The biggest risk to Ether’s recovery is a lack of awareness around asset turnover – Haven1

Emerging Ether rebalancing protocols have resulted in significant economic sustainability and security concerns for investors with double-digit passive returns.

However, the biggest risk surrounding Ether (ETH) is not technical complexity, but a lack of investor awareness, according to Jeff Owens, co-founder and CEO of Haven1.

Speaking to Cointelegraph, Owens said investors should understand the risks of asset transfers while reprogramming protocols:

“I hope people start to realize that the more assets you have, the more at risk you are. That means it only takes one of those layers to extract the reward or not, and you can get the waterfall effect that comes with it.

Asset rebalancing involves traders deploying the same capital to multiple protocols. This is because liquid staking gives investors a copy of the original Ether token, which can be deployed in other decentralized finance (DeFi) protocols.

Heaven1 is an Ethereum virtual machine-compatible layer-1 blockchain that recently launched its own liquid staking token, hsETH.

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Rebalancing is a “powerful financial tool,” but investors need to understand the number of loopholes

Liquid storage has become a leading protocol category for crypto investors as it enables more capital efficiency. Standard stock protocols do not allow redeployment of seized assets.

Liquid storage is the largest protocol category, with a total value locked (TVL) of over $51.1 billion. By comparison, the credit market has a total TVL of just $32 billion, according to Defillama.

While Ether rebalancing is a “robust financial tool,” investors should still be aware of the amount of loopholes they add to their assets, Owens said. he said:

“There's always a concern that people are given these very strong financial instruments in crypto and don't understand the implications, the number of loops they add and the implications for their assets. So for us, the ethos of Heaven1 is to ultimately avoid many of these. [risks]He said.

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How is hsETH offering 25% API yield?

Haven1's recently launched refinancing portal is offering investors up to 25.24% Annual Percentage Rate (APR) yield over the current 3.24% Ether refinancing APR.

The launch of the offering has raised some concerns as it is much higher than the 20% yield offered by the Anchor Protocol on TerraUSD (UST) before the algorithmic stable coin issuer Terra collapses in May 2022.

However, since hsETH's 25% yield is a “pre-mainnet incentive mechanism” from Haven1, which will adjust over time based on supply and demand, investors need not worry about another tera-like crash.

“The APR is not intended to be permanent for Haven1, and is merely an incentive to bring the community into the testnet first. The only real way to do this is by throttling Ethereum Liquid.

Haven 1 created a reserve fund consisting of 10% of the application fees earned by the network.

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