Decentralized Finance or DeFi refers to a type of blockchain-based finance that does not rely on central financial intermediaries such as banks or brokerages…using smart contracts on the blockchain network.
Defi is developing new perspectives on how to invest for profit, offering the opportunity for any individual to earn passive income by staking, yield farming, and lending your digital assets. And no need to go through any complicated measures.
How to Earn Income through Defi?
As I mentioned above the most common ways to earn profit from DeFi are staking or lending crypto assets in order to generate high returns or rewards in the form of additional cryptocurrency.
Yield farming (also known as liquidity farming): earning interest on your cryptocurrency in the same way that you would earn interest on money in a savings account. all you need to do is staking your cryptocurrency for a period of time in exchange for interest.
How it works?
Best Yield Farms Platform
|platform||how it works|
|Liquidity Providing on Uniswap||Liquidity provider burns their pool tokens to reclaim their stake in the total reserve, they receive a proportionate share of the total fees accumulated while staking.|
|PancakeSwap||Referred to as an automated market maker (AMM).This means there are no order books, bid/ask systems, or limit/market orders. Users trading on the platform, on the other hand, automatically draw liquidity from one or more liquidity pools, which then rebalance after the trade is completed.|
|Aave||A borrower requests funds in the form of a short-term loan. They immediately use the funds to capitalize on an arbitrage opportunity between two decentralized exchanges. When the transaction is finished, the loan is returned to Aave with an additional 0.09 percent charge.|