30% Daily Returns! Impossible, But I Had to Learn More.
This story was written with the assistance of an AI writing program.
First, I never say “never.” Instead, I always ask myself, “How could that happen?” “How could that be?” “What if that were true? What would have to be in place to do that?” Thus, my quest began.
In the traditional trading world, people typically earn returns of around 5% per year, give or take a bit. Surprisingly, over 90% of all traders actually end up losing money. At least, that has been my experience since I started in finance and investments.
Making money was hard, and making a profit as a trader was even harder. Outperforming the Dow Jones Industrial Average was a rare accomplishment, and those who consistently did so were considered amazing by their peers. Or sometimes, just plain lucky, like me a couple of times.
A couple of years before the pandemic, I stumbled upon a realm of trading that promised returns of 10% per month, week, or even per day! I was skeptical but had to investigate.
These returns were all related to the crypto market, which I knew nothing about at the time. These claims seemed truly outrageous, especially considering that renowned investors like Warren Buffet and Charlie Munger were famous for their sustained average returns of over 30% year after year.
10% a month? Not possible. A week or a day? Incredible. It seemed like pure fiction. So I thought.
However, as I mentioned, I had to delve deeper into it. I discovered that these returns were often associated with activities known as “yield farms” and other similar concepts, where people lock up a particular crypto coin for a specific period.
As I dug deeper into this area, I quickly realized that the majority of the claims offering such astronomical returns were actually frauds, scams, or Ponzi schemes. However, a few legitimate organizations seemed to generate high returns. I was intrigued and wanted to understand their methods.
This exploration led me into a previously unknown world to me — trading on the blockchain. Here, significant transactions could occur between online exchanges, where coins were bought, sold, or lent at varying prices. This was made possible by engaging with “smart contracts,” which are self-executing coded documents verified by the blockchain’s consensus mechanism.
A smart contract is like a digital agreement that executes itself automatically once certain conditions are met. It operates securely due to the consensus mechanism, which involves multiple computers validating and confirming the contract’s execution.
As I continued my research, I discovered that substantial gains could be achieved by purchasing or borrowing large quantities of a coin from one exchange where it was offered at a low price and then selling it on a different exchange at a higher price. These trades could occur within minutes, allowing for frequent repetitions throughout the day.
Intrigued, I decided to study the coding behind this phenomenon, which made such trading strategies possible. What I realized was that the highest returns were not achieved by superior trading skills but rather by superior coding skills. The focus shifted from trading expertise to coding expertise. The trade itself became a means to engage the code.
This reversed the traditional trading process: instead of using a system to conduct a trade, the trade became a way to engage the system. The system produced the results, and these results could be predetermined through coding.
Generating returns became a result of the code being engaged, not solely dependent on the trade’s profit or loss. This could only happen when someone controlled both ends of a trade — the asset being traded and the mechanism performing the trading.
In the crypto world, the mechanism is the smart contract, which someone or something has coded to execute the trade. However, it is crucial to distinguish between honest and legitimate operators (which are few) and scammers (which are many) in the crypto realm.
To navigate this distinction, it’s important to
trust your instincts. If something doesn’t feel right, it’s best to avoid it, regardless of what anyone, including myself, says. If an opportunity sounds too good to be true, it usually is, even in the crypto world. If you can’t verify the legitimacy of an investment opportunity, it’s better to stay away.
When considering any investment, remember to never invest more than you can afford to lose. Financial markets are unpredictable, and there are risks involved. Past performance does not guarantee future results, and it’s essential to be aware that a large percentage of individual traders end up losing money.
In summary, trust your gut, conduct thorough research, and seek advice from trusted sources. Be cautious of unrealistic promises and always prioritize your financial well-being and security.
P.S. Oh! That 30% daily return? Yeah, it was a scam.
