Most people have their Ethereum sitting around doing nothing.
Let's put it to work.
Here are some low-risk ways to earn passive income with your ETH:
Let's put it to work.
Here are some low-risk ways to earn passive income with your ETH:
My ETH Philosophy
I'm going to focus on LOW-RISK ways to earn yield.
ETH's job is to preserve wealth and add stability to my portfolio.
It's a long term investment that I'm trying to squeeze some juice out of
I leave the high-risk, degen plays to other parts of my portfolio.
I'm going to focus on LOW-RISK ways to earn yield.
ETH's job is to preserve wealth and add stability to my portfolio.
It's a long term investment that I'm trying to squeeze some juice out of
I leave the high-risk, degen plays to other parts of my portfolio.
Method 1: Store in a Cold Wallet
You donβt have to earn a yield on everything.
Think of it like hiding storing gold bars away (but the price actually goes up)
DeFi's risky.
You're hedging yourself against possible exploits, hacks, & rug pulls.
Risk: 1/10
You donβt have to earn a yield on everything.
Think of it like hiding storing gold bars away (but the price actually goes up)
DeFi's risky.
You're hedging yourself against possible exploits, hacks, & rug pulls.
Risk: 1/10
Method 2: Lend Your ETH to CeFi
You can lend your ETH to companies.
They then lend it to hedge funds, exchanges, and institutional traders.
That's where the yield comes from.
Places include:
@CelsiusNetwork
@BlockFi
@hodlnautdotcom
I've calculated some rates for 5 ETH.
You can lend your ETH to companies.
They then lend it to hedge funds, exchanges, and institutional traders.
That's where the yield comes from.
Places include:
@CelsiusNetwork
@BlockFi
@hodlnautdotcom
I've calculated some rates for 5 ETH.
Pros: Itβs easy.
Cons: KYC. Fuck the suits. Not your keys.
How βsafeβ is it?
β’ These places are NOT FDIC insured like banks. They do take safety seriously. @BlockFi's coins are managed by @Gemini
β’ @celsiusnetwork was part of the @badgerdao exploit
Risk: 3/10.
Cons: KYC. Fuck the suits. Not your keys.
How βsafeβ is it?
β’ These places are NOT FDIC insured like banks. They do take safety seriously. @BlockFi's coins are managed by @Gemini
β’ @celsiusnetwork was part of the @badgerdao exploit
Risk: 3/10.
Method 3: Staking ETH Directly
Staking is the process of locking your tokens up to help secure a Proof of Stake network.
By staking your ETH, you earn additional ETH.
ETH is the hardest chain to stake directly so I don't recommend it, and it has a high minimum.
Staking is the process of locking your tokens up to help secure a Proof of Stake network.
By staking your ETH, you earn additional ETH.
ETH is the hardest chain to stake directly so I don't recommend it, and it has a high minimum.
Pros: Securing the network directly. ETH Maxis will jerk you off while whispering ullllaaatraasounndd moneyyyy.
Cons: 32 ETH min (roughly $100k), hard to set up, your ETH is LOCKED until the merge
There are some alternative options:
Cons: 32 ETH min (roughly $100k), hard to set up, your ETH is LOCKED until the merge
There are some alternative options:
a. Staking with a Centralized Exchange
Some exchanges like @coinbase will allow you to stake directly.
Rates: 4.5% APR
Pros: Stupid simple.
Cons: Lower Rates, KYC, Not in your Custody, fuck the suits.
Risk: 2/10
Some exchanges like @coinbase will allow you to stake directly.
Rates: 4.5% APR
Pros: Stupid simple.
Cons: Lower Rates, KYC, Not in your Custody, fuck the suits.
Risk: 2/10
b. Liquid Staking
Liquid Staking solves the problems with staking ETH directly.
β’ There's no minimum to stake.
β’ There's no lockup.
Your deposit your ETH. You get a token that REPRESENTS your staked eth like (stETH).
Liquid Staking solves the problems with staking ETH directly.
β’ There's no minimum to stake.
β’ There's no lockup.
Your deposit your ETH. You get a token that REPRESENTS your staked eth like (stETH).
The benefits of stETH (stETH is Lido's version)
β’ It's pegged 1:1. 1 ETH is always worth 1 stETH
β’ stETH earns staking reward through rebasing each day.
β’ You can do DeFi with stETH such as LP pair and lending / borrowing.
β’ It's pegged 1:1. 1 ETH is always worth 1 stETH
β’ stETH earns staking reward through rebasing each day.
β’ You can do DeFi with stETH such as LP pair and lending / borrowing.
Liquid Staking Solutions:
β’ @LidoFinance - The Most Popular and highest TVL
β’ @stakewise_io - 2 Token design that separates staked eth and the rewards.
β’ @Rocket_pool - The Most Decentralized. You can run your own node for additional yield!
Risk: 2/10
β’ @LidoFinance - The Most Popular and highest TVL
β’ @stakewise_io - 2 Token design that separates staked eth and the rewards.
β’ @Rocket_pool - The Most Decentralized. You can run your own node for additional yield!
Risk: 2/10
Advanced:
You can earn additional yield by using stETH in LP pools on ETH mainnet.
β’ @CurveFinance
β’ @ConvexFinance
β’ @iearnfinance
I'm not going to go into detail as ETH gas fees will price out most people reading this.
Risk: 4/10
You can earn additional yield by using stETH in LP pools on ETH mainnet.
β’ @CurveFinance
β’ @ConvexFinance
β’ @iearnfinance
I'm not going to go into detail as ETH gas fees will price out most people reading this.
Risk: 4/10
Method 4: Using ETH /w @AnchorProtocol
This is my PERSONAL strategy.
When I started this, the interest rates were much, much higher. π
They were paying you to borrow money, and I liked having exposure to @terra_money.
(Like this if you're a LUNAtic)
This is my PERSONAL strategy.
When I started this, the interest rates were much, much higher. π
They were paying you to borrow money, and I liked having exposure to @terra_money.
(Like this if you're a LUNAtic)
Steps:
1. Convert your ETH into stETH at @Lidofinance
2. Convert your stETH into bETH at anchor.lido.fi
3. Deposit your bETH as collateral on @anchorprotocol
4. You'll be able to borrow UST up to 75%. I recommend around 25% LTV. Don't be greedy fren.
1. Convert your ETH into stETH at @Lidofinance
2. Convert your stETH into bETH at anchor.lido.fi
3. Deposit your bETH as collateral on @anchorprotocol
4. You'll be able to borrow UST up to 75%. I recommend around 25% LTV. Don't be greedy fren.
You can then deposit the UST to earn 19.5% APY
Pros: Earn UST. Additional yield possible with aUST
Cons:
β’ Converting might be taxable
β’ Youβre using leverage
β’ the 19.5% APY might not last forever
β’ smart contract risks
β’ lots of moving parts for a noob.
Risk: 4/10
Pros: Earn UST. Additional yield possible with aUST
Cons:
β’ Converting might be taxable
β’ Youβre using leverage
β’ the 19.5% APY might not last forever
β’ smart contract risks
β’ lots of moving parts for a noob.
Risk: 4/10
Advanced:
When you deposit UST, you get a token called aUST in return.
You can gain additional yield without too much risk with your aUST.
It's called Delta Neutral strategies on @Mirror_protocol
There's a new protocol called @aperturefinance that automates this.
Risk: 5/10
When you deposit UST, you get a token called aUST in return.
You can gain additional yield without too much risk with your aUST.
It's called Delta Neutral strategies on @Mirror_protocol
There's a new protocol called @aperturefinance that automates this.
Risk: 5/10
Method 5: Nexus Protocol on Terra
Take your bETH on Terra, and stick it into @NexusProtocol
It's simple and easy.
6.45% APR
Risk: 3/10
Take your bETH on Terra, and stick it into @NexusProtocol
It's simple and easy.
6.45% APR
Risk: 3/10
Method 6: Use ETH in an LP Pool
You can use ETH in a Liquidity Pair.
For example, you can pair ETH - USDC on a protocol and earn yield.
The problem is that using ETH Layer 1 is expensive due to Gas fees.
You can use ETH in a Liquidity Pair.
For example, you can pair ETH - USDC on a protocol and earn yield.
The problem is that using ETH Layer 1 is expensive due to Gas fees.
One solution
You can bridge your ETH over to a different chain.
By bridging it over, to a cheaper chain, you keep the value of your ETH but you pay fewer gas fees in long run
Options:
ETH Scaling: MATIC, Arbitrum
Alt L1's: AVAX, FTM
FTM has the most opportunities right now.
You can bridge your ETH over to a different chain.
By bridging it over, to a cheaper chain, you keep the value of your ETH but you pay fewer gas fees in long run
Options:
ETH Scaling: MATIC, Arbitrum
Alt L1's: AVAX, FTM
FTM has the most opportunities right now.
How to Bridge to FTM
You can use @spookyswap
β’ Wrap your ETH to wETH.
β’ Bridge your wETH from ETH network to FTM network.
MAKE SURE you have enough gas fees!
ETH gas to bridge, and FTM on the network
From there you can use wETH in liquidity pairs on FTM
You can use @spookyswap
β’ Wrap your ETH to wETH.
β’ Bridge your wETH from ETH network to FTM network.
MAKE SURE you have enough gas fees!
ETH gas to bridge, and FTM on the network
From there you can use wETH in liquidity pairs on FTM
"But...But ETH is so expensive to wrap and bridge"
I hear ya.
You can look for timing when the ETH gas is lowest.
And you have to do your own calculations to see which option is best for you.
I'm here to give options. I can't make gas cheaper.
I hear ya.
You can look for timing when the ETH gas is lowest.
And you have to do your own calculations to see which option is best for you.
I'm here to give options. I can't make gas cheaper.
Method 7: Easy farming on FTM with Tarot
Take your wETH and bring it over to @tarotfinance
Single side staking for 6.6%
Risk: 3/10
Take your wETH and bring it over to @tarotfinance
Single side staking for 6.6%
Risk: 3/10
Method 8: LP on FTM
Here are two options if you want to put your wETH on a LP pool
/a @beethoven_x
FTM / WBTC / WETH in the Grand Orchestra
31.18% APR. Paid in BEETS
or
/b @LiquidDriver
FTM - WETH
48% APR. Paid in LQDR
Here are two options if you want to put your wETH on a LP pool
/a @beethoven_x
FTM / WBTC / WETH in the Grand Orchestra
31.18% APR. Paid in BEETS
or
/b @LiquidDriver
FTM - WETH
48% APR. Paid in LQDR
The Risks with LP'ing
Pros: You can earn great yields, especially if you're gaining a token that goes up in value.
Risks:
β’ Impermanence loss
β’ You're gaining value in a different token
β’ Possible taxable events
β’ Smart contract risks
Risks Level: 7/10
Pros: You can earn great yields, especially if you're gaining a token that goes up in value.
Risks:
β’ Impermanence loss
β’ You're gaining value in a different token
β’ Possible taxable events
β’ Smart contract risks
Risks Level: 7/10
Warning:
Be careful when you're bridging tokens over.
Imagine if I want to use ETH on Solana.
My ETH is deposited onto the bridge.
The bridge MINTS the Sol version of ETH.
So it's like my ETH is in the bridge's bank.
What happens if a bank gets robbed?
Be careful when you're bridging tokens over.
Imagine if I want to use ETH on Solana.
My ETH is deposited onto the bridge.
The bridge MINTS the Sol version of ETH.
So it's like my ETH is in the bridge's bank.
What happens if a bank gets robbed?
Because that's exactly what happened last week.
Wormhole was exploited, and most of their ETH was stolen.
Fortunately, they were compensated by their parent company.
Bridges WILL be exploited again, and not all of them have a rich sugar daddy like JumpTrading
Wormhole was exploited, and most of their ETH was stolen.
Fortunately, they were compensated by their parent company.
Bridges WILL be exploited again, and not all of them have a rich sugar daddy like JumpTrading
Which one should you choose?
You have a few options.
You have to find YOUR balance among ease of use, risk levels, yield amount, and decentralization.
And don't forget to spreadsheet the numbers.
You have a few options.
You have to find YOUR balance among ease of use, risk levels, yield amount, and decentralization.
And don't forget to spreadsheet the numbers.
Recommendations on Goals:
For your normie friend: Stake /w @Coinbase
Simple DeFi: Bridge and go to @Nexusprotocol or @Tarotfinance
What I do: @anchorprotocol + @mirror_protocol
Highest risk / Highest rewards: Bridge over to FTM and use ETH in LP pools
For your normie friend: Stake /w @Coinbase
Simple DeFi: Bridge and go to @Nexusprotocol or @Tarotfinance
What I do: @anchorprotocol + @mirror_protocol
Highest risk / Highest rewards: Bridge over to FTM and use ETH in LP pools
In 2018, I lost 90% of my portfolio due to Crypto winter.
Why?
I was a dumbass that didn't take profits and chased after shitcoins.
When I got back into Crypto in 2020, it was my ETH bags that saved me and gave me starting capital to work with.
PLAY IT SAFE WITH YOUR ETH!
Why?
I was a dumbass that didn't take profits and chased after shitcoins.
When I got back into Crypto in 2020, it was my ETH bags that saved me and gave me starting capital to work with.
PLAY IT SAFE WITH YOUR ETH!
Final note:
Do your own research.
β’ Consider taxes
β’ Consider gas fees
β’ CeFi rates change depending on the amount, location, time, etc.
β’ Rates change. Could be lower half a year from now.
@StakingRewards
Do your own research.
β’ Consider taxes
β’ Consider gas fees
β’ CeFi rates change depending on the amount, location, time, etc.
β’ Rates change. Could be lower half a year from now.
@StakingRewards
Thatβs it for today.
If you found this thread valuable:
1. Follow me for threads on DeFi, frameworks, and the latest trends β
@thedefiedge
2. I've started a weekly newsletter where I go deeper into these topics. Join 5,000+ others at
TheDeFiEdge.com
If you found this thread valuable:
1. Follow me for threads on DeFi, frameworks, and the latest trends β
@thedefiedge
2. I've started a weekly newsletter where I go deeper into these topics. Join 5,000+ others at
TheDeFiEdge.com
One more solid strategy that slipped my radar.
@iearnfinance wETH is 8.97% APY on @FantomFDN.
h/t to @CryptosEngineer
@iearnfinance wETH is 8.97% APY on @FantomFDN.
h/t to @CryptosEngineer
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