What is Loom Network?
The LOOM network aims to help Ethereum scale by building a central infrastructure platform. The network gives developers the opportunity to run large scale applications by creating their own blockchain applications without even having to understand all there is to the blockchain technology.
The LOOM network uses SDK as a foundation for developers to build their blockchain applications. The SDK operates a DAppChain; this can make use of alternative consensus rule sets that provides higher scalability for Ethereum.
Besides allowing developers to create their own blockchain applications, the LOOM network SDK also lets developers customize the scalability and security tradeoffs to their DApps by allowing them (the developers) choose consensus algorithms and rulesets.
The LOOM token:
The LOOM token like other cryptocurrency tokens can be used for the purchase of all sorts of products and services if all parties involved with the transactions are comfortable with its use. The token is acceptable for all products and services offered by the LOOM network; these services include the following:
- Payment for running DApps: developers can pay for running their applications on the zombie chain using the LOOM tokens. Funding for the cost of running applications by developers takes off the responsibility of paying gas cost by users.
- Payment for Zombie battleground games: you can earn new cards by just playing the game. However, if you are short on time, you can buy cards using money or by staking LOOM tokens to get game membership and free monthly packs of cards.
- Payment for LOOM SDK enterprise support: enterprises who want hands-on support from the LOOM network development team while running their standalone DAppChain, can pay a premium sum of 100, 000 LOOM token a year.
The services you can purchase with the LOOM token are not limited to those as mentioned above. A quick check on the network website will reveal all other services.
Where can you buy the LOOM token?
You can buy the LOOM token from a range of cryptocurrency exchanges such as Binance, Coinbase pro, Kucoin, Bithumb, Upbit, and Bittrrex.
How to earn passively from the LOOM network:
Earning passively is the rave of the crypto world now. What is passive income? More people are beginning to seek ways to make more profit without having to work for it actively; more like investing and watching your investment grow interests and those interest growing more interest.
In light of this, the LOOM network offers an opportunity for its users to earn passively through staking and delegation. Let’s dig in.
- Lending Cryptocurrencies for passive income.
- Margin Funding for crypto passive income.
- Crypto mining
Earn passively by Staking:
By staking, you invest money into the blockchain network. The funds invested will serve as a guarantee that you are not a fraud and you would not lie about decisions regarding transactions carried out on the blockchain.
Staking tokens makes you a validator, and if you do your job honestly and do not try to cheat the system, you earn a percentage of the block rewards. However, as a validator, if you lie about processed transactions and you get caught, your staked token can be taken away. Remember it serves as a guarantee?
While staking is a great way to earn passively, it requires a huge start up capital and not everyone can afford to part with such an amount, upfront.
It is worthy to note that blockchain technologies are yet to develop a system that can support tens of thousands of validators so, there is a limit to the number of validators the system can accommodate. LOOM has a list of already authorized validators and this leads to the concept of Delegation.
What does it mean to delegate on the LOOM network?
Delegation on the LOOM network involves you assigning the powers of your token—the power to vote in the network—to someone else who’s already a validator. This person will vote on your behalf and share profits made on the network, with you the original owner of the token.
How does Delegation work?
After investing in the LOOM network, you go through the list of validators and assign your tokens to one. The validator you have assigned your tokens to, will take 25% of the profits earned. The LOOM network offers an approximate of 15% return annually or 1.25% monthly return.
After returns have been paid, you can decide to reinvest the returns paid, back into the system using the same validator or using a different one. Keep in mind there will be moments where your tokens are locked up and inaccessible. During extended lock up periods, you get higher returns. However this might make you miss out on the next LOOM bull market and will prevent you from selling high.
When you are reinvesting your tokens into the same pool you previously delegated, the lock-up period will automatically reset. For instance, if you collect a one month reward for a six months lock up period and then, you reinvest your rewards into the same pool, with the same validator, your lock up period will resets from the remaining five months to six.
When delegating, it is best to spread delegation across different validators; this will enable you have a withdrawal schedule while keeping gains constant.
You can earn from the LOOM network actively and passively. However, if you do not have the time or knowledge to earn actively, you can still make decent profits from investing and reinvesting your profits.
You can earn passively on the platform by staking tokens into the system and being a validator or you can delegate your tokens to validators and get your profit split. Whatever you decide on will bring you profit and if you want more information, you should check out the network’s website on https://loomx.io/
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