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How to make money on DeFi (Hint: It’s not hard.)

How to make money on DeFi (Hint: It’s not hard.)

Decentralized finance (DeFi) is changing the way people interact with their money.  However, we know it can be a lot to take in. Don’t worry, because we’ve put together this quick guide to give you jump start.

Start making money on DeFi in 4 steps

If you’re familiar with Ethereum, these steps will only take a few minutes. And when it’s all said and done, you’ll be earning interest in DAI every block. However if you’re completely new to Ethereum, you may instead want to check out Zero to DeFi, a beginner’s guide which breaks down the entire process of getting a wallet, acquiring ETH, and lending out your DAI.

1. Get ETH into an address that you own

As the saying goes, if you don’t hold the private keys to the wallet, then they aren’t your coins. So, be sure to perform these steps from a wallet that you hold the private keys to. And, don’t forget to keep them backed up somewhere safe.

2. Head to DEX.AG and sell most of that ETH for DAI

DEX.AG is a decentralized exchange or DEX aggregator that gets you the best price available from several of the most popular DEXes. It even splits your trade across multiple DEXes if it improves the price, all in one transaction. Make sure to leave a little ETH leftover for gas fees.

3. Go to DeFi Pulse’s Earn Income page

DeFi Pulse is a site where you can find the latest analytics and rankings of DeFi protocols. The DeFi Pulse Earn Income page compares the interest rates you can earn from DeFi lending protocols.

4. Pick a lending protocol, and start earning interest

Enter the asset and amount you wish to lend to find which lending protocol has the best interest rate. Pick a protocol and click the ‘Next’ button which will redirect you to that app/service. Compound finance is currently the most popular lending protocol. Follow the app’s instructions to begin lending out your DAI and start earning interest.

And then later, when you’re ready to cash out…

Head back to the lending protocol you chose and use your private key to unlock the DAI plus interest generated whenever you want. There’s no “lock-in” period or time you have to wait before earning interest. Your DAI is earning interest every block until you choose to stop.

Still have questions? Come chat us in our Discord and stay up-to-date on the world of DeFi by following us on Twitter.

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