In De-Fi, lending platforms and exchanges must have the liquidity to operate properly. To solve this we can provide liquidity by locking in our funds into a smart contract. When other users engage in trading or other features such as lending and borrowing it incurs fees. Then the fees are distributed to the yield farmers as a reward based on their pool percentage. since you are taking the risk you are rewarded.
It is also important to remember that DeFi protocols can reward the liquidity providers with different tokens than those deposited, opening even more opportunities to provide liquidity in other pools.
My top earning pools have been bnb/cake on Pancakeswap and Sushiswap eth/sushi pools.
2. Staking
Staking is? arguably as profitable as Yield farming and without risk (mostly).
To participate you have to buy and stake coins in order to get added to the mining pool. The proof of stake mechanism is energy efficient and very applicable in today's crypto world.
As for profits, the actual profits you can make from staking will depend on how much you vest and for how long. I've been using BINANCE and Pancakeswap to earn around 10-70% on my coins
3. Basic attention token (Brave browser)
Utilized by the BRAVE browser, BAT has changed the traditional advertising scene.
it proposes to revolutionize the idea that an everyday user could benefit the advertising business, creators, and even the advertising companies.
By viewing advertisements while using the brave browser I earned 2-3$ monthly and have maintained my privacy.
I strongly believe that the bat token will be here to stay long term and the fact its founder (Brendan Eich) has a respectable goal and strong roadmap is a bonus.
4. De-Fi Lending
Another Battle-tested method of generating passive income utilizing crypto is through De-Fi lending.
De-Fi is an ecosystem of blockchain financial platforms that function without a central authority. Unlike on centralized peer-to-peer lending platforms, De-Fi lending occurs on an autonomous protocol powered by various smart contracts.
Because De-Fi is 100% transparent and open-source, De-Fi lending has become very popular and gained traction. De-Fi lending is where crypto lending platforms such as Compound and Aave provide crypto loans with zero intermediaries allowing users to list their crypto coins for lending purposes on the platform. This way, borrowers can directly take loans and the lender is able to earn interest on their coins. This is very similar to a bank but not tilted so heavily towards the bank.
I've been using compound where token holders have voting rights and users can vote based on their position. However, what’s perhaps more enticing to crypto investors is that depositing funds in a lending protocol typically means earning a higher APY than in a traditional bank account.
Although De-Fi lending has become highly popular due to its above-average APY and compounding oppurtunity.
5. Crypto trading bot (I used 3commas)
From my experience so far 3commas is well integrated and works on most of the major exchanges. Everyone dreams of achieving 1% daily but being realistic it's just not going to happen every day. Some days I've been up 2% and others down 3%.
I've been testing various strategies with rsi and the results vary so be cautious when using bots.
Conclusion
Each method has pros and cons so please invest wisely and enjoy your day :)
