralized-finance-1.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



Today, DeFi and blockchain technology have become an integral part of the cryptocurrency economy and counterparts to the traditional financial system. Now people store money in a secure digital wallet and conduct financial transactions in seconds without intermediaries and third parties. Anyone with a stable Internet connection can use the DeFi application, plus it&#8217;s very convenient and transparent.



So we will be discussing a very important and relevant topic of DeFi work. DeFi is likely to be the fastest-growing trend in the cryptocurrency industry in 2023. That&#8217;s why both beginners and experienced crypto enthusiasts need to know how decentralized finance works and who can benefit from it.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="960" height="480" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-19.png" alt="" class="wp-image-1157" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-19.png 960w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-19-300x150.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-19-768x384.png 768w" sizes="(max-width: 960px) 100vw, 960px" /></figure>



<h2 class="wp-block-heading">What is decentralized finance?</h2>



This is a publicly available ecosystem of financial services and apps based on public blockchains (mostly ETH). DeFi also works without any centralized authority. DeFi covers all aspects of financial services and financial transactions (it can also be lending, borrowing, and trading).&nbsp;



At a time when the government is trying to centralize all financial services, a solution based on blockchain technology is just perfect. Any user can interact with decentralized finance and manage assets through P2P and dApps. Let&#8217;s take a look at all the major advantages of DeFi right away:



<ul>
<li>It&#8217;s transparent. The source code of DeFi applications is open, which allows anyone to understand the functionality of a smart contract or identify bugs. All transaction activity is public (financial transactions are pseudo-anonymous).</li>



<li>There are no centralized structures in DeFi and that&#8217;s great. All rules are written in a smart contract. Once the smart contract is deployed, the DeFi app can run autonomously, requiring minimal or no human intervention. Smart contracts govern all financial services.&nbsp;</li>



<li>Anyone can create and use the DeFi app. Unlike the traditional financial sector, there are no dispatchers or accounts that require complex forms to work with. Through wallets, users interact directly with smart contracts.</li>



<li>New DeFi apps can be created by combining other DeFi products (e.g. stablecoins or exchanges). This feature of DeFi is similar to a model in which a given structure can be assembled in various combinations. In addition, most of these apps are available to any user.</li>



<li>Decentralized finance also provides an adaptable user experience. If you don&#8217;t like the app interface, you can create your own. Smart contracts are like an open API for which anyone can build apps.</li>
</ul>



So, DeFi refers to a new financial system built on blockchain technology. In DeFi, apps are created using smart contracts on a blockchain, allowing for control and management of financial services or transactions without the need for third parties.&nbsp;



The DeFi ecosystem also consists of crypto assets, such as tokens, and stablecoins. Users&#8217; funds are stored in digital wallets. All transactions here are quick to execute, there is no long chain of brokers. This is convenient for deposits and lending. For example, the lender doesn&#8217;t have to share the profits with the bank, which accepts deposits at one interest rate and gives loans much higher.



<h3 class="wp-block-heading">Some disadvantages of DeFi</h3>



However, despite the many advantages, such financial services on blockchain technology also have their drawbacks:



<ul>
<li>One of them is the low performance of the system. This is because blockchains are slower than their centralized counterparts, requiring additional product optimization.</li>



<li>Another drawback is the high risk of user error. These apps transfer responsibility from intermediaries to users, which can be a negative aspect. Developing solutions that can minimize the risk of error is particularly challenging when products are deployed on top of a blockchain.</li>



<li>One more disadvantage is that development control is in the hands of one team. This problem is not always relevant, as some platforms involve working with users on improvements, but it is faced by many. In particular, challenges arise at the point where responsibility is delegated to the community.</li>
</ul>



In addition, this ecosystem is also characterized by instability. Finding the most appropriate app can be difficult, and users must have a certain skill set to choose the best option.



<h2 class="wp-block-heading">What does DeFi do?</h2>



DeFi&#8217;s primary goal is to change the conventional financial system, which relies on centralized institutions to facilitate transactions. Thanks to these technologies and open-source DeFi protocols, more people have access to new financial services, exchanges, and platforms. DeFi also helps users earn money on cryptocurrency assets and save on transaction costs. To make it easier to understand, let&#8217;s look at all the DeFi uses and how it works:



<ul>
<li>Generate ongoing income and rewards on your cryptocurrency by lending it out instead of receiving a monthly payout.</li>



<li>Secure a loan instantly and without the need for extensive paperwork, including access to ultra-short-term loans that are not available from traditional institutions.</li>



<li>Engage in P2P trading of selected cryptocurrencies, similar to buying and selling stocks without a brokerage intermediary.</li>



<li>Allocate your cryptocurrency holdings to alternative savings accounts and earn higher interest rates compared to traditional accounts.</li>



<li>Take advantage of long or short positions on specific assets, similar to the crypto counterpart of stock options/futures.</li>
</ul>



Let&#8217;s also talk about other ways to use this technology. You already know that stablecoins are cryptocurrencies whose value is tied to a fiat asset. MakerDAO, for example, offers another model of stablecoins. The issuance pattern of Dai&#8217;s stablecoins can be compared to gold-backed money. The distinction is that ETH cryptocurrency is used instead of gold.



Now let&#8217;s talk about exchanges, in this case, DEX (most people today have confidence only in these exchanges). It is a decentralized exchange, which doesn&#8217;t keep funds and users&#8217; info on exchange servers. Such an exchange acts solely as a platform for matching orders to buy/sell cryptocurrencies.



The system of these exchanges works in such a way that each transaction is conducted between users directly, and the exchange doesn&#8217;t access/store the crypto of its clients. Such exchanges offer a new model of crypto trading and exchange. One of the most successful and actively developing decentralized exchanges is Uniswap.



DeFi is also used to create prediction markets, services, and games (items in these games are usually non-fungible tokens that can be sold). The number of these projects is steadily growing. Some DeFi protocols enable liquidity mining and yield farming. The last concept refers to any action aimed at obtaining crypto for some kind of activity. It can be giving or taking credits, providing liquidity. Farming has gained a lot of popularity because of the opportunity to earn a good income.



<h2 class="wp-block-heading">What is the total value locked in DeFi?</h2>



Before you try to make money on a project, you need to analyze how dangerous it is to invest tokens or other digital assets there. This is where the TVL can help. One indicator of a project&#8217;s sustainability is how much funds other users currently have in its contract. Let&#8217;s understand what TVL is and why you should always pay attention to this indicator.



TVL shows the amount of blocked or frozen crypto funds on the project&#8217;s smart contract or liquidity pool. In other words, when you see the TVL abbreviation, it means how much cryptocurrency is currently invested in that particular project. The higher the number of funds, the better and safer it is for the potential investor.



With a high TVL, there is no risk of a sharp collapse of staking/farming. There will not be a situation where multiple users who have invested their tokens will take them out, sell the accumulated cryptocurrency and leave you with nothing. The more frozen tokens — the more people are interested, supporting, and developing this crypto project.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="960" height="640" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-18.png" alt="" class="wp-image-1156" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-18.png 960w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-18-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-18-768x512.png 768w" sizes="(max-width: 960px) 100vw, 960px" /></figure>



<h2 class="wp-block-heading">Conclusion: how does DeFi challenge banking?</h2>



In a world where states are trying to centralize all transactions, this technology comes in handy. Now DeFi offers many of the same services as banks, including earning interest, borrowing/lending, buying insurance, trading derivatives/assets, and more. However, this technology is faster, more efficient, and doesn&#8217;t require extensive paperwork or a third-party intermediary in transactions.



Today DeFi could provide financial services and transactions that are more accessible, and inclusive. All applications are accessible to anyone with a smartphone or computer. This eliminates the need for a physical bank branch and allows people to participate in financial activities from anywhere in the world. Now, cryptocurrency is opening up new opportunities for innovation and growth in the financial area. So, this is a real contrast to ordinary banking, where a central government controls the system.



<h3 class="wp-block-heading">Is Bitcoin a decentralized finance?</h3>



BTC is considered a decentralized digital currency, but it is not a comprehensive DeFi on its own. However, some DeFi applications may use BTC as a form of collateral or payment.

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