Unpopular ways to play in the coin circle: How to leverage excess returns with extremely low principal

Explore lesser-known strategies like staking on small PoS networks, liquidity mining on DEXs, and crypto arbitrage to maximize crypto returns with low capital.

May 28, 2025 at 09:14 am

In the dynamic world of cryptocurrencies, many enthusiasts are constantly seeking innovative strategies to maximize their returns, even with limited capital. While popular methods like buying and holding or trading on well-known exchanges are widely discussed, there exist unpopular ways to play in the coin circle that can potentially leverage excess returns with an extremely low principal. This article will explore some of these lesser-known strategies, providing detailed insights into how you can approach them.

Staking on Lesser-Known Proof of Stake (PoS) Networks

Staking has become a popular way to earn passive income in the crypto space, but focusing on lesser-known Proof of Stake (PoS) networks can offer higher returns due to lower competition. These networks often have smaller market caps and fewer validators, which means that staking rewards can be significantly higher.

• Choose a network: Research and identify lesser-known PoS networks that offer attractive staking rewards. Platforms like Cosmos (ATOM) and Tezos (XTZ) are examples, but look for even smaller projects.
• Set up a wallet: Use a wallet compatible with the chosen network. For instance, if you choose Cosmos, you can use the Cosmos Station wallet.
• Stake your tokens: Transfer your tokens to the wallet and delegate them to a validator. Be sure to choose a validator with a good track record and low fees.
• Monitor and adjust: Regularly check the performance of your stake and adjust your strategy based on network updates and changes in validator performance.

Participating in Liquidity Mining on Decentralized Exchanges (DEXs)

Liquidity mining on decentralized exchanges (DEXs) can be a lucrative way to earn high returns with a small amount of capital. This involves providing liquidity to trading pairs on DEXs and earning rewards in the form of tokens.

• Select a DEX: Choose a DEX that offers high-yield liquidity pools. Examples include Uniswap, Sushiswap, and Curve.
• Understand the risks: Be aware that liquidity mining can be risky due to impermanent loss and smart contract vulnerabilities.
• Provide liquidity: Deposit an equal value of two tokens into a liquidity pool. For instance, on Uniswap, you might provide ETH and DAI.
• Claim rewards: Regularly claim your rewards and decide whether to reinvest them or withdraw them.

Yield Farming on DeFi Platforms

Yield farming is another strategy that can yield high returns, especially on lesser-known DeFi platforms. This involves lending your crypto assets to earn interest or rewards.

• Research platforms: Look for DeFi platforms that offer high APYs. Examples include Aave, Compound, and Yearn.Finance.
• Understand the terms: Each platform has different terms and risks, so make sure you understand them before investing.
• Deposit assets: Transfer your crypto assets to the platform and deposit them into a yield farming pool.
• Monitor and adjust: Keep an eye on your investments and adjust your strategy as needed based on market conditions and platform performance.

Engaging in Crypto Arbitrage

Crypto arbitrage involves buying a cryptocurrency on one exchange where it is cheaper and selling it on another where it is more expensive. This can be done with a small principal and can yield significant returns if executed correctly.

• Identify opportunities: Use tools like CoinGecko or CryptoCompare to find price discrepancies across different exchanges.
• Execute trades quickly: Speed is crucial in arbitrage, so set up accounts on multiple exchanges and use APIs to automate trades if possible.
• Account for fees: Calculate the fees for both buying and selling to ensure that the arbitrage opportunity is profitable.
• Monitor and repeat: Continuously monitor the market for new arbitrage opportunities and repeat the process as needed.

Investing in ICOs and IEOs

Investing in Initial Coin Offerings (ICOs) and Initial Exchange Offerings (IEOs) can be a high-risk, high-reward strategy. These are opportunities to buy into new projects at an early stage, often with a small investment.

• Research projects: Thoroughly research the team, the project's whitepaper, and the market potential before investing.
• Understand the risks: Be aware that many ICOs and IEOs fail, so only invest what you can afford to lose.
• Participate in the offering: Follow the instructions to participate in the ICO or IEO, typically by sending cryptocurrency to a specified address.
• Monitor the project: Keep an eye on the project's development and be prepared to sell your tokens if the project does not meet expectations.

Frequently Asked Questions

Q: Are these strategies suitable for beginners?
A: These strategies are generally more advanced and carry higher risks. Beginners should start with more straightforward methods like buying and holding established cryptocurrencies before attempting these more complex strategies.

Q: How can I minimize the risks associated with these strategies?
A: To minimize risks, diversify your investments across different strategies and platforms, conduct thorough research before investing, and only invest what you can afford to lose. Additionally, stay informed about market trends and adjust your strategies accordingly.

Q: Can these strategies be automated?
A: Some aspects of these strategies, such as crypto arbitrage and yield farming, can be automated using trading bots and smart contracts. However, it's important to thoroughly test and monitor any automated systems to ensure they are functioning correctly and not exposing you to unnecessary risks.

Q: How important is it to stay updated with market news when using these strategies?
A: Staying updated with market news is crucial when employing these strategies. Market trends, regulatory changes, and project updates can significantly impact the performance of your investments. Regularly following reputable crypto news sources and participating in community discussions can help you make informed decisions.