(DE)CENTRALIZED
(Fi)nance
(DE)CENTRALIZED
(Fi)nance
As Technology and, coincidently, we as a species are evolving out of centralization, more and more opportunities are starting to present themselves.
Slowly but surely we are leaving behind centralized tech that benefits from your information, to Decentralized tech that benefits WE THE PEOPLE. We are heading into Web 3.0 and the gates are open for those that want to be early entrants.
From Web Browsers and Search Engines to how you purchase things from the internet, there are a growing selection of ways to earn crypto from doing what you are already doing.
Staking
The easiest way to put your money to work. Just like depositing into a savings account, staking is as simple as depositing your assets into an account, known here as “Delegating” to a “Validator”.
There are so many options for stakeable assets, you can investigate the plethora of options and even use calculators to estimate your earnings with the StakingRewards.com website. (The button below links here)
Liquidity Providing for Decentralized Exchanges
The next step in complexity in the DeFi scene is providing liquidity for Decentralized Exchanges (DEX’s). This is simply putting up your assets in the pool of trading pairs, which is necessary in decoupling form Centralized exchanges, such as Binance and Coinbase.
Liquidity Providing (LP) is an important and necessary facet to the decentralization of our financial system, and unshackle us from the influence of CEX‘s. The people are the ones fueling (and profiting) the Exchange Protocols and thus no centralized authority that holds a large amount of assets to manipulate markets.
Though currently, most do still have the risk of Impermanent Lose. Which, quite simply, is the potential lose experienced in price volatility between the trading pair you are providing for.
Decentralized Lending/Borrowing
Only for the most advanced users and should be approached with knowledge and caution. Not that it is particularly hard, but more so because of the greater risk that is involved and the experience needed from the above mentioned techniques to help mitigate risk and use debt wisely.
You should have some experience doing the above (staking/LPing) before going this route.
Borrowing is the act of putting Digital Assets up as collateral to receive a loan in a stable coin. Being that you are using collateral, the interest you pay on your loan is low. If you are wise and have knowledge, the interest is much lower than the APY you can gain from Liquidity Providing or Staking. Thereby making money off of your debt.
Decentralized Lending/Borrowing
Only for the most advanced users and should be approached with knowledge and caution. Not that it is particularly hard, but more so because of the greater risk that is involved and the experience needed from the above mentioned techniques to help mitigate risk and use debt wisely.
You should have some experience doing the above (staking/LPing) before going this route.
Borrowing is the act of putting Digital Assets up as collateral to receive a loan in a stable coin. Being that you are using collateral, the interest you pay on your loan is low. If you are wise and have knowledge, the interest is much lower than the APY you can gain from Liquidity Providing or Staking. Thereby making money off of your debt.
