Risk-On vs Risk-Off Yield on PulseChain

Most PulseChain users don’t know the difference between risk-on and risk-off yield.

More importantly, they don’t know how to take advantage of this difference.

If you don’t, it could be costing you money.

But don’t fret, here’s a simple explanation of how to make your money work for you.

Risk-On vs Risk-Off Yield

"Risk-on" and "risk-off" are terms used to describe the behavior of investors in financial markets, particularly in relation to their appetite for risk.

Let’s break it down.

Risk-On:

• During periods of risk-on sentiment, investors are generally more willing to take on risk by investing in riskier assets that have the potential for higher returns.
• In the context of bond yields, a risk-on environment typically sees higher yields for riskier bonds. This could include corporate bonds, high-yield bonds (also known as junk bonds), or bonds issued by emerging market economies.
• In a risk-on environment, investors may favor equities over bonds, leading to increased demand for stocks and potentially lower demand for bonds, pushing bond prices down and yields up.

Risk-Off:

• During periods of risk-off sentiment, investors tend to seek safer assets and are more risk-averse.
• In terms of bond yields, a risk-off environment often leads to lower yields on safer assets, such as government bonds, particularly those issued by stable countries like the US, Germany, or Japan.
• Investors typically flock to safe-haven assets like US Treasuries, German bunds, or gold during risk-off periods, driving up demand for these assets and consequently pushing their yields lower.

Risk-On Yield for PulseChain

In the case of PulseChain, risk-on yield would mean holding a principal of a cryptocurrency like PLS.

The benefit of risk-on yield is that your principal maintains exposure to the potential upside volatility that so many crypto investors love.

A great example of this is the LOAN Staking Pool.

The LOAN Staking Pool allows holders of the LOAN token to earn the issuance and redemption fees of the protocol.

In other words, they earn both PLS and USDL at the current rate of 10.7% APR (as of press time).

With Liquid Loans, this is completely trustless, and is executed without leaving the blockchain. In addition, you get to benefit from decentralized security and can retain full custody of your coins.

Compare this to centralized exchanges, which often promise yield on stablecoins only to lose their users’ money.

Risk-Off Yield for PulseChain

Risk-off yield, in the context of PulseChain, means holding a truly-decentralized stablecoin as your principal and earning yield on it.

Risk-off yield is awesome because it lets you preserve the value of your portfolio while still continuing to earn!

That’s where the Liquid Loans Stability Pool comes into play.

The Stability Pool lets you deposit USDL, which is a risk-off stablecoin, in order to earn both USDL from liquidations and LOAN from emissions.

The APR for the Stability Pool is also extremely high, at over 23.8% APR (as of press time). 

And, just like the LOAN Staking Pool, it is completely decentralized.

There is no centralized counterparty who manages your ‘deposits’. Instead, you are simply interacting with an immutable and audited smart contract to earn yield while staying shielded from price volatility.

Getting the Most Out of PulseChain

Liquid Loans has introduced an easy and efficient way for PulseChain holders to access both risk-on and risk-off yield.

This makes it super easy for investors to continue earning in both bullish and bearish market conditions.

In addition, it means that regardless of your own personal risk appetite, you can start earning with Liquid Loans right now in whatever way best suits you.

Launch the LL DApp to find out how much you can earn right now on PulseChain.