📌 What does EMP.Money actually do and how can it afford its daily APR’s?
📌 What does EMP.Money actually do and how can it afford its daily APR’s?
Let me say immediately this is going to be a long article!
I want to cover the two most commonly asked questions that I get asked about EMP.Money.
And they are:
1: What exactly is EMP.Money?
2: How can it continue to pay daily (even in a bear market)?
Now - to answer these questions - there is a LOT to take onboard! So grab a coffee - and let's get started.☕️
EMP.Money has created a world of new possibilities, and it is an innovation with limitless potential.
It's important to add that EMP.Money is a mature, complex, cutting-edge ecosystem; therefore, it's completely normal to get confused and lost at first (in fact, it took me a few months of studying to get to grips with how it works).
However - whereas there is a lot to learn - in this article, I want to give you a 37,000-foot overview of what you need to know to feel comfortable to get started.
Before we start to peel back the many layers of the EMP onion, we need to get clear on the following three terms: Crypto, Blockchain and DeFi.
✅ Crypto, of course, is digital money.
✅ Blockchain is the underlying technology that allows crypto to exist.
✅ And Decentralized Finance (DeFi) is the umbrella term used to describe the new opportunities that crypto and Blockchain bring.
However — it is worth noting that there is a BIG misconception regarding DeFi.
The misconception exists because most people try to apply what they ALREADY know in the real world to the crypto space.
But in reality -- crypto is VERY different to what we are used to. As a result, it can be difficult (at first), particularly for newcomers, to get their head around what is possible with DeFi (particularly when it comes to the daily APR's).
So let's break this all down :)
Everyone is used to Centralized Finance.
Centralized Finance is the traditional banking system: banks - middlemen - conventional financial goods and services. That's what we've all grown up with. That's how it has always been.
That is, however….until 2008.
In 2008 - the financial crash changed everything. The crash was caused by the greed of centralized banks and financial institutions. However — out of the burning embers of this economic crash - 'Decentralized' Finance was born (it's no coincidence, by the way, that the white paper for Bitcoin was released in the midst of the financial crash).
Decentralized Finance takes control away from the banks - and puts it in the hands of us - the individuals. In other words - thanks to Blockchain technology and cryptocurrency - we no longer need centralized banks and their antiquated methods. Instead - we become the bank!
As a result - Decentralized Finance has created a world of new possibilities for digital asset users.
👉 DeFi essentially means financial services for all 👈
It's easier to use, has better interest rates, no ridiculous fees or middlemen, no restrictions on what you can or can't do with your money. Plus, anyone with an internet connection can have access.
Think about that for a moment!
Did you know 35% of the world's population - that's 2 billion people - have no access to a bank account? That means 2 billion people can't get loans, mortgages, insurance etc. They live in a cash-only world, which is open to theft, fraud, and crime. Suddenly with DeFi, everyone - regardless of their situation - can now access loans, mortgages, savings, investments etc.
But not only does DeFi benefit the 2 billion people that have no current financial tools, but for those of us in developed countries, DeFi affords us access to financial instruments at a FRACTION of the cost, and NO extortionate fees made payable to a middleman.
As a result, you can earn much greater interest with Defi.
Think about your money in the bank. You'll be lucky if you earn 0.3% a year. With DeFi protocols - it's very normal to be able to earn 0.3% a day. This is just one of the many reasons why centralized Finance and conventional banks are worried about DeFi.
DeFi is the new kid on the block. Faster, transparent, and cheaper. Considerably cheaper.
And that brings us nicely onto EMP.Money -- which is one of the glittering darlings of this new DeFi world.
📌So what exactly is EMP.Money and what does it do?
The goal of EMP is to build a sustainable DeFi protocol.
But what exactly does that even mean?
To simplify it even further - EMP.Money is a daily passive income platform - that runs on the Blockchain - that is built with sustainability in mind.
Eventually, EMP is moving into what they call their' final form'. Think of this 'final form' as an 'online bank'. This means that eventually, EMP aims to provide loans - borrowing - and all sorts of other financial mechanisms on the Blockchain - services that beforehand we would have had to go to a 'conventional bank' to ask for.
And these services will be available for EVERYBODY, regardless of borders, geography, world politics or financial situation.
Our opportunity with EMP.Money is to assist in this 'building-of-the-bank' and help provide the financial strength EMP.Money needs to be able to perform many of these tasks.
We help to 'build this bank' by depositing our own crypto.
When we deposit our own crypto, this is known as providing liquidity to the protocol. And by providing liquidity to the protocol, we are providing "a pool of money" that will be used for future services.
Essentially think of it like this: EMP is the bank, and we are stakeholders of the bank. And not only that - but we will also get compensated for providing this liquidity - much like how a dividend payment works (more on this in a moment). In fact, of all the advantages EMP.Money offers the ability to earn high yields (ie Daily returns/APR's) might be the most significant.
So let's recap.
The first question was: "What exactly is EMP.Money and what does it do?"
Here is the answer:
"EMP.Money is a daily passive income platform built with sustainability in mind. EMP.Money is a DeFi protocol that is built on the Blockchain - whose eventual purpose is to provide financial services that we would associate with a 'regular, high street bank'.
As investors, we can help 'build this EMP.Money bank' by depositing our own crypto. This is known as staking or providing liquidity - which in turn provides the financial strength to EMP.
And as a staker/liquidity provider, we get paid daily yields, which are precisely like receiving dividend payments."
As stated at the top of this article - there is a LOT to EMP.Money - and the more you get involved — the more you will discover!
But now, at least, we have an overview of what EMP.Money is at its core.
Let’s move on to the next question:
📌 How can EMP.Money continue to pay daily (even in this bear market)?
Let's carry on!
Now - let me remind you - that for 99.99% of people - the whole concept of these 'DeCentralized' protocols - is something that is BRAND NEW. So, you need to read the following with an open mind and be prepared to allow yourself to think differently about finance.
The first thing to mention - is that with DeFi - there are no middlemen. When you purchase any cryptocurrency, you essentially invest in software/code. So straight away, that is a bit abstract for many.
A DeFi protocol uses software known as Smart Contracts that run autonomously. There are no manual interventions or labour costs incurred. This, along with no intermediaries or middlemen, unlike in Centralized Finance, reduces costs and hence leaves higher profits for distribution amongst those that invest.
Without a doubt, the biggest catalyst for DeFi's growth has been the emergence of something called yield farming.
In its simplest terms, yield farming refers to the process of earning interest on your crypto assets.
This concept is not new. Earning interest (or yield) on your savings is what banks started doing hundreds of years ago as their selling point to gain customers.
Now it's cryptos' turn - only with a lot higher rates.
DeFi creates an alternative way to earn on your assets: rather than locking your money away in a bank account, you can now deposit your crypto assets in what are known as smart contracts (which are essentially just computer code) in exchange for daily interest. In other words, you are ' farming' yield.
📌 There are TWO major things that allow EMP to continue to pay daily APR's
And these are the ' deep liquidity' and the 'locked liquidity'.
EMP has built further contracts on their protocol - called Detonator-style contracts.
When anyone stakes (i.e. deposits) their crypto into any of the Detonator-style contracts - that deposit is locked up - but pays out a smaller percentage every day of the overall liquidity pool. This 'locked liquidity' increases the reserves in the EMP protocol, allowing a small percentage of those reserves to be distributed daily between investors.
By using the protocol's own locked liquidity to pay out yield, EMP can mitigate any 'draining of funds' or a 'run on the bank' that other protocols have experienced because you cannot withdraw your initial deposit all at once.
Having this unique feature of locked liquidity (which is in the millions of dollars) protects a protocol and is one of the reasons that APRs can continue to pay daily (EMP has paid every day since it started in January 2022, never missing one day, never having an exploit, and never going offline).
The beauty of these Detonator-style contracts is that only a small amount of the locked liquidity is available daily to be paid to those who invest. Another wonderful benefit of these Detonator-style contracts is that they are specifically created to have exposure to Ethereum and BNB.
Ethereum and BNB are considered some of the safest and bullish cryptocurrencies. And as EMP.Money has chosen to have exposure to these two assets, in effect, EMP.Money is 'standing on the coat-tails' of these two crypto juggernauts and the future developments that will happen in the Ethereum and BNB ecosystems.
So, when those two assets rise - the total liquidity of what is locked inside EMP.Money also rises - allowing for higher APRs to investors.
Deep liquidity is similar to locked liquidity.
Both are 'pools of money' that are pegged and exposed to Ethereum and BNB.
The reason that many DeFi projects fail is that they do not have deep liquidity.
Deep liquidity means the protocol has enough funds to cover anyone wanting to sell, exit, and cash out.
The key to really understanding how DeFi works is through EDUCATION.
Most people don't really understand how these DeFi protocols work, and there is a lot to get your head around (as I'm sure you are seeing for yourself. SIDE NOTE: it took me years to get a solid understanding 😜).
But right now, those DeFi investors that are educating themselves in this space are earning lucrative rewards for pioneering and adopting this technology. Most people are new to all of this, so educating newcomers on how to participate in the best ways possible is beneficial for the protocol and the investors. Another reason for the sustainability of EMP is understanding how Inflation also plays its part.
📌 The role that INFLATION plays within EMP.MONEY
EMP is what is known as a seigniorage protocol.
Don't be put off by that phrase! I had no idea what a 'seigniorage protocol' was. It's really just a fancy word for 'controlled inflation'.
The word Inflation has recently become a dirty word. That's because governments can print money to their heart's content - as many have done.
For example: when the pandemic hit, the US Federal Reserve inflated the economy by printing trillions of dollars ($6.8 trillion in 30 months).
Aside from a 'quick short-term win' of an extra few hundred dollars in everyone's bank accounts - in reality, what happens when you bloat the economy with cash is you get crazy Inflation. And that's precisely what happened. Inflation skyrocketed to 40-year highs.
But that's 'out-of-control' Inflation.
So whereas 'out-of-control' Inflation is bad, the opposite is also true.
'Controlled Inflation' is a good thing.
Controlled Inflation is how every single economy (attempts to) exist today.
EMP.Money has taken the mechanics of controlled Inflation - and applied it to the Blockchain.
So long as there are rules in place to mitigate uncontrolled Inflation, Inflation can be very powerful.
Within EMP.Money - there are two main tokens. EMP - and ESHARE.
ESHARE is the 'reward' token - meaning it is the token that can be sold safely for profit. There is also a limited supply of ESHARE (very low - approximately 50,000 tokens) - meaning all things considered - if EMP.Money is doing as it aims to - there will always be demand for ESHARE.
EMP.Money's goal is to be sustainable. That means that it will not have the highest daily APRs out there - but it does have sustainable daily APRs - which beats everything else.
So many DeFi projects try and grab the headlines by shouting about how they can pay '1% a day' or '2% a day' - however, the reality is that is NOT sustainable - and months or even weeks later - these other projects are gone.
👉 EMP.Money has paid out EVERY day.👈 The APRs are variable (I've seen them from 0.15% a day - to 0.9% a day). The APRs vary based on the price of ESHARE - and ESHARE is linked to the price of BNB and Ethereum and the whole market in general.
As the protocol matures, further revenue streams are continually added, attracting more eyeballs from those wanting to discover more about this fast-moving DeFi space.
One such new revenue stream within EMP.Money is they are now a full-fledged software company selling services to other projects and entities, selling the detonator-style contract as a service (DaaS). Other DeFi projects are licensing services, code and smart contracts created by EMP.Money for their own projects - which allows EMP.Money a further increase in investment - further increasing the locked and deep liquidity.
EMP.Money is ploughing a new path in DeFi and is on track to be a leader in this space.
As the DeFi ecosystem matures and adoption grows, many users are becoming aware of the abundance of opportunities to earn on their crypto assets.
As of right now, you can't do any better than taking a good look at EMP.Money.
~ chris farrell, Dec 2022