How to Use DeFi Strategies to Maximize Your Earnings?
DeFi or decentralized finance is rapidly developing and coming out as the best option in the financial world. It has become a global alternative to the age-old tradition, centralized, financial system that we have today. Decentralized finance gives users the opportunity to invest their money in decentralized protocols that provide lending, borrowing, investing, and trading services with a smartphone and an Internet connection. Unlike banks, DeFi protocols run on open-source peer-to-peer blockchains, such as Ethereum, Terra and so on.
DeFi Strategies for Investing
Here are some of the well-used and popular DeFi strategies that are currently used for investing.
Stablecoins — Stability
Stablecoins are cryptocurrencies whose value is pegged to stable assets, such as USD. They are building blocks in the ecosystem of DeFi where transactional stability is vital, and that’s why they are widely used in DeFi for lending, trading, and borrowing.
Liquidity Pools
Several DeFi Protocols have similar services as those provided by the financial industry, such as borrowing and lending of funds. A bank usually charges a huge interest rate if the user is paying off the student loans; in DeFi, banks are completely replaced by liquidity pools, where any user can deposit their tokens while the borrowers can receive and pay them back at an algorithmically calculated interest rate.
Great Potential for Passive Income
DeFi offers many advantageous features and has opened up several new options for users that are not offered by traditional finance. It provides the potential to earn a passive income and the opportunities are vast. Rather than going to a fund manager, investors can choose to select tokenized asset management strategies, if they want to earn passive income through their crypto portfolio.
No Intermediaries
Decentralized exchanges provide users the opportunity to trade cryptocurrencies without using intermediaries and without giving up the custody of their crypto funds. When users deposits their crypto assets in liquidity pools, they are eligible to earn trading fees according to their share provided in the pool. The exchange price is determined by a smart contract, and the trading fees are divided between the liquidity providers.
PAVO is a DeFi yiled optimizer that helps users to invest their crypto assets in different liquidity pools through LP farming automatically in order to earn high levels of compound earnings. Simply put, PAVO offers a high-yield DeFi platform that helps users to generate a high yield from their crypto assets.
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