Decentralized financial markets or DeFi are the best place to earn money. Today, most financial markets and exchanges are decentralized, because both investors and exchanges pocket decent profits. On the other hand, DeFi or decentralized assets have a feature that is one of the most basic needs for investors these days. Security is a topic that is important for traders in the digital currency market in many ways. Defi is a concept and a process that reduces the limit of entering the digital currency market and also creates new opportunities to earn money. There are many ways to earn money in DiFi, and with the development of financial markets and the expansion of digital currencies, new methods are also created. In this article, we intend to   introduce you to various ways of making money in DiFi so that you can easily make money from it.

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What is DiFi?

Before starting and dealing with the methods of making money in DeFi, we are going to introduce you to the concept of what DeFi is. DeFi or decentralized finance means decentralized assets created through blockchain technology. The most common Defi in the digital currency market is Ethereum, which is the Ethereum network, the platform for many exchanges and digital currencies. Using the DiFi system, users can access the same services as in traditional banking. In traditional banking, people are able to borrow, lend and transfer their assets between different banks.

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The advantage that DeFi has over traditional banking is that there is no middleman embedded in this system and everyone is in direct contact with the buyer or seller. If you have noticed, the applications and wallets that we use today in the financial markets have a section called DApps. These programs are designed in such a way that people can transfer their assets without having to open an account.

Read more: What is DiFi 2?

Why is DiFi so popular?

DeFi or decentralized assets were created with the aim of creating high demand while reducing the fees charged. This process increased the capital of traders, so this new technology was able to overcome traditional banking. Defy introduced new ways to earn money, which are usually called passive income. This process is similar to the banks that give them profit in exchange for depositing in the bank, with the difference that it was implemented for digital currencies. In decentralized systems, people can increase the amount of their profit in account transactions or by means of levers. To get familiar with the concept of leverage and leverage, you can read the article What is leverage or leverage.

Ways to earn money in DiFi

The birth of DiFi caused the creation of new ways and methods to earn money from the digital currency market. These methods have become very popular among traders by bringing a lot of profit to investors. By entering decentralized protocols and other programs based on smart contracts, investors were able to earn a lot of profits from trading in the DeFi system. Among the methods that people can use to make money in DeFi, we can mention yield farming, staking and lending.

Yield Farming

Yield Farming or liquidity extraction is one of the methods of making money in DiFi. Using this feature, people can earn from the digital currencies they have in their wallets. Now maybe this question has occurred to you, how are you? You earn by participating in the farming process of another digital currency. In this way, you put your assets in the liquidity pool that is based on smart contracts. By putting your digital currencies in the liquidity pool, you are somehow contributing to the lack of liquidity of the exchange. Therefore, the exchange rewards people who solve the problem of lack of liquidity of the exchange. But it is interesting to know that the exchanges do not pay any out-of-pocket costs for this and they are paid entirely through the transaction fees of the liquidity pool.

Read more: Getting to know the liquidity pool

staking

Staking is one of the best ways to earn money from decentralized financial markets. By locking their funds in exchanges for a specified period of time, people earn rewards from the exchange. This method is the same as depositing in traditional banking, with the difference that it brings more profit for the individual than depositing in traditional banking. When people enter their digital currencies into the staking process, they are no longer able to withdraw it, and this is the main difference from holding. If you want to know the difference between yield farming and staking, read the article What is the difference between yield farming and staking in digital currencies.

lending

The ability to lend is one of the most interesting features in the Debfay system. This feature gives people the ability to earn money by uploading their assets to a lending platform. People’s assets are put into a liquidity pool, and other people who need them borrow that asset in return for paying an interest rate equivalent to 9%. After the fees are paid by the lender, something like 8% of the interest rate is given to the lender and 1% to the exchange, which is a significant profit. Making money in DiFi through lending is better and more profitable than other methods.

Read more: What is liquidation?

Conclusion

There are many tools and methods to earn money from the digital currency market, but it is difficult to use them without taking digital currency training courses. Defay or decentralized assets is one of these methods that unknowingly entering them can have irreparable consequences. Staking, yield farming and lending are important and lucrative categories of the digital currency market, from which you can easily earn money. But making money from these things requires having enough knowledge about each of them, and on the other hand, you must know the market well. In general, tools and methods, as much as they are profitable, can cause a lot of damage to investors. In this article, we tried to introduce you to the methods of making money in DiFi, so use them carefully in your transactions.