Why Adding Digital Assets To Your Portfolio is Important

Invest. Save. Invest. From a young age, individuals are encouraged to plan their futures in order to grow and manage their wealth over the course of their life. In today’s day and age, we are exposed to a whole new asset class: digital assets. Although they have numerous capabilities, there are many people who remain unaware of the power of investing in digital assets.  It’s no surprise that passive income is just as necessary as active income in terms of accumulating wealth. Active income is an amount you are compensated for working, while passive income is the money your assets can make you in your sleep. Making money while sleeping? What’s better than that!  While investment portfolios are a fantastic way to plan accordingly for retirement and savings, modern-day finance has introduced a valuable new asset class through the ownership of digital assets. These 21st-century digital assets have leveled the playing field for investing and have shown strong returns over time. Read more to learn why you should add digital assets to your portfolio.

What are digital assets? 

Digital assets and cryptocurrency knowledge usually start with some general knowledge of Bitcoin. Bitcoin first came to the market in 2009 and has since skyrocketed in value, reaching record highs of over $60,000. With the cryptocurrency market now being valued at over $2 trillion dollars as a whole, digital asset growth has grown greater than anyone could have imagined. While it’s great to be familiar with cryptocurrencies such as Bitcoin and Ethereum, there is a multitude of other digital assets that can be of great value such as Litecoin, Decentraland, Algorand, and more. Digital assets could also be something as simple as a website domain or a social media account. With the NFT market on the rise and the value behind blockchain technology continually improving, investments in this field are hotter than ever, and there has never been a better time to invest.

Why are they important?

Digital assets prove to be unique as they offer an entirely new strategy to diversify one’s portfolio while making investing accessible to all people with an internet connection. Diversification is an essential part of providing security and safety to your portfolio as resource allocation across various investments provides overall stability. These assets do not require third-party validation to buy, sell or transfer. The inclusive and innovative technology that powers digital assets is appealing due to blockchain’s efficiency and capabilities to secure and expedite the investment process for all. 

Another great reason why adding cryptocurrencies to your portfolio is important is because they are providing the opportunity for never-before-seen yields. Your Sharpe ratio will likely improve dramatically, even with a smaller allocation, as digital assets see high returns. According to CoinTelegraph, Bitcoin has produced an average annualized return of 230% — more than 10 times higher than the second-ranked asset class.”  Although the future is uncertain, average annual returns this high are promising as universal adoption has only just begun.

Institutional Approval of Digital Assets

Traditionally, investors were apprehensive to buy crypto due to the intangibility of the asset. Recent events have seen both individuals and institutions more comfortable and interested in the power of cryptocurrencies. Wall Street firms such as Goldman Sachs, Morgan Stanley, JP Morgan, and more are realizing that their clients’ focus has largely shifted to digital assets and have adjusted their investment offerings in support of the rising need. As of April 2021, Mary Rich, Goldman Sachs head of Digital Assets, said the bank ultimately hopes to offer a “full-spectrum” of digital asset investments, including tokens themselves, as well as derivatives and traditional investment vehicles.” 

How to Get Started

As time progresses, adoption will likely only grow stronger and more normalized. The time to invest is now. Whether you’re an accredited investor looking to get started on adding digital assets to your portfolio, or a financial advisor looking to learn more about the space to better serve your clients, please visit www.sarsonfunds.com to learn more, or follow us on Twitter @SarsonFunds to stay up to date on all things crypto.

By Abigail Almonte

How Blockchain Technology Intersects with the Education Sector

It’s almost guaranteed you’ll receive some type of certification in your lifetime.  This could include a high school diploma, college degree, or even some sort of further education certificate. These small pieces of paper can cost hundreds of thousands of dollars to obtain, representing tangible proof that its holder has successfully completed training based on a certain curriculum. Although these diplomas and certificates hold high value and can be the reason why someone may land a job, they are often not as secure as other important documents. Many types of certificates can easily be misplaced, lost, stolen or duplicated, or even fabricated. Since these certificates possess such high value, there needs to be a way for people to validate the legitimacy of their credentials. After years of technological development, what is the solution? Blockchain technology.

When the COVID-19 pandemic struck the globe in 2020, it was the first time in history that college graduates were not able to attend their typical commencement ceremonies. 2020 threw a curveball most people were not prepared for, as diplomas now were sent via mail and crammed into mailboxes, resulting in a creased piece of paper for four years of hard work, mental, and financial commitments. Unlike most colleges, MIT had been utilizing blockchain technology for nearly 4 years. Not only does the university offer classes on the subject, but it also offers students the option of receiving a digital diploma in place of a physical copy. 

How does this change education?

You may be wondering, how is this beneficial? While your dreams of having your diploma framed in your office one day is still a valid aspiration, modern-day technology shows us that the physical way in which we obtain certifications is antiquated and inefficient. Due to their standard of prestige, diplomas are highly sought after, which could lead to the counterfeiting of them in order to obtain a higher position. An abundance of websites provide eager individuals with authentic-looking fake diplomas that were actually never earned, yet maybe enough to fool the average person. Having under-qualified individuals in the workforce can not only lead to HR troubles but can prove to be a large legal risk for a variety of professions. Think about it: Would you want a doctor operating on you without ever really going to medical school? Or an accountant who didn’t pass their CPA?

The current system for distributing diplomas is insecure. By accessing diplomas and other important credentials through the blockchain instead, credentials can be easily verified and traced back to the proper individual while revealing copycat third parties. Blockchain utilizes a peer-to-peer network that simplifies record-keeping through its immutable structure, automatically verifying record accuracy.

Other Use Cases

Aside from diplomas, certifications, and other badges, blockchain allows for other additional benefits such as the ability to store a variety of files ranging from important school documents like student files, medical and disciplinary records, test score files, and other transcript items. Starting at age five there is a multitude of grades and other data points looped into a student’s record. Through the blockchain, this information and data can be easily verified as an identifiable record, as opposed to storing the data in the back of an overcrowded file cabinet.  

Concluding Thoughts 

At Sarson Funds, we strongly believe in the capabilities of blockchain technology and how the capabilities of these technologies make for a more efficient and effective future. For more information on digital asset investing, cryptocurrency education, or blockchain technology, visit our website at www.sarsonfunds.com.

By Abigail Almonte

Bananas, Bitcoin, and Beyond: Blockchain Insights from Mark Cuban

Bitcoin-And-Beyond-Blockchain

Bitcoin-And-Beyond-Blockchain

You’d be hard-pressed to find a more recognized tech investor than Mark Cuban. The serial entrepreneur founded multiple 90s tech companies including Microsolutions and Broadcast.com before becoming a prominent investor in the 2000s. With many claims comparing today’s blockchain hype with the internet of the 90s, we’re investigating the ideas of leaders like Cuban who successfully emerged from that explosive tech era.

In recent tweets directed at popular gold enthusiast and Bitcoin critic Peter Schiff, Mark Cuban, owner of the Dallas Mavericks, wrote, “…BTC/Eth are technologies that can make you a banker, allow friction-free exchange of value, and are extensible into an unlimited range of biz and personal applications.” He continued in a second tweet, “What we are seeing built w/ crypto today is just proof of concept…” “…But Gold won’t ever change. This is why it will die as a SOV [store of value].” For those who recall the October 2019 headline “Tech Billionaire Mark Cuban Picks Bananas Over Bitcoin“, Cuban championing Bitcoin might come as a surprise. Fortunately, the billionaire has recently appeared on numerous talk shows to explain why he has newfound enthusiasm not just for Bitcoin, but also for trending cryptocurrency applications such as DeFi and NFTs. Let’s take a closer look at Mark Cuban’s latest thoughts on the world of cryptocurrencies.

DeFi

“DeFi”, or decentralized finance, is a quickly growing cryptocurrency category that makes financial services more accessible through decentralization. DeFi’s recent maturation seems to be making the choice between bananas and bitcoin more difficult for Cuban. As the standalone guest on March 9th’s “Blockchain & Booze” episode, Mark updated listeners on his position, saying, “In terms of utility, pre-DeFi, a banana had more utility than bitcoin because I can eat a banana. Now the utility has changed. There are so many things that you can do now. If I’ve got my bitcoin, whether it goes up or down in value, I can take a percentage of that and borrow and lend and earn income, and be my own personal banker.” So, while Mark still believes that “Bitcoin is an algorithmic source of scarcity and a store of value”, the broader DeFi ecosystem is what gives it real utility. 

As a true leader in crypto, Mark isn’t just subscribing to a popular narrative—he’s getting his hands dirty. According to an interview with Decrypt, he’s teaching himself Solidity. Solidity is the programming language native to the Ethereum blockchain, where most DeFi smart contracts have been built so far. While Mark isn’t shy about the risks of investing in crypto assets, he speaks enthusiastically about his predictions for the future of the space. In the same Decrypto interview, Mark imagines a future where smart contracts remove the need for inefficient intermediaries like insurance companies or accounting firms, which are vulnerable to human error and corruption. In short, Mark says, “…simplification of smart contracts is what gets me excited. Because now, all these SaaS [software-as-a-service] companies, all these different companies, I could see just disrupting the f–k out of them” Well put, Mr. Cuban. 

NFTs

While DeFi’s growth exploded in mid-2020, NFTs are the latest hot topic in crypto. In essence, “non-fungible tokens” are uniquely identifiable blockchain-based assets that grant their owner immutable ownership. By enabling digital assets such as art, music, video-game items, etc. the ability to give true ownership to consumers, many digital services are ripe for disintermediation. Though the value proposition behind NFTs may be unclear at first glance, Mark thinks they are more digestible among younger consumers. “The crypto natives, particularly Gen Z, their most valuable assets are on their phone…” “…That’s why people my age don’t fully understand that this is not a transition, this is not hard, this is natural.”, Mark wrote in his January 31, 2021 Blog Maverick post titled “The Store of Value Generation is Kicking Your Ass and You Don’t Even Know it”.

Ever the early adopter, Mark has already tried out creating his own NFTs. “I just took GIFs of me going to work out and I put them out there for $25 apiece, thinking no one’s gonna spend any money on this. Then I was asked, ‘What would you like your royalties to be?’ Oh my god. What a game-changer, that just changed the nature of selling anything digital, period, end of story.” Traditionally, the “starving artist” is paid only once for their work, even if it goes on to resell for millions. Similarly, musicians face restrictive gatekeepers and costly distributors to get their music to the masses. The “game-changer”, as Mark points out, is NFT technology’s ability to make digital collectibles more rewarding, both financially and intrinsically, for artists and collectors alike. 

What’s next?

We’ve previously covered why the unprecedented institutional interest in crypto assets is changing the game this market cycle. Now more than ever, we can look toward prominent investors for clues on the next cryptocurrency trends. As a veteran of the dot-com bubble, Cuban’s cautiously optimistic involvement in DeFi and NFTs is exciting for many crypto enthusiasts. Still, many wonder: Are we in a bubble? Only time can tell. Irrational exuberance seems inevitable for certain crypto assets, especially among NFT markets where prices may become more driven by financial motivation than subjective intrinsic valuation. But with leaders like Mark seemingly long on the space, we remain focused on finding the best projects in the crypto universe.

By Nathan Frankovitz

Crypto Kings and Queens: Emerging Leaders in the World of Digital Assets

Over the past decade, there has been a multitude of pioneers in the crypto space. As new advancements and updates are made each and every day, there is an overload of information to constantly keep up with. As the public looks to further understand the new comings of digital assets, a variety of crypto leaders have emerged as trusted experts in the industry. These people are developers, entrepreneurs, analysts, engineers, investors, and overall emergent leaders that contribute their knowledge, ideas, and expertise to further educate and grow the digital asset community. 

As 2021 has kicked into full swing, several young professionals have embraced the shift from a traditional financial system to one influenced by the power of digital assets. One individual in particular who has been taking the crypto world by storm is Flori Marquez. Since graduating from Cornell, Marquez has gone on to become the co-founder of BlockFi, making her way onto the Forbes 30 under 30 finance list. BlockFi is a very successful and rapidly growing crypto-lending platform that allows clients to open accounts with up to 8.6% APY, with revenues of over $100 million projected for the year ahead. Marquez keeps the public up to date on all things BlockFi, alongside her daily thoughts and opinions via Twitter, where her bio reads, “bridging the worlds of fintech and blockchain”.

While the capabilities of cryptocurrencies are spectacular, they would not be made possible without the engineers behind the protocols that make crypto transactions successful. Amiti Uttarwar is a 28-year-old Nevada native who works as a software engineer and coder of Bitcoin’s protocol in Silicon Valley. She strives to enhance the privacy of wallets in Bitcoin Core by studying the various transactions made on peer-to-peer lending platforms. Her efforts to help to facilitate the process of buying and selling cryptocurrencies will allow for further mass adoption and will aid the everyday utilization of digital assets. 

Another emerging leader who deserves some recognition is Jesse Peltan, he is the co-founder of HODL ranch, a bitcoin mining company located in Texas. Peltan alongside his team works to allocate their resources to lower the cost of bitcoin mining to make bitcoin more profitable overall. His innovative approach to harvesting natural windpower elements and renewable energy sources makes for low costs in Bitcoin mining, as demand for advanced efficiency of networks increases. Mining historically can be difficult with a variety of costs, alongside trials and errors of harvesting energy, distribution, etc, and Peltan works to facilitate that process.

Lastly, a dominant force in the crypto world is Brian Armstrong, CEO, and co-founder of Coinbase. As Co-Founder and CEO, Armstrong has grown Coinbase into the largest crypto-exchange in the United States. He has built Coinbase up to be a secure and compliance-oriented platform in which accredited investors trust. In tandem, the trust that Coinbase has fostered among the community has contributed to the recent institutional adoption we have seen. According to Forbes, “Coinbase is the first principal issuer of debit cards that allow customers to spend their cryptocurrency anywhere Visa is accepted and to withdraw cash from any ATM,” thus making cryptocurrencies much more accessible for everyday use cases. Armstrong has a strong presence on Twitter and social communities as well, voicing his updates, opinions, and other crypto-related discussions for the crypto-curious to see.

These are just a few of the many young individuals who have seen firsthand just how far the blockchain and crypto sector has become and ran with it. Though their own day-to-day hustle and bustle may differ, they uphold a shared belief that the future of finance lies within the capabilities of digital assets and cryptocurrencies powered by blockchain technology. At Sarson Funds, we believe in that same shared idea. To learn more about our investment strategies, visit our YouTube Channel, follow us on social media, or visit our website to learn more about our holistic educational approach to crypto and digital asset investing.

By Abigail Almonte

How These Pioneers Prove Women Belong in Crypto

Long gone are the days where women play a back-seat role in the workplace, on Wall-Street, or in investments as a whole. Since the birth of Bitcoin in 2009, there has been a strong incentive to change the name of the game. A newfound solution to making finance universally more accessible, not just for the few, but for all. In 2021, we still have a way to go before the crypto-space is considered to have a gender-equal ratio. However, we can at least note that decentralized finance allows for the potential of this growth in significantly better ways than the traditional finance system. Women seek to understand crypto, they’re curious and they’re ready to invest. Read along to discover why more women are turning towards digital assets and how they are carving their paths in this industry.

Traditional Finance

There are countless challenges alongside leveling the investment playing field and achieving financial freedom in our traditional system. In 2020, the national pay gap in the United States is still roughly 18%, with not a single US state paying females higher than males (on average). Therefore, resulting in increased difficulties for women attempting to build their 401k’s and plan for retirement in a way as effectively as men can. Due to the large disparities in active income, more and more women are looking for ways to invest in forms of passive income…cue cryptocurrencies. 

How Crypto Supports Females

The main differentiator between digital assets and the traditional banking system stems from the blockchain. Decentralized finance allows for transactions to occur without passing through a third-party intermediary, granting individuals complete control and freedom over their own assets. Not only is this more efficient, but it is also cheaper and provides a sense of security that is often overshadowed when interacting with third-party sources. Gemini conducted a survey that found “Among those planning to invest in crypto, 40% are women.” Additionally, “ 39% of millennial women say that they would be more interested in crypto if they knew it could make finance more accessible.” These numbers thus prove not only the desire but the intense need for women to feel empowered by their financial options and decisions, instead of discouraged like other, often mistreated minorities do in the traditional sector. 

Women in Crypto

Although there is progress to be made, we wanted to highlight some special women who have redefined the cryptocurrency marketplace. First off, we have Elizabeth Stark. This double-ivy league graduate co-founded the company Lightning Labs in 2016. Lightning Labs is a “second layer” protocol that helps make the blockchain run more efficiently. Lightning Labs is just one of her many accolades as she is concurrently a research fellow making decisions informing public policy about crypto. One of Stark’s famous quotes is “Welcome to Bitcoin, you can’t tell people what to do.” Stark is a huge advocate for all things crypto because of the financial freedom crypto empowers, as the removal of intermediaries makes for a more accessible future of finance. 

This article wouldn’t be complete without the mention of Katie Haun, a former partner at Andreessen Horowitz. She was introduced to Bitcoin in the currency’s early days, utilizing blockchain’s capabilities to investigate criminal activity. Flashforward a decade and Haun is now considered “The Face of Credible Crypto” as she serves as an independent director on the board for the now billion-dollar company, Coinbase. When giving advice about crypto to the public she says, “Don’t let yourself think ‘Oh, it’s too complex, I don’t want to go dive deep in it.’ You don’t need to dive deep in it, just go learn something about it that you didn’t know.” Haun encourages all individuals to be patient with the crypto space as it is ever-changing and evolving. 

Another female cryptocurrency advocate and partner at Andreessen Horowitz is Arianna Simpson. Simpson founded the investment fund Autonomous Partners, which specializes in cryptocurrency and digital asset allocations. When it comes to crypto, she wants to remind women “it doesn’t take a P.H.D to understand it,” it just takes a will to learn.

End Remarks 

These women and many more are firing up the female community to feel empowered to redefine wealth and educate themselves towards reaching financial freedom. At Sarson Funds, we believe in transparent and unbiased education for all individuals regardless of gender. To learn more about our investment strategies visit our YouTube Channel, follow us on social media, or visit our website to learn more about our holistic educational approach to crypto and digital asset investing.

By Abigail Almonte

Decentralized Exchanges: DeFi Lending Platforms in the Crypto Space

Lending is an integral part of finance and banking that helps give people a boost in reaching their financial goals. Individuals or institutions lend money to those who need it for a variety of reasons. Whether that be to start their own business, to go to school, to buy a home, etc. Whatever the reason, lending helps facilitate the flow of money in the economy as it is continually borrowed and shared. These sorts of traditional lending practices are also available in the crypto space, as the use of lending platforms has become increasingly popular in crypto today. 

The biggest difference between traditional and Defi lending is that typically getting approved for a loan by a bank or other financial institution can prove to be tedious, requiring lots of documentation. Not to mention, time-consuming as they can take days or weeks to be approved. In contrast, DeFi lending is peer-to-peer (P2P), facilitating a direct relationship between both parties.  Defi lending consists of lending cryptocurrencies in exchange for interest. This is an opportunity for individuals to grow their digital asset portfolios as they continue to see steady growth in the market overall. These trades consist of both the lender and borrower in a transaction backed by collateral in the form of crypto assets. Lenders will utilize smart contracts in order to make their assets available for lending. Lending exchanges can be conducted and implemented through a variety of different DeFi platforms such as Aave, Compound, SushiSwap, Uniswap, and many more. These platforms allow and support various different cryptocurrency pools including Ethereum (ETH),  DAI, USDC, USDT, etc. 

Aave

Coming to fruition in 2017, Aave is a secure and audited DeFi lending platform. This liquidity market protocol makes it easy for both borrowers and lenders to use their services. With its open-source contract, decentralized apps and other third parties can access the protocol as well, driving up value. The protocol is currently valued at over $4.8 billion dollars with assets such as DAI and USD coins seeing millions borrowed. Borrowers in AAve receive LEND tokens whereas Lenders will receive aTokens, each providing separate benefits. Lenders will benefit from APY (Annual Percentage Yield) percentages based on borrowers’ interest rates. On the other hand, borrowers will be freed of any transaction fees when using the LEND token. Additionally, if a LEND token is used as collateral, all borrowers will be eligible for a discount. These perks, along with AAve users’ ability to compare and select variable or stable interest rates make it a user-friendly, flexible protocol. 

Compound 

Compound is a DeFi blockchain-based interest-based protocol that securely allows individuals to borrow and lend crypto without having to deal with the hassle of third parties. As your crypto assets are lent to the Compound wallet, you will gain interest on those assets. In terms of borrowing, Compound makes this feature incredibly accessible to any person, as there is no administered credit score check as traditional banks may have. When lending or borrowing, one will be given ‘C-Tokens’ that can be manipulated in a variety of different decentralized applications. Additionally, the COMP token is governed by users that own 1% or more of the COMP protocol. 

SushiSwap 

With accessibility at the forefront of their mission SushiSwap’s motto “with sushi, everyone can be a chef” has held true. SushiSwap has become an increasingly popular decentralized exchange protocol, since forking from Uniswap in August 2020. This protocol runs on the Ethereum blockchain and is an automated market maker (AMM) exchange. Many people turned to SushiSwap after the older popular protocol, Uniswap, forked. Unlike Uniswap, Sushi created their own native token in order to increase profits from returns, gaining them an abundance of users. Once you download a crypto wallet, you will be able to see the returns each pool will provide and which ones you may want to add to, or swap other tokens for. Uniswap has since kicked things into high gear, releasing their native token, UNI in September of 2020. Their main differences today include user experience, liquidity rewards, and overall revenue.

While there are many valid debates for which Decentralized Exchange (Dex) is the best, or most functional, Decentralized Exchanges will continue to gain popularity as the user has the complete ability to control their funds, providing a more flexible and open way to lend and borrow money as a whole.

By Abigail Almonte

Sarson Funds’ Crypto & Income Strategy is Best Performing Fund in Q4 2020

Sarson Funds Crypto Strategy Award

Sarson Funds Crypto Strategy Award

Key Takeaways:

  • Crypto fund managers saw record performance numbers in 2020, according to CryptoFund Performance.
  • Sarson Funds’ Crypto & Income Strategy received top performance honors for Q4 2020.
  • Financial advisors are seeking new strategies for investors as the blockchain ecosystem grows and regulatory clarity is enhanced.

According to Crypto Fund Research, Sarson Funds’ Crypto & Income Strategy (Ax Momentum, LP) was the best performing crypto fund and best performing crypto quant fund of Q4 2020, recording a 315.9% return for the quarter and a 365.7% return for the year. This award was picked up by Yahoo in a recent release, here.

The Crypto & Income Strategy is the first in the cryptocurrency space to turn one of the biggest complaints about investing in cryptocurrency – volatility – into a useful feature: current income. The strategy does this through a covered call writing program on some of the largest cryptocurrencies trading on established US-based exchanges as well as staking and masternodes. As financial advisors look to fill the void for client yield, the Crypto & Income Strategy has seen a surging amount of interest from investment managers.

“Part of our responsibility is to provide investors with both unbiased education and diverse transparent strategies to compliment the developing cryptocurrency regulatory and market landscape. With this comes new opportunities, and we expect other top performing crypto fund managers to look at expanding digital asset investment options as the asset class continues to mature,” Sarson Funds CEO John Sarson said in a statement.

For more information about us and cryptocurrency investor education, please visit www.sarsonfunds.com, or schedule an appointment with one of our teammates, here.

By Liam McDonald

Understanding Decentralized Finance: DeFi 101

Decentralized Finance 101

Decentralized Finance 101

In 2020, the cryptocurrency market cap surpassed $1 Trillion. This year, you owe it to yourself to learn how you can get involved in digital asset investment opportunities.

We get it. We live in a digital age full of constant technological changes – keeping up with these changes can be overwhelming. This is especially true for digital assets like Bitcoin. With access to an abundance of information on the topic, sometimes it can be hard to make sense of new terminology and the cultural memes born from societal change. As this ecosystem surfaces, it can be hard to understand even the most basic terms that industry experts take for granted. 

Despite the seemingly overwhelming nature of the digital asset industry, it really isn’t so complicated once you learn the basics. In our view, once you understand the basics, you’ll see that adding digital assets to your portfolio is one of the most critical investment decisions you’ll ever make. That’s why we left Wall Street – to bridge the gap between crypto and traditional finance. You don’t want to be on the sidelines for this emergent industry. 

Start your cryptocurrency and blockchain education with some basic themes and terminology, here:

Decentralized Finance (DeFi)

Decentralized Finance, also known as “DeFi,” refers to a broader series of financial services that uses blockchain technology to reimagine traditional finance. Using publicly available and verifiable ledger systems, DeFi systems support financial transactions that remove many of the costs of counterparty risk. For example: instead of paying an organization to act as an escrow service, you’d use software known as a smart contract to verify financial transactions. 

One example of how DeFi is changing the world is how money is transferred through it. Global remittances total nearly $700 billion a year. Remittance services typically charge high fees and take time to transfer money from one country to another. With DeFi, those transactions can be done rapidly, for a fraction of the cost, and are done directly from peer to peer, offering a more private and secure transaction. 

According to the OCC, DeFi is on pace to overtake traditional financial services.

Smart Contracts 

But what exactly is a smart contract? And why does it matter whether there are 3rd parties involved in a transaction? Smart Contracts are a new type of software that facilitate a cryptographically secured transaction on a blockchain. Smart Contracts function as rules written in code which dictate the execution of the transaction. 

Decentralized Applications – DApps and DEXs

Decentralized Apps (DApps in the crypto world) are unique applications that use smart contracts for different purposes. Smart Contracts have allowed for the creation of decentralized exchanges (DEXs), which are smart contracts that facilitate peer-to-peer market making using complex smart contracts, rather than relying on 3rd party clearing houses, broker/dealers and bank custodians. These applications run exchanges using a permissionless network (no 3rd parties are involved), therefore making DEXs secure. Popular DEXs include Compound and Uniswap.

You may be wondering, why wouldn’t you just use a centralized exchange like Robinhood or Coinbase? The real value behind decentralized applications like a DEX is that you own and maintain custody of your asset up until the transaction takes place. The application cannot restrict your ability to transact with any asset as what recently occurred with the Robinhood’s restriction of Gamestop stock. 

Becoming your own Bank: Decentralized Lending Platforms 

Lending platforms offer a flexible alternative to traditional banking services. They provide users the ability to borrow and lend cryptocurrencies on a peer-to peer network, insinuating the idea of “being your own bank.” Privacy is heightened as classic bank requirements such as identity and credit scores are not required through the platforms.

Stablecoins 

Most people are familiar with Bitcoin and the cryptocurrency industry because of industry wide price volatility. Stablecoins were created as a way to mitigate volatility risk in the DeFi space. These coins are pegged to the value of traditional fiat currencies. For example, USDC is a stablecoin pegged to the U.S. Dollar.

Decentralized finance is in for a wild ride in 2021. As you follow along, it will be critical to be educated on what powers these technological advances and how they are changing the future of finance.

Final Thoughts

At Sarson Funds, we understand that you’re not going to jump straight into a new investment opportunity without educating yourself first. That’s why our core mission is to thoroughly educate financial advisors on this emergent investment class with Wall Street-grade standards. To learn more about how digital assets can support your investment objectives, stay tuned for more educational materials or reach out to schedule an appointment with one of our experts today.

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For more updates on the world of digital assets, follow the journey via our Twitter, LinkedIn and Facebook, or here at: https://www.sarsonfunds.com

By Abigail Almonte

Dogecoin: “The People’s Crypto” Examined

Dogecoin Value Proposition

Dogecoin Value Proposition

In the wake of Robinhood and other stock brokerages putting a hold on purchases of GME, AMC, and other stocks, a new movement has been started to buy Dogecoin. The movement largely traces back to popular Twitter account @wsbchairman posting a tweet on January 27th saying “a lot of you are talking about Dogecoin? What’s that? A meme crypto?”

In many ways, a meme crypto is the perfect way of describing Dogecoin. While it may not have many fundamentals or active developer activity behind it, it certainly has a social movement behind it. And that social movement is currently being lead by Elon Musk, Gene Simmons, Soulja Boy, and a whole community of Reddit investors who have proven they are a force to be reckoned with when it comes to moving financial markets. Even well-respected crypto investors have started to chime in and accept the idea that Dogecoin could really become “the people’s crypto” because of the lack of involvement from hedge funds and traditional financial institutions, further contributing to the “people’s currency” narrative.

Could the prospects of a truly fair token distribution and grassroots investor growth be enough to outpace the growth of bluechip DeFi protocols with better fundamentals and real use cases and value accrual? It will ultimately be up to the market to determine, but it certainly doesn’t seem like a smart bet to gamble against Elon Musk and the growing prevalence of meme culture.

By Bradley Whitton

Dogecoin logo source: https://github.com/dogecoin/dogecoin