A Beginner’s Guide To Passive Income during Bear or Bull Markets, Via ANNEX Finance

ANNEX Finance is a decentralized platform (DeFi) that works to eliminate the traditional problems linked with financial transactions in a centralized system (banks and third parties).

What does ANNEX Finance do?

Based on the Binance Smart Chain & Cronos blockchain, ANNEX Finance provides a platform for lending and borrowing cryptocurrency. The company chose to use Binance Smart chain and Cronos because of security and cheaper transactional costs. Cronos is new EVM compatible new blockchain built and supported by Crypto.com. By adding a lending protocol on a new blockchain it shows that ANNEX Finance team is committed to deliver. 

Benefits of using ANNEX DeFi:

• Security

Your money is more secure in the digital wallet that you control than it would be in a bank and the risk of it getting hacked is also removed because you are in control of your own wallet. ANNEX Finance is audited by the largest and most respected audit firm Cetrik. 

• No fees

There is no large fee needed like a bank or third party would charge you for services rendered.

• Epoch rewards for just holding tokens in the wallet:

The ANN token also offers epoch holding rewards. If a user would hold ANN tokens in his/her wallet, he/she will earn 0.2% APY daily. The reward could be claimed after holding ANN for 30 epochs, meaning 30 days as 1 epoch equals 1 day.

• Quick transaction

The transaction will be quick, merely in seconds and you wouldn’t have to wait for days for clearance. You would have complete freedom to do the transaction irrespective of who you are or where you are.

• Approval

There is no need for bank approval to do a transaction on the DeFi platform. You can keep records and have complete control of your transactions.

How does ANNEX Finance work?

Before we delve into deeper details you must be clear that ANNEX Finance’s token ANN is not just a cryptocurrency, but ANNEX Finance provides a platform for crypto transactions. Which is the total sum of lending, borrowing, staking, and depositing crypto across this platform also called the Total Value Locked (TVL).

For understanding, we have broken down the lending and borrowing procedure into small fractions below:

• APY vs APR:

First, we will differentiate between APR and APY and explain how APY will benefit you more if you want to take advantage of ANNEX Finance Defi.

APR stands for Annual Percentage rate and measures the rate of interest charged on your loan. Whereas APY stands for Annual Percentage Yield and measures the amount of interest (compound interest) over your investment like the money you’ve deposited into a savings account. 

Both are measures of interest, but the main difference lies in the latter, which uses compound interest for greater benefit. APY is clearly mentioned on each asset on ANNEX Finance platform, taking out any need for calculation or confusion.

• Compound Interest:

In addition to the interest earned on your deposit, compound interest will earn you interest on interest. It could be daily, monthly, quarterly, or annually.

In place of cash deposit, ANNEX Finance DeFi uses crypto and utilizes APY to earn interest found on the demand of a particular asset. That means you would be earning more by the end of the year by using ANNEX Finance

• Stablecoin:

A DeFi platform uses stable coins which are tethered to real-world assets like gold, USD, or even cryptocurrencies. They are also less volatile than crypto. ANNEX Finance Support borrowing and lending of several Stable asset including BUSD, USDT, USDC etc. 

• ANN token:

ANN is ANNEX Finance’s native token which could be used to trade NFTs or earn interest depending upon the market value of an asset. The ANN token also offers automatic holding rewards. If a user holds ANN tokens for more than 30 days, on the 31st day user will receive a 6.2% APY return on the holdings followed by 0.2% additional APY on each additional day. ANNEX Finance is completely decentralized, using ANN token as governance token. 

In an additional step, we will further describe to you how DeFi could be used to lend and borrow crypto:

• Lending & borrowing on DeFi:

Crypto could bring you an additional yield if you invest it on a platform like ANNEX Finance that utilizes APY, instead of just holding it in your wallet and waiting for it to appreciate in the market.

In ANNEX Finance DeFi platform, the crypto loan is taken in the same way as it would be in traditional lending. There is just the difference of additional paperwork which is not required in ANNEX Finance lending or borrowing. It is simple and efficient way of earning more on crypto assets.

The users can lend supported crypto assets (See the list below) by depositing it into the ANNEX Finance lending pool. The borrower is matched through an algorithm to the lender. Then staking some of their cryptos, the borrower could be lent money through initiating Smart Contract (coded agreement for exchange) between both parties. The borrower has the benefit of instant liquidity of the lending pool and the lender will receive the interest as defined in APY section of the asset  in the platform.

$ANN tokens will be received against the collateral crypto, directly into lender’s wallet. At the end of the Smart Contract, the token would be redeemed and the collateral crypto would be returned to the borrower. Hopefully, by then that staked crypto asset would have also appreciated in the market. 

• Buy-Back & Burn:

In a centralized system buy back means the organization is buying its shares to raise the price of its stocks. This could be done either for keeping other holders away from gaining the remaining shares or to raise the price of the remaining shares. The concept of Buy-Back is almost the same in the decentralized system. ANNEX Finance DeFi platform uses this concept to attract investors, raise the value of their $ANN token, and increase liquidity and demand which in turn will lower the price volatility.

ANNEX Finance uses a certain percentage of the profit to buy back the $ANN tokens or reserve the amount for other important tasks. 

Every month a certain amount of $ANN tokens are burned to reduce the circulation. Buy-Backs and Burns are very attractive attributes of any project. Savvy crypto investors always look for the projects with Buy Back or Burn plans, Binance’s native BNB token is a classic example of a token that is quarterly burnt to reduce its token supply. As there is no manipulation involved in the process, the ANNEX Finance investors can ask for proof of burn from the team but usually team is happy to announce it on Twitter and Telegram themselves. From Monthly burns ANNEX Finance till now has burnt 381.57K ANN tokens, removing them completely from the supply.

Recently ANNEX Finance has been listed on LBank and the team has announced a $100K Buy-Back on ANN token to create liquidity. In addition, the team is also holding a trading competition on LBank worth more than $20K ANN token. 

• Automated Market Maker (DEX)

ANNEX Finance DeFi platform also uses DEX to hold an open auction and provide a chance to the user to trade and mint Liquidity Tokens and increase ANN price and volume. This benefits the users in earning high APY from the transaction fees generated by the auction. The platform also offers yield farming of ANN tokens to the users so that they can gain an additional amount.

• Yield Farming:

Yield farmers continuously search for crypto markets and track APY. When they think they’ve found the best opportunity, they would lend their crypto assets to earn more.

• Case Study:

When ANNEX Finance user borrows cryptocurrency, they have to lock their assets or crypto as collateral and can borrow 80% of the total value of the collateral. Like if they are borrowing $80, they would have to lock $100 in collateral

For example, if a user lends $1000 worth of BTC, user will be able to borrow 80% of the value of his asset ($1000 worth of BTC) which is $800 worth of USDT from ANNEX Finance. When the user returns $800 USDT back, they get their $1000 BTC back, this is a great way to increase you buying power without having to sell your crypto currency. The user has to be aware of the collateral ratio percentage of the asset, which they have staked. Otherwise, if they are unaware of it and the collateral value of the asset drops, liquidation will happen.

Liquidation UI is also available to community so users can monitor and liquidate the shortfall accounts via UI. Liquidation UI is integrated into Annex DAPP. https://liquidation.annex.finance/liquidator

Summary: 

The native token $ANN features multiple usage allowing users to not only earn passive income by supplying collateral and liquidity but also allows users to control governance of the protocol, enable purchase and bid of NFT collectibles, as well as Auction currency.

$ANN is a governance token with total supply of 1 billion Tokens, ANN started with a fair launch distribution to the community in Q2 of 2021 and the first governance AIP-1 renounced protocol ownership thus allowing Annex community to take control of the protocol.  Annex Unitroller and aTokens ownership were also transferred to Timelock and GovernorAlpha, making it completely decentralized. 

While any user can use ANNEX Finance Lending protocol and earn juicy APYs, Investor holding $ANN tokens can earn from 3 ways:

1. By putting ANN tokens in single farm 
2. By putting ANN token in auto compound pool 

3. By holding ANN tokens in Wallet via epoch reward.  User earns 0.2% daily on their ANN holdings in their wallet daily. The reward is claimable after 30 epoch, 1 epoch is about 1 day approximately.

• List of assets on the BSC:

• Assets supported on Cronos Chain:

USDT, USDC, DAI, BUSD, TUSD