How to invest in Oh! — Start with Stablecoins
What are stablecoins?
Stablecoins are digital representations of assets that run on a blockchain network. There are three categories of stablecoins:
- Fiat-backed
- Crypto-backed
- Algorithmic
Oh! Finance is focused on fiat-backed stablecoins (like the US Dollar or Chinese Renminbi at a 1:1 ratio) for use in Decentralized Finance (DeFi). Commonly used stablecoins include USD Coin (USDC), MakerDao (DAI), USD Tether (USDT), Gemini USD (GUSD), and Binance USD (BUSD).
Why are we focused on Stablecoins?
Have you seen what Banks are paying out in ‘Savings Accounts’ these days? Forget about making money, you are losing to inflation storing money with your bank. Not everyone wants to trade in stocks/equities, or have a management company eat into your gains, and while real estate is a great investment option, it’s not typically a ‘quick’ transaction that may leave you with cash not used for months between deals.
Enter DeFi.
Yield Farming and Asset Lending have opened the door as a way to do better than a traditional savings account, while still minimizing risk of your underlying capital. For many, cryptocurrencies have opened a new world of investments and potential, and while the Bull Market shows strength, many users are taking profits to secure future stability.
Stablecoins happen to be a fantastic tool in the DeFi to interact and create returns. Centralized Finance (CeFi) names like BlockFi, Nexo, Voyager and others have attracted huge investments and are offering rates that were previously unheard of ‘just to store you dollars’. As the internet has shown, technology can be a disruptive force. Banks do just fine with only your fiat currency, and are able to use that across a number of instruments, and Crypto proves no different.
At Oh! we think that not only can everyone do better than a bank, but we can beat the CeFi players through better strategies and lower overhead costs.
(Oh! target APYs and Rewards will be announced later this month)
How Stablecoins Work
Fiat-backed coins are built on standards issued by regulated financial institutions. Stablecoin values are pegged to these assets, and they inherit some of the attributes native to traditional cryptocurrencies like transparency, immutability, scalability and security all while maintaining parity with the underlying asset.
These attributes provide strong backing, such as when the US government leveraged Cirlce to send stablecoins for foreign aid across borders to Venezuela*, and Visa to process transactions for settlement in USDC as a stablecoin co-founded by Circle and Coinbase (and managed by Centre.io).
Compared to cryptocurrencies like Bitcoin or Ethereum, stablecoins are financial instruments that are less susceptible to price volatility. Crypto markets are frequently more volatile than traditional financial markets because of the speculative nature of nascent technologies. Due to this volatility, many investors choose to sometimes convert their assets into stablecoins for portfolio diversification, or as a hedge to counter volatility.
Additionally, as a form of payment transfer, cryptocurrencies are a technological leap forward. However, due to the volatility of many cryptocurrencies, they are not ideal for making payments for goods and services because they can be worth substantially more or less than the time of the transaction.
Stablecoins do not share this difficulty. They see minimal price movement and closely track the value of the underlying asset or currency of which they represent and serve as reliable assets.
At Oh! Finance, we believe that you should be able to increase the value of your assets whether the market is bullish or bearish. You can maintain the security and stability of fiat-backed assets, while using the tools of decentralized finance to earn value, without the risk of volatility from traditional cryptocurrencies.
Looking ahead
Stablecoin initiatives have improved access to services offered by Decentralized Finance (DeFi) and attracted a significant amount of interest; from the average retail investor to institutional fintech corporations.
To continue widespread adoption, it’s important that stablecoins provide a safe store of value while ensuring security and legal compliance for its users. The cryptocurrency space is positioned for continued disruption and evolution as the industry has attracted multidisciplinary talent, investments, innovation, and enterprise grade infrastructure solutions. Finance hasn’t seen this kind of advancement since the credit card!
Oh! Finance will leverage a suite of DeFi products, that allow for a strategy to bring you better returns than CeFi, while keeping the simplicity. Simple choices and straight forward information. Put your money in and watch it grow, without the chart watching, and without the stress.
Earn More with your DeFi Dollar at Oh! Finance
About Oh! Finance
Oh! Finance has a simple goal: Do More with your DeFi Dollars. Oh! provides Industry-Leading APY interest rates on your stablecoins (like USDC), all on a simple, secure and easy-to-use DeFi platform.
