Compounding Yield Calculation Starting Amount: <strong>10 BNB</strong><br> APY: <strong>5%</strong><br> Compounding Frequency: <strong>Monthly</strong> After 1 year, you would earn approximately: <strong>0.63 BNB</strong> from yield farming<br> <strong

Original Article Title: "Lazy Person's Guide to Earn While Lying Down: Buy 10 BNB at the Beginning of the Year, Compound Farming on Binance, How Much Money Can You Earn by the End of the Year"

Original Article Author: Frank, PANews

During a bull market, there seem to be countless ways to make money. Some people find angles through meme coins, some stay up all night trading futures contracts, and others work hard to participate in airdrops. Besides these methods, is there a way to profit through a "hands-off," non-gambling, non-stressful approach? Some smart money has set its sights on Binance's Launchpool or Megadrop and similar platform activities to achieve a compounding goal. In this article, PANews will review various activities on Binance over the past year and simulate how much profit can be obtained by holding 10 BNB until the end of the year.

Participation in 28 Token Airdrops Throughout the Year

Overall, BNB's earnings can be divided into three main parts: first, the value increase brought about by BNB's token price appreciation. Second, the reward earnings from participating in Launchpool activities. Third, Megadrops, HodlerAirdrops, or other staking rewards.

Using January 1, 2024, as the starting date for the calculation period, on January 1, BNB's closing price was $313.5. At that time, purchasing 10 BNB would require a total investment of approximately $3135. As of December 31, the price of BNB was around $702.3, representing a growth of about 124% since the beginning of the year. Based on this calculation, the profit from holding BNB would be around $3880.

In addition to the appreciation in BNB value, Binance's Launchpool is another type of activity that many users participate in. Projects participating in the activity reward a portion of their tokens to users staking BNB or other stablecoins. By December 31, the total locked amount on Binance Launchpool was approximately $1.53 billion, with over 6.1 million non-duplicate participants historically. In 2024, Binance launched a total of 21 Launchpool events.

According to PANews' calculations, users participating in these Launchpool events from the beginning of the year could earn around 1.6% of the token amount per event on average. Looking at the highest token price received as a reward, the average earnings per event are around $70. The total earnings from this part can reach up to $1481 at most. The overall earnings rate from participating in 21 events is approximately 47.2%. Among them, the highest-earning event was Altlayer at about 5.93%, with earnings of $173.3. Following that, PIXEL had a return rate of around 4.45%, with earnings of approximately $156.

In addition to Launchpool, Binance has also launched 2 Megadrop events and 5 HodlerAirdrop events this year. If you participated in all 7 events, the total income would be approximately $557, with a return rate of about 17.7%.

In summary, participating in Binance's Launchpool, Megadrop, and HodlerAirdrop activities can yield a maximum overall return of 65%. When combined with a coin price increase of 124%, the total return rate can reach 187%. Overall, participating in these activities can ultimately increase the initial investment of $3135 to $9087.

Higher Returns with Compound Interest

Of course, the above method may not be the optimal strategy for maximizing returns. Many believe that introducing a compounding mindset, by selling each reward or token received through participation and buying BNB each time, can increase the quantity of BNB and thus provide more principal to participate in activities, resulting in potentially higher overall returns.

Firstly, this operational method may have certain flaws, as we can no longer calculate returns based on the highest price. In principle, this method requires selling the received tokens immediately after each event to avoid missing the next one. Therefore, the calculations used consider the closing price of these event tokens on the first day of their listing.

Using this compounding method, participating in 21 Launchpool events can ultimately increase the initially held 10 BNB to 12.39 BNB. With BNB growing by 2.39, calculated at $702.3, the profit from this portion is approximately $1678. Adding the profit from Megadrop and HodlerAirdrop events of about 0.62 BNB, the final BNB quantity reaches 13. If you follow this method of selling each event token and buying BNB, the final amount would be around $9136.

10 BNB
APY: 5%
Compounding Frequency: Monthly After 1 year, you would earn approximately: 0.63 BNB from yield farming

This return result is higher than simply participating in events and selling at the peak. The biggest benefit is that this operational method is closer to real-world implementation since no one can sell at the peak every time. Compared to normal event participation, where only the reward tokens are sold without converting to BNB, the final actual asset total is approximately $8490. In comparison, the compounding method proves to be more advantageous.

Tripled in Value in a Year, Outperforming Most Tokens by Over 70%

Of course, regardless of the operation method, in the end, we used a principal of 10 BNB worth $3315, which after one year of practical operation eventually translated into a total amount within a range, namely $8490 to $9136. The overall wealth change is about 2.56 times to 2.75 times. Of course, the primary source of income is still the appreciation of BNB, followed by Launchpool activities.

Comparing the maximum price fluctuations of 182 spot and contract trading pairs listed on Binance Exchange this year, this return exceeded the performance of 73.6% of the tokens in the sample. On the surface, such a return may not be significant compared to the thousands of times gains in the crypto world. However, for those with a relatively large capital base, seeking relatively stable returns, or enthusiastic about airdrops but unable to participate in yield farming activities, this type of operation method seems to have shown respectable results. Firstly, in terms of the input-output ratio, whether it is participating in airdrops or speculating on MEME coins, the time and cost spent on-chain are still significant. In contrast, participating in these types of activities is relatively much easier. Secondly, the high volatility of MEME coins, the uncertainty of airdrops, and others can significantly reduce the success rate of investments, with less volatile markets often offering relatively stable returns. Therefore, these wool-fleecing activities seem to have an effect of accumulating small gains into substantial rewards.

However, before implementing any investment strategy, it should undergo extensive data analysis and fundamental judgment. The above content is for reference only and is not investment advice.

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