What You Know about LBank: How to earn interest by holding coins, making 10% profit easily

Introduction: Contracts are repeatedly liquidated regardless of long or short positions, and leverage and options are so complicated that they are daunting. Young investors, do you have a lot of questions? Is there any more reliable investment method than financial management in a bear market? Lianxiang Finance specially invited LBank co-founder He Wei to be a guest in the What You Know live broadcast room, to show you how to earn interest by holding coins, and earn 10% income with one click regardless of the bull or bear market.

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LBank officially started its research and development in December 2015 and was officially launched in October 2016. LBank's vision is to build a digital asset trading platform based on the world's top technology, to build a ledger bank based on the blockchain world, to provide global users with safe, professional and convenient digital asset exchange services, and to provide a wealth of digital asset financial derivatives and diversified application scenarios.

The following is the transcript of the interview, which has been slightly edited without changing the original meaning.

Guest: He Wei (LBank co-founder)

Host: Cousin (Link to Finance)

Time: June 5, 16:30PM

Topic: How to earn interest by holding coins, making 10% profit easily

Live content

Cousin: Hello everyone, I am my cousin, the host of today’s live broadcast. I am very honored to invite LBank co-founder He Wei to be a guest in the What You Know live broadcast room of Lianxiang Finance. First of all, please allow our handsome Mr. He to introduce himself to everyone.

He Wei: Hello everyone, I am He Wei from LBank, an old investor in the cryptocurrency circle.

Q1. Cousin: In the past two years, competition among exchanges has become increasingly fierce, and competition in leverage, contracts, financial management and various derivatives has also entered a white-hot stage. What differentiated strategies do you think exchanges need to adopt in order to succeed in the future?

He Wei: Whether it is leverage, contracts, or financial management, these are just tools. But for the entire industry, the most important thing to truly break out of the circle is the wealth effect.

Why is it that Trump is generally considered the worst president in the history of the United States, but he still has a good support rate among the American people? One of the important reasons is that after he took office, the US stock market continued to rise and hit new highs, giving the American people this visible wealth effect.

Therefore, all tools only provide a possibility for wealth growth. The most important thing is that to really go beyond the circle, the wealth effect brought by value is still needed.

The biggest difference between the cryptocurrency industry and other industries is that we can look at the history of the cryptocurrency industry. The most people rushed into the market during the bull market at the end of 2017. Everyone shouted for the blockchain revolution and poured in. But it is terrible that as we have more and more projects and blockchain technology develops, the number of people involved in blockchain is decreasing. And we can no longer find projects like ETH and EOS that have aroused consensus among everyone. We have been complaining internally that now the life cycle of a project, even if it is one week, is a good project. So as far as exchanges are concerned, I think to stand out, it is not by products. It depends on the wealth effect and the long-term development of high-quality projects.

Q2. Cousin: Speaking of derivatives, the new product for earning interest on holding coins recently launched by LBank is also very eye-catching. Could you please introduce this product to everyone, Mr. He?

He Wei: As for the product of earning interest by holding coins, we can actually have a general understanding from the name. As long as users hold these tokens on LBank, they can obtain the income of these tokens.

The biggest difference from other platforms is that this product does not require users to transfer funds into a certain "pool". As long as users hold these tokens on LBank, they can get this income. Whether trading or participating in other activities, it will not affect this part of the income.

Therefore, the biggest highlight of this product is its “zero perception”. After users participate in this activity, they can obtain the benefits of this product every day without any operation or even awareness of the existence of this product.

Q3. Cousin: How is the 10% yield of LBank’s coin-earning product calculated?

He Wei: This return is not actually calculated, but is actually achieved by quantitative institutions.

This is about the logic behind the product. After the user participates in the current account, this part of the assets will be handed over to the quantitative institutions in the industry on three major platforms for arbitrage strategies. Of course, due to the capacity limitation of the arbitrage strategy, we limit the initial holding of the currency to only 1000W USDT equivalent capacity. As far as the overall market is concerned, we have currently surveyed nearly 100 quantitative institutions around the world, and the average return of the routine strategy is between 15% and 25%. We selected some of the particularly high-quality ones and required the other party to pay a part of the "inferior funds" and use their own assets to ensure the safety of user assets. Then we designed this product. Therefore, this part of the income is based on the actual arbitrage of the quantitative institutions.

Q4. Cousin: Which quantitative strategy teams are currently cooperating with LBank's coin interest-bearing products? How do you conduct risk control on these quantitative teams?

He Wei: We have done a wave of PR for the quantitative team we are currently working with in the past two days. If you are interested, we will update you later through newsletters.

We generally have several requirements for the risk control of these quantitative institutions:

1. All quantitative teams must be willing to stand up and face users, and have long-term management experience and a certain scale of fund management volume.

Second, we require all quantitative teams to pay "subordinate" funds. Once the entire product experiences a drawdown or loss, the subordinated funds will be used to bear the loss. When the subordinated funds are almost exhausted, LBank will force liquidation directly, requiring the quantitative team to make up the subordinated funds before continuing trading.

3. We require all quantitative teams to adopt arbitrage strategies. We do not allow unilateral opening of positions or betting on trends. In extreme market conditions such as March 12, these teams must have stable profits and are not allowed to have large drawdowns.

4. We require that the quantitative team can only trade on the three trading platforms allowed by LBank. Other platforms are not allowed to place any assets there, even if the returns are high.

Q5. Cousin: Compared with similar products launched by other exchanges, what are the advantages of LBank’s new coin holding and interest-earning product?

He Wei: As for the advantages, there are three main aspects:

The first thing I put is risk control. Whether it is the requirements for subordinated funds of quantitative institutions in advance, or the monitoring and forced liquidation of net value by LBank during the process, including the risk reserves we prepare ourselves afterwards, they are all our control over risk control. Regardless of the returns, the first thing we have to ensure is the safety of user assets.

The second is the product design. All other similar products require users to transfer assets, although it is already quite convenient. But LBank does it with zero awareness. After users participate in the currency holding and interest earning, there is no obstacle to trading, withdrawing currency, or participating in various activities.

The third is the return. We have compared all similar platforms in the industry and found that most current deposits are 1%, and some are 3%. LBank’s current 10% is a dimensionality reduction attack.

Q6. Cousin: Faced with extreme market conditions such as "3.12" and "6.2", will it have a relatively large impact on users who hold coins for interest? What measures will LBank take to ensure the safety of user assets?

He Wei: First, in terms of strategy, we just mentioned that we require all strategies to be arbitrage strategies. Even if we encounter extreme market conditions like March 12, the strategy of opening positions on both sides will basically not result in too much retracement and loss.

Secondly, who is responsible for risk control? As a platform, LBank is the custodian and risk controller, and we are responsible for the safety of user assets. As for institutions, we are not responsible for their losses. So once an extreme situation occurs, resulting in a product retracement and the institution's subordinated funds suffering losses, LBank will not be lenient when forcing liquidation. If the institution itself is responsible for risk control, it will lead to the other party being unwilling to bear the loss. Therefore, the core of risk control is who is responsible for risk control and where he stands.

Q7. Cousin: As Ethereum moves towards the 2.0 era, the Staking market is seen as a new blue ocean. Is LBank considering expanding other financial application scenarios in the future?

He Wei: As far as I know, Staking is too early to be a mature product because of its high threshold. Financial management has always been the first choice for many users in a bear market. Therefore, LBank’s current main layout is at the financial management level. However, compared with Staking, we prefer these financial products with zero threshold for users.

Q8. Cousin: Faced with a variety of financial derivatives, how should users maintain rational investment?

He Wei: There is a most basic way to judge, "whether the logic is reasonable". There is no such thing as pie in the sky in any market.

Taking LBank's interest-bearing coin as an example, the user's income in the first month is 10% annualized. We predict that it will be 6%~8% in the later period. Quantitative institutions can use this part of assets to obtain arbitrage income of about 15%~25% in the secondary market. LBank can obtain a large amount of user asset deposits, which can make more users' assets in LBank and get used to trading in LBank. Therefore, this plan is a win-win for all parties. This is the so-called "whether the logic is reasonable".

If there are other products where you don't know the other party's benefits, don't know why they do such a thing, and feel that they are giving money away, such products are very irrational and risky.

User free question

Netizen Xiao Q: Can I deposit and withdraw the currency at any time to earn interest? How can I withdraw the currency before the deposit expires?

He Wei: There is no problem with deposits and withdrawals. As long as you click to participate, the assets in your account will be considered to have participated in the currency holding interest, and the subsequent income will be directly transferred to the account every day. Your assets can still be traded, withdrawn, or participated in various activities, and will not be affected. This should be the biggest difference between us and other similar products. There is no need to deposit, so there is no need to withdraw, but there is still income.

This AMA live broadcast ends here. Thank you Mr. He from LBank for your wonderful sharing, thank you for your enthusiastic participation, and also thank you for the support of all the media partners of this live broadcast. See you next time~