You have seen many Super Bowl ads related to cryptocurrencies and you’ve probably already found them freakor profound incestor just unsettlingly familiar. However, perhaps you believe the blockchain is left with financial rewards to reap and want to participate, or you already have some of your money tied up in crypto through companies like Coinbase and FTX that have advertised. fox in the big game.
What now? Tracking the rise and fall of Bitcoin, Ethereum, and other cryptocurrencies and actively trading those fluctuations can be a full-time job. Basically, day trading. And jump into NFTs, digital jewels that you can mint, buy or sell, are still difficult for many people.
For many crypto traders who are in the medium to long term, there are several other ways to make money in crypto that just sit around. in your crypto wallet: zoning and farming productivity on DeFi net. “DeFi” is just a generic term for “decentralized finance”—which explains all the services and tools built on the blockchain for currencies and smart contracts.
At its most basic, crypto staking and profit farming are pretty much the same thing: They involve investing money in one cryptocurrency (or more than one coin at a time) and earning a profit. and fees from blockchain transactions.
Deposit vs. yield farming
Betting is very simple. It usually involves keeping cryptocurrency in an account and allowing it to collect interest and fees since those funds are committed to blockchain validators. As blockchain validators facilitate transactions, fees are generated that, in part, go to the parties involved.
This type of holding interest has become so popular that mainstream crypto dealers like Coinbase offer it. Some tokens, such as the very stable USDC (pegged to the US dollar), offer an interest rate of around 0.15% annually (not too different from having you deposit money in your bank account). low interest checks), while other cryptocurrencies can earn you 5 or 6 percent a year. Some services require staking to lock in funds for a certain amount of time (meaning you can’t deposit and withdraw whenever you want) and may require a minimum amount to withdraw interest.
Farm yield is a little more complicated, but not that different. Profit farmers add funds to liquidity pools, often by pairing multiple tokens at once. For example, a liquidity pool that combines the Raydium token with USDC could produce a combined token that could yield a 54 percent APR (annual percentage rate). That seems absurdly high, and it gets weird: Some newer, extremely volatile tokens can be part of yield farms that offer hundreds of% APR and 10,000 to 20,000 APY (APY is the same as APR but takes into account compound interest).
The rewards accrue 24/7, usually paid out in the form of harvestable crypto tokens. The harvested coins can be invested back into the liquidity pool and added to the yield farm for bigger and faster rewards, or can be withdrawn and converted to cash.
