The power of compounding in crypto

Money makes money. And the money that money makes, makes money. No, I didn't say this, but it was rather Benjamin Franklin and he was so right and he captured the power of compounding returns. Rather than getting your yields out or being returned at the end of the investment, reinvesting them and generating additional returns over time encapsulate the essence of compounding. And who doesn't love to get something on top and not leave anything on the table when it comes to yield more crypto tokens?

Childhood story

Going back to my childhood I remember the times when I was spending my winter vacations at my grandparents which had a house on a hill. After it snowed, we would make snowballs and rolling them down the hill: these started off small with not much extra snow added, but the bigger they were getting, the more snow they would gather. And when those became some monster snowball of more that 1 meter, we would climb on them and shouted out: Who's the king of the hill? Well, we all were in those times... But this is a great analogy in my opinion of what compounding represents.

The further the snowball was going, the more snow would gather, the more powerful the effect and this is why time also plays an important role in compounding. A passive revenue stream which gets bigger and bigger in time, just invest initially or also recurrently and forget about it.

Stablecoins compounding

Compounding is predictable and mathematical and this is why it goes very well with stablecoins. This removes any price volatility from the equation and lets us calculate the returns over big periods of time - for example 10 years. As a long term investor, compounding is like a glove for me and provides extra incentives and motivation to opt'in for it.

We are so lucky that we have here on the Hive blockchain a steady stablecoin in the form of HBD which offers 20% APR as upvoted by the Hive witnesses. And guess what? That is without compounding which still applies and add few more percentages on top of that.

Stablecoins with compounding returns are in my opinion an antidote for bear markets in crypto space. They continue to provide earnings with a "premium" return provided by the compound effect and consolidate the value of our portfolio. They are extremely passive, so you will not lose any time on them while they will keep earning even when you sleep. How can you not love such returns and compounding? Well I do and part of my crypto sells, I'm putting back in stablecoins with compound returns like HBD.

Posted Using InLeo Alpha