How to Make PASSIVE INCOME in Crypto DeFi (as a millionaire)
Some of you just hate crypto, but today, im going to give you a reason to absolutely love crypto. Even if youre not interested in bitcoin or ethereum vitalik butrin, you may still be interested in gaining passive income through using crypto, and you can earn 10. 20. 30. 40 50 interest on your money. This is some pretty interesting stuff through d5 decentralized finance ill. Show you how you can do this, and so, when you stop to consider most normal bank accounts only pay 0.5 percent interest. This is marcus high yield online savings account 0.5 per year, which is almost nothing and for the stock markets. Well, typically, four percent would be considered pretty decent, eight percent youd be flying already, and yet with cryptocurrency you could be making 10 20 30 returns so to back up. There are four general techniques that you can use to make passive income using cryptocurrency and lets go over them because theyre pretty interesting and some of them get pretty deep into d5. Actually, so they are c5 landing staking and liquidity. So lets go over these starting with c5, which is centralized finance. Now some of you may have already heard about services like block 5 celsius, voyager gemini earn crypto.com earn, and these typically offer anywhere from 8 to 10 returns on your us dollar, and so, for example, you can see block 5 gets. You 8.25 return on your usdc stablecoin deposits celsius gets you 8.88 youve got gemini earn, which gets you a little bit of a lower rate at 8.
05 percent. Voyager is at about nine percent for usdc deposits. Nexo is another popular service offering up to 10 apy on your usdc deposits and theyll give you an additional two percent if you elect to earn the returns in nexo tokens, and they do this interesting thing where, based on the number of nexo tokens that you hold, You get a higher earnings rate, so if you dont hold any nexo tokens, i think its just 8 earnings and then crypto.com also is similar and for them too. They have this program where, depending on the number of crypto.com tokens that you hold and they ask that you hold for about six months or so then their earnings rate fluctuates from ten percent up to fourteen percent. Typically, its going to be about twelve percent or so and so thats c5 centralized finance. These are kind of like banks right these services and they take your usdc deposits and then they get you some interest on that now. How do they generate this interest? Typically, its going to be through various means like lending it out or through liquidity staking, and you can actually do this yourself. I know that some people doubt and wonder: how are they able to generate such good returns? Well, it turns out that if you were to get into decentralized finance yourself, you can actually make these returns and even higher by yourself, but i would say perhaps for the general person who doesnt want to spend their time managing cryptocurrencies.
That decentralized exchanges offer a very simple, easy, clean way to generate passive income up to 10 or so on your cryptocurrencies. Now, what are the risks? Is this too good to be true? Well, certainly, any of these services can blow up. Maybe they lend out too much money and then they are not able to get their money back and maybe you could lose your deposit. Perhaps these services can randomly disappear or lose all of their funds in some random hack or maybe tether will blow up and then bankrupt all of these services and funds. So in that case my suggestion would be to just diversify your funds. Maybe choose four to five of these services. The chances of you losing all of your funds would have to be a cataclysmic event like usdc stablecoin, losing aspect to the us dollar or all of these services being regulated out of existence altogether or maybe tether massively blowing up and liquidating half of the cryptocurrency markets, Which maybe can happen, but at the same time you only live once yolo. Maybe just dont put all of your life savings in here now. Moving on to the second technique of earning passive income is through lending. So there are these services known as compound or ave compound was recently hacked and they lost some comp tokens, but they didnt lose the actual money, so theyre still okay. So what these services do? Is they allow you to deposit your tokens and you can generate some interest on that and they land your tokens out based on over collateralized loans? So maybe someone has to deposit twenty thirty percent additional collateral in order to borrow your tokens, and you can see that theyll offer you, like.
Maybe five percent on certain tokens. Four point: five percent on the die stable coin token, on usd sequin. You can get four 4.5 interest and then on ave, which is a similar lending protocol, you can get 6.04 back on your usdc coin deposits and you can deposit all sorts of various assets and generate a little bit of return on these. Now. Typically, these returns arent going to be super high, but its also pretty low risk, its a single coin – deposit, very simple: to do you just put your money in and you can start generating some return on that not too shabby its kind of like an online savings. Account or a high yield cd, except their interest rates already far outbeat those offered by typical banks. All right very cool now lets talk about the third way to earn passive income in cryptocurrency, and that is known as staking so typically proof of stake networks, for example, theyre going to want you to deposit some coins, and they will give you some staking rewards and You can actually participate in that so, for example, with binance smart chain, you can see that finance marching is actually a proof of stake network and you can stake your bmb tokens and so, for example, you can see here that binance has 21 validators and you can Stake your tokens for 10 to 12 percent yield on them and, for example, services, like trust wallet, will allow you to stake your bmb tokens so by the way, binance smart chain is known as a proof of stake authority model similar to proof of stake, except they Go by authority, they choose 21 validators that they pre select to use, and so you just pick one of these validators and you can stick through them, and so you can also do staking for other blockchains as well.
Like algorand, you can get point. One percent interest: cosmos adam: you could get seven point four percent interest and even ethereum 2.0. I know this if youre using kucoin so kucoin, for example, will let you stick into eth2 at 6.71 interest and then theres a few other services as well like, for example, if youre using pancake swap? If you got your cake tokens, you can earn 77 apy on your cake tokens which, if you believe that pancake swap is going to continue to do well or stay stable for the foreseeable future. Then this could be a half decent, speculative investment and then theres. Also one more interesting, very interesting, blockchain known as lunatera, in which, if youre using the anchor protocol, they will give you up to 20 interest on their coin, known as ust, which is backed one to one to the us dollar. Now i know what youre thinking 20 interest. Is that too good to be true? Well, maybe it is, but you can see that tara is currently the rank 11 cryptocurrency with 15 billion dollar market cap, so its a pretty big network. Some people seem to swear by it and if you check the stable coin, ust tara usd it has a market cap of about 2.7 billion and it seems to have been holding steady for at least a year. Although you can see it did lose its peg about 10 months ago, dipping to 80 cents per dollar and then back in may it dipped to 95 cents per dollar before recovering again quickly.
So there is going to be some risk to the tara usd, although, if youre hungry for that 20 yield, then this may be something to diversify into. And then you can come into the anchor protocol and deposit some of your ust coins into it. And, as i understand they generate this high interest through a combination of staking for the terror blockchain proof of stake network, as well as landing together, combined all right, so weve got c5 lending staking, and that brings us to our fourth passive income technique. The final one, which is liquidity, pairs liquidity when you think about it, is really the root source where all of this income is coming from when people are making their trades theres a little transaction fee, whether thats done through staking proof of stake landing c5. But all of it typically boils down to liquidity pairs, so this generates the highest returns if youre willing to dig deep into d5 and get into it so liquidity yield. Farming is really where the pros go. Now, if you check out million token, for example, whats million token by the way for those unaware – is one of the hottest social media driven cryptocurrencies, you can check out the project at milliontoken.org very interesting, exciting stuff going on there. But if you take a look, you can see in the past 24 hours there were 1600 worth of fees based on 1.5 million, total volume liquidity, and so, if youre, to do a little math, you take the total liquidity fees in the past 24 hours and you Divide that by the total liquidity there is multiplied by the total number of days in the year 365.
You would get the total apr annual interest rate, which comes out to about ‘ interest based on liquidity fees. If you were to supply liquidity for a million token, and so you can really do this calculation with any pairing to figure out the interest rate, for example, heres two stable coins, the usdc coin versus tether. You can take the 24 hour fees, which is 12.7 k. Divided by 135 million dollars of total volume liquidity, and you will find that the interest rate for this is about 3.4 percent. Now this rate is naturally lower because its also low risk youve got two stable coin, pairings and theres. So many people who have put liquidity in your 135 million dollars worth that all of them are sharing in that 24 hour liquidity fee. Now we can check some of these other parents, though, and figure out where we can find the more yield. Now, if you were to go to pancake, swap, for example, and thats on the finance smart chain, they actually show you what the apr is going to be. So they calculate the fees divided by the total liquidity and so, for example, the bmb 2 binance usd pairing gets you a 12.65 liquidity fee based on that, and some of these rates are just going to fluctuate all over the place, depending typically on the trading volume Versus the total amount of liquidity in there typically youre going to get the highest fees when theres a lot of trading volume, but very little liquidity in there.
So these are going to be relatively undiscovered pairs. Now, if we were to come back to million token, the hottest social cryptocurrency this time on pancake swap on the binance margin and check the liquidity pools well see that the bnb to mm parent actually gets you a 64 liquidity apr interest rate if youre to supply Liquidity there and thats, probably because theres going to be less liquidity on pancake, swap compared to say uniswap, so theres less people sharing in those trading fees. Now, if youre really interested in liquidity, yield farming – and you want to get deeper into it – theres some web services for this like curve finance, which kind of simplifies some of the process for this. But you can see that curve are going to help you create liquidity, pools. For example, they set up a pool here for die, usdc usdt, so these are three stable coins all packed to one dollar and based on this they can get you say, 2.6 apy and what they do is theyre going to compound this, for you and the ui Is pretty old school? One of the higher rates here is tether. Bitcoin, ethereum pool and theyll give you six point three percent api based on the liquidity trading fees there. Now, if you want a higher rate than that, then you need to find areas where there is less liquidity and so, for example, if youre to go to another blockchain right, ethereum is so saturated.
Everybody knows about ethereum, but if you were to go to polygon network, you can actually get much higher rates over there. So this is where things start to get very interesting, because the rates start to get very good. So if youre to use quick swap, which is one of the leading decentralized exchanges for the polygon network, you can come here and check the liquidity pairings, and you can see that were getting some pretty good rates here, like, for example, even the usdc to die. Stablecoin pairing, you know these are two very safe stablecoins. You can get 10 apy based on the liquidity fees. Here. I think this was just one or two percent back on the theorem and then, if you were to check the matic to usdc parent, you can see you can get 25 apy if you deposit a liquidity pairing for that now, by the way it bears mentioning that The risk for liquidity providers is known as impermanent loss where, if the price of the two paired assets changes too much like, maybe in, for example, in mavic usdc, if mavic drops suddenly, then you just end up buying all of the mavic and if the price goes Up then, you end up selling all of your mavic, so typically its at an unfavorable direction for liquidity providers. You typically just dont, want the price to move so thats. Why stable coins, for example, are such good safe place? But then again those are very saturated areas.
Now, in addition to providing liquidity, pairs, theres, actually something known as farming as well, where some of these exchanges oftentimes will provide you additional incentives if you lock up your liquidity stakes, so, for example, once youve created a liquidity pairing a lot of these exchanges, you can Come into the farm – and you can actually deposit that – and i can see here that, for example, the usdc to usdt these are two stable coins. They will give you some quick, swap tokens every day, just for fun. Now the quick swap tokens it turns out and theyre, not that funny, because theyre valued at currently like 400 per token, and so when you factor in the price of those quick swap tokens that you get rewarded. Your total apy comes out to 14 for simply depositing a stable coin, pairing of tethered to usdc coins on polygon network for the quick swap exchange, and so this is currently incentivized and you may be wondering well, where are these quick swap tokens coming from? Well, you can see that polygon had extended a one million dollar grant to quick swap to boost liquidity on the platform, so they use this to bolster liquidity across various trading pairs. So thats one thing, but beyond that the quick tokens serve as kind of a governance. Token, so they have some value representing pretty much the value of the quick swap exchange in and of itself. Now, if youre, to come back to curve, finance and curve finance also supports polygon, you can see that they support some parents.
For example, they have a parent here for three stable coins, diet, usdc and tether, where you can get its like 16 apy. Basically, based on this, if you wanted to deposit into this pool and then they just manage this whole liquidity pool for you and do compounding interest for you. So, if youre willing to go through the effort of getting onto these alternative, blockchains, then thats, where you can see really much higher liquidity yields, and that brings us to moon river as well now million token recently bridged onto moon river. By the way you can check that out, but if you go to moon swap so with this moon river, by the way, its essentially like ethereum ported onto the kusama blockchain for proof of stake – and you know this is a very new young blockchain and so the Liquidity fees here are going to be quite high. For example, you can see tethered to usdc. These are two stable coins. Gets you 10 apy easily on moonswap and really you can do the same and get onto other blockchains as well, for example avalanche avax network, and so they use, for example, pangolin exchange thats, another decentralized exchange for them, and you can see that this is also offering Pretty good liquidity fees and curve finance also supports avalanche and so now using curve on avalanche. You can see that you can get 20 interest based on a triple liquidity, stablecoin pairing of thai usdc and tether, and if you wanted to add bitcoin and ethereum to it, then you can get a 30 interest on that which is really quite good.
Theres. Also, another network that ive been looking into known as phantom its another blockchain that essentially scales ethereum to layer two, and so they also have a number of exchanges. Spooky swap is one of the bigger ones, and you can see that the liquidity pairing for usdc to phantom gets you. Eighty percent apy and liquidity fees and thats, not to mention in their liquidity, form theyre, actually incentivizing. This parent, giving an additional 33 apr for total of 111 apr interest on your usdc to phantom pairing. Now you would just take note that this parent does come with some risk of and permanent loss, and, if thats, not for you, you can look for. Maybe a more stable pairing, maybe like a stable coin to stable coin pairing or something like that so crypto passive income. It is one hell of a drug, defy yield farming. If you do decide to get into it, i might suggest to just diversify, because typically the higher interest rate you want the higher risk you may be taking on as well. Now, if crypto passive income gets you excited, then i might suggest you check out million token, because we are adding staking and yield farming 2 million token as well such that you can earn interest on your million token, through a new project known as million dollar farm Simba stake, so this is a brand new project and one that im really excited about launching this week. Zimba: stick where you can stake your d5 tokens in simbas, secure vault, you can earn passive income and it gives you simba tokens, which is a dial token for governance, theres, going to be chances for free tokens, airdrops amas with the developers and then the simple steak Launch happens later on in the week, so personally, im excited to see what happens with this project.
You can check out at million dot farm and then you can learn about million token at milliontoken.org and just take note that this project, by the way is developed entirely by another team. So im not affiliated with it but thats. What makes million tokens so cool because it is entirely decentralized and theres, so many people working on so many exciting projects, another one you should check out is lion, run dot io by the way, which is also built on million token and so line run, is a Metaverse, for the million token community, with nfts games, loots, airdrops and tons of fun exciting, very active projects, so check them out over at lionrun.io and theres. So many other interesting active projects in the million token community. You can learn about at the million token discord, so thatll do for me hope you enjoyed the video. Let me know in the comments below.