Businesses with excess cash on hand have an opportunity to put these extra funds to work in order to generate additional revenue streams. However, when it comes to investing these funds into cryptocurrencies such as Bitcoin, the volatility risk has been preventing them from pursuing this possibility.
AuDeFi introduces an alternative crypto-asset, a crypto-annuity, to enable businesses to manage their cash flow through a unique token called Cryptium. The token has been designed for high returns while offering a safe haven with volatility protection mechanisms: 1) elastic supply, and 2) collateral from risk-tolerant investors.
What is Cryptium?
Cryptium is a crypto-annuity designed to enable businesses to manage extra cash while providing high yields and low volatility. This decentralized finance (DeFi) tool also helps businesses earn predictable dividends meant to replenish their accounts to cover operational costs. Cryptium utilizes an elastic supply mechanism to protect stakers in the event of a sharp price drop, which shields against the effect of volatility.
Cryptium value proposition
Cryptium differentiate itself from other cryptocurrencies by utilizing a two-sided marketplace approach, where both risk-averse and risk-tolerant investors can participate and benefit from the staking mechanism. Risk would be shifted away from risk-averse investors toward the risk-tolerant investor at the expense of sacrificing potential upside above a certain threshold.
Risk-averse investors like small and medium size businesses (SMBs) can enter into a smart contract with other participants at a fixed rate of return for the crypto-annuity.
Here’s a hypothetical scenario to represent the different value protection mechanisms and upside for a predefined growth of 30% a year.
For example, stakers could lock their Cryptium for 30% annual percentage yield (APY), which would rely on risk-tolerant investors to stake a gold-pegged stablecoin (PAXG) as collateral. In the event the growth of Cryptium is higher than 30% in the following year after staking, the risk-averse stakers would only receive 30% and sacrifice the additional return which would be collected by the risk-tolerant investors (PAXG).
The following table describes the remaining outcomes:
| Risk-averse Cryptium stakers | Risk-tolerant PAXG stakers | |
| If Cryptium growth > 30% | Receive only 30%, sacrificing upside above this threshold in favor to the risk-tolerant stakers. | Recuperate their original PAXG collateral, and receive the excess growth above the 30% to compensate for the extra risks they took. |
| If Cryptium growth is between 0% and 30% | Receive 30% and consume some or all of the PAXG collateral provided by the risk-tolerant investors. | Lose some or all their collateral and do not benefit from the Cryptium growth. |
| If Cryptium growth is below 0% | Are protected against a loss of value by the elastic supply mechanism which duplicates their Cryptium tokens to ensure the total value of their asset is at least equal to their initial stakes.
They also receive 30% by consuming some or all of the PAXG collateral provided by the risk-tolerant investors. |
Lose some or all their collateral and do not benefit from the Cryptium growth, however they are unaffected by the price decrease of Cryptium, since their initial stake was in PAXG. |
| Upside Potential | Limited at the predefined 30% APY.
Sacrifice upside potential for lower risk. |
Assume more risk for the additional upside potential. |
The bottom line
The current cryptocurrency sector has some barriers toward mainstream adoption. Most specifically, the price volatility challenge continues to be problematic for businesses. Businesses are skeptical of converting extra cash flows to crypto over the fear of suffering losses. However, Cryptium is a real game-changer. By virtue of being the first global crypto-annuity that is non-speculative, investors and businesses are safer to use Cryptium as part of their operations than traditional fiat or cryptocurrencies.
Cryptium becomes a safeguard for smart investors and businesses alike. Join us on Discord to keep up to date with news about Cryptium.
Der Beitrag Cryptium: Managing cash flow for businesses with high returns erschien zuerst auf Crypto News Flash.
