TokenInsight released Crypto Investment Products Report July 2023, aiming to help users know about the current landscape of crypto investment products and the potential risks. The report pointed out that products offered by most CEXes have issues with low transparency on returns and fund flows, but have high returns; on the contrary, decentralized products provide unstable returns, but score high in transparency.
Crypto investment products can be divided into the centralized ones and the decentralized ones. The centralized products can be further classified into three types based on the platforms offering them: provided by centralized exchanges, provided by centralized banking institutions, and provided by traditional companies.
Centralized crypto investment products generally have low learning costs, low transparency, and are highly regulated. Among them, investment products offered by CEXes have relatively high returns and the most diverse types, including flexible and fixed-term deposits, proxy participation in decentralized finance, options trading products, and Launchpool. But they are also relatively opaque. Only compliant exchange Coinbase provides transparent product scale and clear sources of returns.
Crypto banking offers a slightly less diverse range of financial products, but has relatively higher transparency and safer funds. Currently, only crypto banking offers fixed-income investment products that are both long-term and stable. Meanwhile, traditional financial institutions can only provide trusts/funds that track crypto trends due to regulatory constraints, and their product types are the most limited.
Decentralized financial products have the advantage of high transparency, low entry barriers, and transparent returns. However, their disadvantage is that they are severely affected by market conditions, with very low returns during bearish market.
Currently, only lending protocols can barely maintain a certain scale, while other types of investment protocols' TVL have decreased significantly. Not many projects can provide stable positive returns.
For more information, please read: Crypto Investment Products Report July 2023