Overcoming Fear: Making Money from DeFi

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Top reasons people don’t make money from DeFi. → Fear of techy words → Fear of Unknown → Impermanent loss You can overcome this fear today by simply understanding how people make money with DeFi + lots of practice and patience. Follow these tips ↓

→ First, let's clear up one thing. Where do these rewards come from?

✦ Staking Rewards Many DeFi protocols offer staking options where users can lock up their tokens to earn new tokens as rewards. These rewards can come from a project's treasury or be newly minted.

✦ Trading Fees When people exchange assets on a DEX, they usually pay a small fee. A portion of this fee is distributed back to liquidity providers and stakers.

✦ Incentive Programs Protocols often launch incentive programs to attract users. Rewards can be in the native token or other tokens like USDC. These incentives are aimed at encouraging liquidity provision, staking, or other types of engagement.

Understanding the source of these rewards is essential because it informs you of the risks involved. The more sustainable the source of the reward, the safer your investment.

→ Technical names you should know:

→ How to make money in DeFI. 🔷 Yield Farming One of the most popular ways to make money. It involves providing liquidity or staking tokens to earn rewards. Farms on @ash_swap for example are juicy! ❗Be aware of Impermanent loss, tho ❗

🔷 Staking Lock up your tokens to help secure a network and earn staking rewards. Currently staking #EGLD through the Liquid Staking module from @HatomProtocol.

🔷 Lending Platforms like @AaveAave, @compoundfinance, or @HatomProtocol allow you to lend your crypto to earn interest. I earn steadily on my #USDC, #BTC, #ETH, and #EGLD by lending them on @HatomProtocol at the moment.

🔷 Arbitrage Take advantage of price differences between different exchanges. Get a few screens, and you have to be sharp.

🔷 Liquidity Providing Supply liquidity to DEXs and earn a share of the trading fees. Many DEXes out there are generating fees for their LP providers. ❗Be aware of Impermanent loss ❗

🔷 Incentive Programs Special programs often offer additional rewards to encourage specific activities within a protocol. Just like @HatomProtocol is offering $3M USDC rewards for the users providing liquidity in the Lending Protocol.

That's a wrap, peeps! Hope you're smarter a bit! If not, let me know in the comments. Let me know anyway, actually!

*Disclaimer: I am not a financial expert, but rather someone who is passionate about educating others on the opportunities in DeFi.

You can read the unrolled version of this thread here: typefully.com/AndreiMX_/ARiFmFQ