The Power of DeFi
Making Passive Income from a Lucrative Investment
Making passive income from various financial systems is becoming simpler these days, thanks to DeFi.
So, what is DeFi?
DeFi or decentralized finance refers to the many financial systems available that eliminate the need for a third party and works autonomously under the influence of blockchain technology. These new financial services have become the norm and are rapidly replacing the old way of finance.
Decentralized finance lets you carry out your desire, send and receive financial assets, invest, borrow, among other activities. It combines top-notch financial expertise with the latest technology to give you a sustainable system.
The possibilities of decentralized finance are nothing short of incredible. In recent times, the daily trading volume of DeFi assets can go as high as 13 billion dollars, with the prospects of going even higher. If you say decentralized finance has redefined financial freedom and the concept of ease of investment, you are not wrong. There are many avenues to making passive income in decentralized finance. The prospects of DeFi, as predicted by experts, are too good to miss.
What makes DeFi tick?
As mentioned above, decentralized finance is set to replace the existing financial systems that have been in operation in past years. However, what makes it different from what operates conventionally today? How does DeFi ensure everyone under its umbrella can enjoy its numerous benefits? What makes decentralized finance tick?
Decentralized operations
This fact is probably the biggest selling point of finance. One of the good things about decentralized finance is its foundation on blockchain. Blockchain technology is designed such that the keys to the kingdom are in several copies. No one has the autonomy to hold records of the transactions. These records are kept on several computers worldwide and can be viewed once the right requirements are met. This means that you have complete control and access to your financial assets.
Absence of a Gatekeeper
A middleman usually guides conventional banking and financial activities, a corporate body, or a government agency. DeFi eliminates the need for a middleman or “gatekeeper,” as it seems. This is important because these middlemen can flag, delay, or disallow financial transactions for going against one of their financial policies. DeFi assets are free of such regulations. The decentralized nature of these assets ensures no restrictions and removes the need for a middle man. DeFi operations are quick, easy to carry out, and free of scrutiny.
Security
Another benefit of DeFi is the security of your assets which you can always rely on. DeFi assets are all reliant on the same technology as all cryptocurrencies. The encryption that creates these digital assets also ensures that it is safe and can’t be hacked easily. The codes of these assets are distributed across different nodes on a network, such that the information is difficult to access and steal. While some of the specifics of these assets are visible to anyone with internet access, personal investment and your important transaction details are protected with bulletproof encryption. To state the least, this is a far cry from what has been in operation for a while. Think of a system where you can transact with another person thousands of miles away, and you are assured that details of your transaction can’t be accessed and your funds are safely tucked away from prying eyes and hackers; that’s DeFi!
Passive Income Opportunities
This aspect of DeFi is the most enticing; owning a digital financial asset is one thing, making money with them is another. DeFi assets or applications are built on the widely known cryptocurrency called Ethereum. The nature of this cryptocurrency is that it allows for the growth of other decentralized systems to live through it. Thus, bringing to life what we now know as DeFi assets. What does this mean for those interested in passive income opportunities? A lot of money-making opportunities!
● Making money from predictions: Ethereum is famous for an avenue called “Smart Contract.” This means when the right commands are entered, and the party to the transaction correctly meets the conditions, a transaction ensues. Thus, DeFi applications can come in the form of the prediction of an event; if your predictions are valid, you get paid.
● Mining potentials: For many cryptocurrencies, releasing tokens for a task completed is how they got popular. DeFi assets also give free tokens to invite interested people onto their platform.
● Expected yield returns: if you can take the time to pay attention and study DeFi, you can invest in them and capitalize on their yields. While this may look like a thing for experts or investment bankers, it is not rocket science and can be figured out with patience.
● Lending Avenues: A profitable source of passive income on DeFi platforms is the opportunity to lend crypto assets, especially Ethereum. On certain DeFi platforms, you can meet borrowers who need financial assets. Thus, you can lend out your assets, get them back after the stated time and make money from the interest that accrues. The higher the number of borrowers, the higher the rate of interest.
● Investment portfolios: Like all cryptocurrencies, DeFi tokens are a store of value. This means you can exchange your real currencies and buy DeFi assets that show potentials for growth and make an investment. After the asset grows, you can profit from the differentials from when you started and where it is now.
There are several other avenues to profit and earn passive income with DeFi assets. With an open mind and patience, these opportunities will yield rich returns.
You, Decentralized Finance and the Future
If you would take anything away from what you've read, it is that Decentralized Finance is here to stay, and its prospects are enticing. Also, it can provide passive income for you presently.
However, it is important to ensure that you transact with a trusted source and that their identities are not bogus.
Always watch the market for fluctuations and market trends. The future is out there for the waiting; you can be a part of it by investing in it now!
References
https://coinmarketcap.com/view/defi/
https://www.coindesk.com/learn/what-is-defi/
https://www.investopedia.com/tech/explaining-crypto-cryptocurrency/