Place/Date: - June 15th, 2022 at 9:00 am UTC · 3 min read
When you invest in cryptocurrencies, you’re essentially investing in software. You’re betting on the abilities of the underlying algorithms to produce value and to grow in terms of usage over time. However, time and time again, research has proven that even the most intelligent algorithms can produce better results when paired with human minds. This is the basis behind a new DeFi token known as GNOX.
The Gnox platform’s algorithms are quite simple. Like a dealer at a poker table, the software rakes a portion of all money on the table into a pool called the Gnox Treasury. At this point, the humans take over. A team of experienced DeFi investors builds a diversified portfolio of passive income-producing investments such as those found on staking and lending platforms and in liquidity pools.
Periodically, the profits from these investments are then used to buy back and burn GNOX tokens thus decreasing the circulating supply and raising the spot price. This, of course, makes everyone’s holdings more valuable.
In addition to moving funds into the treasury, the algorithm also takes a 1% portion of all GNOX token sales and redistributes those tokens to current holders once every hour.
This overall strategy has some great benefits. First, the treasury rake discourages day traders from speculating on the asset. Second, the 1% royalty on all GNOX token sales encourages early adoption and long-term hodling. Third, investing in a diversified portfolio greatly reduces risk. And fourth, the deflationary mechanism increases the value of the token over time.
How does this compare to investing in a Layer 1 blockchain? Let’s use Cardano’s ADA token, as a popular example. First, ADA is probably a good bet at this point – or will be when the crypto market finally turns back around.
However, there is always the risk – no matter how small – that the platform will see a major setback and plummet in price. The risks could come from outside or from within the organization. This means this investment requires a bit of babysitting to be able to react quickly to such events.
Also, while ADA has been quite volatile over its lifespan, GNOX is likely to be far less volatile since it discourages short-term trading.
If you can stomach the volatility and you’re willing to dump the token if it tanks, then ADA might be a good fit for you. There’s a good chance that this asset could produce a 500% return over the next few years.
If you’re not so keen on volatility and risk, and you prefer stability and passive income, then GNOX might be a better investment for your portfolio.
The Gnox platform doesn’t officially launch until July 18th. The GNOX token, however, is currently in presale mode until July 12th. Keep in mind that all GNOX tokens purchased prior to launch will be eligible for the 1% royalties as soon as they take effect for as long as you hold the token.