The time value of money (TVM) is the concept that money available today is worth more than the same amount of money in the future. While the purchasing power of money gradually wanes, the value of money can increase over time through investment or interest earnings.
A similar situation is inherent in cryptocurrencies. The value of cryptocurrency can change over time because of various variables, including market supply and demand, legislative changes and technological improvements.
Crypto lending platformsOne way to apply the principle of time value. These services allow users to earn interest on their investment by lending their cryptocurrency to other users. Because of the time value, the interest rate increases as the length of the lending period increases.
StakingAnother application of the concept of time value, which involves storing a certain amount of cryptocurrency locked in the blockchain to benefit and maintain the network. Long periods of staking result in large rewards because of the time value.
