Have you been successful in trading Bitcoin and want to try to get passive income with DeFi? Check out the explanation below.
DeFi or decentralized finance That is, DeFi is a financial system that is decentralized or has no authority.
Lately, DeFi is loved by crypto asset activists around the world. Many crypto assets are based on DeFi and its platforms are growing. In Indonesia, there is also the Tadpole.Finance platform with its TAD token.
Then, do you want to get passive income with DeFi?
Here’s how to get passive income with DeFi that you need to know. Below, the benefits and risks are also discussed.
Lending or lending is a process of locking funds in P2P and combine lending platforms for a certain period of time to earn interest.
Once you have crypto assets, you can passively lend and rely on smart contract liquidity to get an initial loan with interest. In a lending system, usually the interest rate can fix or variable based on the current market value.
The risk in the lending system is frequent bugs in the smart contract. Additionally, the price volatility or the temporary cost of a locked asset should be carefully considered.
Liquidity provision is where a decentralized exchange or DEX offers the opportunity to deposit ETH and other tokens on the ERC20 network into a liquidity pool in exchange for a proportionate return on the trading fee.
The method is quite easy. You just have to deposit some ETH or other tokens from the ERC20 network into the liquidity pool.
However, the risk is price volatility. You must have the right hedging strategy to help offset the risk of volatility.
Staking is the process of storing tokens in a specific wallet and performing various network functions to earn rewards. Staking is an alternative mechanism for mining or mining.
The rewards given on each platform are different. The profitability is relatively high, from 5% to 60% per year, but with a high risk. The risk is cutting or charging gas fees on the network as a condition for getting the reward.
Mining or mining is certainly no stranger to those of you who already understand crypto assets, especially Bitcoin. One of the ways to get DeFi tokens is mining or mining.
Mining is a process of using hardware or specific computing hardware to solve cryptographic math problems. The purpose of mining is to get reward tokens such as Bitcoin, ETH and others.
Mining requires high costs for hardware purchases. Not to mention the electricity payment. This is certainly not recommended for those of you who are not in the air because the process is difficult and expensive.
Lottery pools are a lottery system that is held every week. You can buy lottery tickets at the lottery pools platform. After that, you get a chance to win.
It is rarely used by people. Because the chances of winning are small, even though risks such as bugs and gas fees do not exist in this system.
So, those were some ways to get passive income with DeFi. Before you try it, of course you better pay attention to the benefits and risks.
However, for those of you who want to get passive income with DeFi, you can try the Tadpole.Finance platform. The method is easy and easy because all the steps have been discussed at Indodax.academy.