Level Finance was launched in 2023. Development started the previous year. Level Finance is a Decentralized Finance (DeFi) project. It usually takes sufficient time before one can make predictions about the quality of a DeFi project. Level Finance has only been around for a short while but already offers generous yields to liquidity providers. These range between 140% and 180% although it is possible that such high yields cannot be sustained. Therefore, only professional investors should opt-in. However, so far, the platform has performed well in terms of its liquidity.
As Level Finance is relatively new, we provide the background information you need to understand how the platform operates.
The Level Finance Platform
The Level Finance (LVL) platform uses perpetual contracts. With these types of contracts, users are betting on the future price of cryptocurrencies. However, normal futures contracts come with an end date. On the other hand, perpetual contracts remain in place indefinitely. They just need to keep on paying the fees that will prevent them from being liquidated and this allows them to hold their short or long positions. Level Finance allows users a leverage of 30X on positions using funds on loan from the trading platform.
Users who invest in the Level Finance platform make estimates of how much various cryptos will cost in the future. Technical analyses are undertaken to arrive at these evaluations. These users take out perpetual contracts. They are professionals with a need to take high risks. They can invest any type of crypto, which can differ from the crypto they are making estimates about.
The level app operates on the Binance Coin (BNB) chain. Trading is between a choice of specific cryptocurrency pairs. These are BNB/USD, ETH/USD, CAKE/USD, and BTC/USD. Users must have a software crypto wallet. These users are not required to give out their personal information.
Uses of Level Finance
Level Finance (LVL) tokens have three uses. Firstly, users can stake their LVL to increase the platform’s liquidity in exchange for LVL tokens. Secondly, they can vote on the development of the DeFi project. LVL tokens can be used to earn LGO (governance) tokens. Thirdly, with three pools to choose from on LVL, they can opt for an annual percentage yield. Else they can take part in liquidity pools on PancakeSwap. Users can see the balance in the treasury accurately.
There are no pre-mined LVL or LGO tokens. When liquidity is provided to the Level Finance treasury, the user can earn LVL tokens. Thus, tokens are ‘created’ in return for liquidity on the platform. LVL tokens are used to obtain LGO tokens. The value of all the LGO tokens is equivalent to the value of the funds held in the Level Finance treasury. In other words, the treasury is split between the circulating LGO tokens.
Level Finance is not for novices. It is still too new to make valid predictions about. It is best left to professionals and those who can afford to lose what they put in.
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