Your $PLS is Now Worth $5 Million USD - Now What?

Crypto is about so much more than just winning big and cashing out. It's an alternative financial system that enables us to build our own financial futures.

But that poses a big question: what do you do if you actually get rich from crypto? 

What happens if one day you wake up and find that your PulseChain ($PLS) holdings—for instance—are worth millions of dollars?

While this article does not provide financial advice, we are going to explore alternatives to cashing out that have been made more practical than ever thanks to new advancements in DeFi.

Whether or not you’re already rich, you’re going to want to read this.

#1: HODL’ing Your Crypto (Diamond Hands)

At its current all-time-high, Bitcoin effectively 6,900,000X’d from a penny to $69,000 USD per coin. But along the way, many early adopters sold their BTC to cash out on a 2X, 4X, or even 100X return on their initial investments. 

Undeniably, these are significant profits. But at the same time, investors could have potentially earned higher returns by “HODLing” their assets.

This is why wealthy and institutional traders often invest over longer periods of time. Doing so gives them the ability to earn more from future price hikes and outlast certain movements within a market.

However, there are many reasons why everyday traders are often unable to capitalize on these longer-term opportunities.

Ordinary investors typically have a limited amount of capital at their disposal. As a result, most people cannot afford to leave funds alone in a wallet for years on end. Coupled with the fact that it can be hard to readily spend crypto in the world today, traders often find themselves in situations where they have to quickly liquidate their coins—even if it means missing out on potential future gains.

But there’s actually another option.

#2: Collateralizing Instead of Selling

Many people who cashed out on BTC too early would have loved to have access to Liquid Loans. It's a decentralized lending platform that gives virtually anyone the ability to hold onto all of their coins while still extracting value.

By collateralizing, users maintain price exposure to $PLS while simultaneously being able to get liquidity. This means that you can use Liquid Loans to pay sudden bills, buy assets, and access goods and services—while still having access to your appreciating assets.

This is the same process that is readily used in traditional finance. Most wealthy people do not keep their money in dollars, but rather in assets. They then take out collateralized loans against these assets (such as their house or car) to access liquid funds without having to part ways with the assets they own.

In other words, collateralizing gives you the benefits of selling while still retaining your underlying appreciating asset. 

In fact, collateralizing $PLS can even have two other distinct advantages to selling.

First, many jurisdictions do not consider trading between cryptocurrencies or minting coins to be a taxable event. Instead, these jurisdictions only mandate that taxes are paid when digital assets are actually sold for fiat currencies like the US dollar.

Due to the fact that crypto tax laws vary across different parts of the world, however, it is important to consult with a tax professional to determine if you would personally benefit from collateralizing rather than selling for tax purposes.

Second, collateralizing allows users to avoid price impact and slippage. If you were to sell a sum of $5 million USD worth of $PLS, for example, you could have a 5% price impact on the trade. As a consequence, you would only receive $4.75 million USD from your sale.

#3: Living Off Your Crypto Yield

A quintessential way to build financial freedom is to have the yield on your investments passively pay for your lifestyle.

This has long been an avenue enjoyed by the wealthy in traditional finance. Here, many people live off the interest that they earn just from having their money sitting around.

In the same fashion, Liquid Loans makes it extremely simple to build a passive revenue stream off your digital assets without having to sell them.

Any $PLS holder can easily mint USDL through the Liquid Loans protocol. USDL is a fully-decentralized stablecoin that maintains price parity with the US dollar and can be freely traded and reinvested.

Users can then use their USDL to earn yield, either directly through Liquid Loans’ Stability Pool or by accessing other DeFi yield methods to earn passive income. 

If you were to win big on the price of $PLS, for instance, and set out to safely mint 2 million USDL, even a modest DeFi return of 5% would yield you $100,000 USD per year. For most people, that kind of money alone is enough to live very comfortably. 

While you might not yet be at the point where crypto is your primary source of income, the fact remains that we no longer live in a world where the only way to access your profits is to sell.

Whether you simply want to hold onto your crypto for longer, access liquidity without selling, or earn income on the assets you already own, new DeFi protocols like Liquid Loans have opened up a world of new options.