A new wave of investors has recently entered the Crypto industry, hungry for the best returns possible on their investments. They’ve come at the right time, as in today’s evolved market, there’s now more opportunity than ever to generate better returns and yields on their assets.
These opportunities come in many forms, with DeFi and yield farming proving to be the most popular options for investors.
Now, even the most casual, novice Crypto investors are becoming actively involved in the DeFi scene and generating better yields on their assets than ever before.
It’s easier than it sounds to get started, and once you start earning, you’ll find yourself seeking the best returns possible.
Here are the three best ways to generate passive yield on your Cryptocurrency, even as a novice investor.
Table of Contents
DeFi Yield Farming
Proving itself to be the best way of generating stable yields from your Crypto, yield farming involves securing your assets on a platform via a liquidity pool to become a liquidity provider. Rewards are then generated from fees and interest earned on the platform.
The yields that you earn vary on each platform, ranging from 20-100% APY returns based on the liquidity pool that you choose. The beauty of yield farming is that platforms accept popular coins, ranging from top 10 coins, altcoins and stablecoins, making the initial set-up simple and accessible to all investors.
Yield farming started with AAVE and Compound, two early innovators for earning yields on stablecoins. Now, more popular platforms like SushiSwap, Uniswap and Yearn Finance provide stable, reliable yield farming that provides far greater returns on your Cryptocurrency than simply holding in a wallet or on an exchange.
Most well-known platforms, like the ones listed above, are secure and relatively low-risk to use. They have been audited, tested rigorously and have proven themselves to be the most trustworthy platforms on the crypto market. They offer more stable yields, ranging from 5-50% and are seen as the lowest-risk to reward option in the Yield farming space.
Recently, more high-risk yield farms have appeared on both the Ethereum and Binance Smart Chain networks, which offer far higher yields but with greater risk. The most reliable benchmark to consider is the TVL (Total Value Locked) on a platform, which is a solid indicator of how healthy the platform is and how successful the returns are. Put simply, the higher the TVL on a platform, the more funds have been secured, meaning more yields are generated.
When choosing a platform to yield farm on, a low-risk, high TVL platform is always the safest option you can choose. Of course, high-risk options will naturally return more yields. However, potential risk should be managed more carefully.
Crypto Interest Accounts
Crypto interest accounts are seen as the safer option for investors, especially for those that don’t wish to use DeFi and yield farming platforms. More suitable for novice and long-term investors, these accounts offer compounding interest, ranging from 1-20%, on your assets.
The appeal with Crypto interest accounts is being able to secure a myriad of Cryptocurrencies or Stablecoins and earn stable, compounding yields on them. With Cryptocurrencies, the most popular platforms can offer rates of between 2-6% on market-leading coins like Bitcoin, Ethereum and Chainlink.
Investors can earn even higher yields on Stablecoins, which are Cryptocurrencies that are pegged to an external value like the dollar to stabilize prices. Stablecoins like USDT and USDC can generate yields from 10-20% on these platforms, which eclipses rates offered by savings accounts from traditional banking systems.
The appeal of storing on a Crypto interest account is now far greater than holding coins on an exchange or storing in an offline wallet, prompting a recent surge in interest from investors looking to earn yields on long-term investments like savings in Fiat currencies.
The most popular options available are BlockFi, Celsius and YouHodler, all of which offer a safe and reliable alternative to yield farming. Opening an account is easy, only requiring identification and KYC (Know Your Customer) procedures to get started.
Once your account is verified, you can transfer your coins into your account, which is a Cryptocurrency wallet, and then start earning weekly/monthly rewards. Some Crypto investment accounts also offer a Fiat gateway, meaning you can buy Cryptocurrencies on the platform and have them sent straight in your wallet on the platform, removing the sometimes confusing process of sending and receiving Crypto.
As with all cryptocurrency products, these accounts come with an enhanced risk profile that doesn’t exist with government-backed fiat currency. However, if you wish to generate maximum value from long-term investments or savings, a crypto interest account provides genuine value and a fantastic opportunity to generate better yields on your assets.
Staking platforms are one of the more complicated ways of generating yields on your assets, but can also be the most rewarding for long-term holders. Very similar to DeFi Crypto platforms that utilise yield farming, staking involves securing assets in a native wallet and performing various network functions like validating transactions or operating nodes to generate rewards.
These platforms use Proof of Stake as their method of producing rewards, meaning that the network produces and validates new blocks through the process of staking the coin. The native staking pools allow stakeholders to combine their computational power and increase their rewards. During the staking process, the yield rewards are locked in a wallet, and over time, more coins are added to that wallet as a reward.
The most popular staking coins include Algorand, Cardano and Polkadot, all of which are popular, well-recognised coins within the industry. Whilst this method is more suited for whale investors that hold large amounts of coins, staking your coins in a platform you’re invested in can help the network grow in price and recognition, whilst also earning you rewards and yields ranging from 2-9%, all of which are provided in the native coin.
Most of these staking solutions require you to stake on a native wallet or platform, which can be confusing to initially configure and maintain. However, exchanges like Binance and Coinbase are now offering high APY%, fixed-period staking on selected assets, making it easier than ever to secure your funds and start generating staking yields on your assets.
As always, staking your Cryptocurrency using these methods comes with natural risk. Bugs can appear in smart-contracts and hacks can occur, so do your own research and complete the necessary due diligence when choosing a staking platform.
One of the better options to consider for generating yields on your Cryptocurrency assets is Drixx Earn, an integrated Crypto finance provider that helps clients earn high yields on their assets with just a few clicks through its user-friendly interface.
Drixx utilizes advanced yield techniques that enable the delivery of market-leading average APYs on stablecoins of up to 18.6% whilst eliminating the hassle associated with configuring wallets, accessing different chains and interacting with yield farms. All Drixx customers receive the highest possible APY% for their chosen strategies, with no hidden tiers or token allocation required.
When using the Drixx platform, interest is paid out daily instead of weekly or monthly and additional funds can be added at any time. Funds can be withdrawn at any time without losing accrued interest, and Drixx never charges you any fees or commissions for adding, withdrawing or holding funds. Investors can also take full advantage of our “Set & Forget” feature, which automatically reinvests and compounds yields for you.
Drixx Earn keeps interest rates stable over time due to highly regulated risk policies that allow you to retain instant access to your capital while earning interest, whilst Military-grade security is used to ensure the safest, most reliable yield farming platform on the market.
Setting up an account is a simple, 3-step process too:
- Open a free account
- Transfer funds in one of the supported coins (USDT/USDC)
- Start earning best-in-class yields on your assets.
It’s time to move on to the banking of the future. Start generating the best yields with Drixx Earn today.