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How Low-Risk High-Reward Investment Apps Dominated 2022

Where crypto investing platforms like Celsius and BlockFi went wrong - through poor risk management, a lack of transparency, and a centralised custodial service approach - Alluo has realigned the needs of the market with a highly rewarding (and low-risk) solution.
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Over the last few years, investment apps have grown in considerable popularity and there’s a good reason – almost anyone can access a huge number of excellent financial products with just a few thumb taps on their smartphone. We’ve seen the rise of mobile stock trading, device-based crypto trading, and apps for things like micro-investing, micro-lending, and copy-trading. We’ve seen challenger banks offer more competitive rates than their physical rivals, while decentralised liquidity pools and yield farms came out of nowhere with extraordinary APYs (and often disappeared just as fast).

With all of these different methods, strategies, and platforms for handheld investment, there is a great deal of risk. Robinhood, the biggest stock trading app in the world in 2021 ($22.8bn revenue), has seen a significant decline and devaluation in 2022, as has the overall stock market, with most people reporting negative portfolio performance. Cryptocurrency is in a tough period too, with the 2022 bear market proving a hostile (but not impossible) territory for those seeking safe investments. The collapse of UST, BlockFi, and Celsius is symbolic of why investment carries risk (in most cases).

Some things to consider:

  • 130m+ people trade stocks on their mobile
  • Americans lost $9 trillion on the stock market in 2022
  • 320m+ people now own cryptocurrency in some form
  • Global investors lost around $1 trillion on the crypto market in 2022
  • 26bn or 91% of world’s population uses a smartphone
  • Between two and three billion people do mobile banking on their phones

In this article, we’ll look at how the growth of mobile financial services, coupled with a particularly volatile and bearish year, have created a golden opportunity for low-risk, high-reward solutions.

Low-Risk, High-Reward: Is it Possible?

For beginners, mobile apps offer an affordable, accessible, and intuitive way to start organizing their finances and building their portfolios. However, beyond the myriad options on offer, they must also (and with little experience) weigh up the underlying considerations behind the returns being offered. Through clever phrasing, it’s easy to manipulate the perceived returns on investment products, especially when rates change frequently.

Low-risk, high-reward platforms have benefited from the global economic instability, offering users a way to safely put their funds into something that will outperform the interest rates of their bank. For example, traditional bank HSBC offers a standard ISA with an APY of 1.20%, paid monthly, whereas neo-bank Revolut offers a Savings Vault at 1.95%, paid daily.

Let’s look at another example. SoFi is an all-in-one investing app for beginners, offering stocks, ETFs, cryptocurrencies, and savings products. They offer impressive APYs of 2.5% on checking and 3.0% on savings, far above the US national average. Those figures are 62x and 14x above the national averages respectively.

For many crypto investors who were seriously stung in 2022 by the unwelcomed arrival of the bear market, or ‘crypto winter’ as many are calling it, low-risk gains for damage limitation are an absolute must. One impressive solution born during the crypto winter is Alluo.

Where crypto investing platforms like Celsius and BlockFi went wrong – through poor risk management, a lack of transparency, and a centralised custodial service approach – Alluo has realigned the needs of the market with a highly rewarding (and low-risk) solution. With Alluo’s non-custodial approach, the customer remains in control at all times.

Low-Risk Investment – Outperforming the Market

With stock, FX, crypto, ETF, and other kinds of trading, the risks are obvious – if the market dips, so will your portfolio. With Alluo, things are a bit different. On the front end, what you see are fiat currency value representations. Under the hood, there’s a pure DeFi engine powering great returns, and maintaining on-chain transparency, non-custodial services, and returns on fiat deposits currently at 7%. This outperforms Gemini, Coinbase, Crypto.com, KuCoin, and more, all without having to hand over your coins. Remember, not your keys, not your crypto – the importance of which cannot be understated as evidenced in the recent collapse of crypto exchange FTX, which stopped customer withdrawals as it was crashing. Alluo seems to have mastered low-risk, high-reward investing, with the most important addition of putting the control back into customers’ hands, nestling into an opportunistic position in a crowded market.

DeFi investing really took off in April 2020, starting what was called ‘DeFi Summer’, with countless protocols and investing platforms popping up overnight. Unfortunately, many of them disappeared just as fast, taking users’ money with them in hacks or what is called a “rug pull”. Many simply crashed because their tokenomics (token + economics) were poorly designed and unsustainable. Opportunistic investors threw their crypto into projects offering thousands of per cent APY, only to see the value of the coin drop to almost zero, making the astronomical APYs irrelevant.

Short-term gains over long-term stability made some “new rich” during DeFi summer, but many others lost considerable sums. Then, as DeFi matured, these pop-up platforms fell to the wayside and legitimate, progressive projects sustained or appeared in their place. Novelty precedes utility. Now, along with battle-tested protocols like Aave, Curve and Convex we have next generation non-custodial apps that bring access to them like Alluo, Gelt, and more to follow no doubt.

Inflation-Beating Technology!

As inflation and hyperinflation become global problems, apps and financial services will offer to help you ‘beat inflation’ or ‘hedge inflation’. This simply means that their savings or investment product offers a higher rate of return than the rate of inflation. In the past, people bought land, properties, bonds, gold and more, in order to hedge inflation. Now they use mobile apps. The world is changing, and Web3 is yet another way to do that.

Let’s say you have £10,000. If you do nothing with that money, like keeping it as cash, and the inflation rate is 10%, then after 1 year, that money is still £10,000, but it now has only £9,000 spending power. If instead, you put the £10,000 in a 12% investment product, after one year, you have £11,200, but it now has £10,080 spending power.

In simplified terms, the aim of the game is to put your money into an investment that maintains or increases value despite ongoing inflation.

Verdict: Why Low-Risk, High-Reward Investment Apps Will Continue to Dominate

In the UK, inflation is sitting at 11.1%. German inflation is 10.4%. In the US, it’s 7.7%. Australia is at 7.3%. Canada’s figure is 6.9%. Brazil reports 6.4%. You get the picture. Inflation is high right now. With countries entering a recession, the UK in particular, more and more news will create more and more discussion about how to hedge against inflation and avoid suffering portfolio losses.

Financial services like Alluo will continue to dominate, grow, and be catapulted into the limelight. Those who start now get a head start, those who wait will suffer the worst from inflation. All of this financial power is right at your fingertips, and it all starts with a simple app download.




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Editor-in-Chief of Blockonomi and founder of Kooc Media, A UK-Based Online Media Company. Believer in Open-Source Software, Blockchain Technology & a Free and Fair Internet for all. His writing has been quoted by Nasdaq, Dow Jones, Investopedia, The New Yorker, Forbes, Techcrunch & More. Contact Oliver@blockonomi.com

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