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How To Maximize Yields On Crypto

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Reading Time: 4 minutes

How To Maximize Yields On Crypto

Generating a passive income is the holy grail, the million-dollar question for every investor regardless of the asset class. In the crypto world, DeFi is the gift that has given token holders the chance to earn a yield on their cryptocurrency investments.

So, with that in mind, we’ve put together some great tips for maximizing your cryptocurrency investment yields.

Read on to find out more!

Liquidity Pool Creation

First, before you start yield farming, you’ll need a liquidity pool, made possible by a smart contract that secures farm finance. 

Depositing Assets by Investors

Connecting digital wallets allows investors to add funds to the liquidity pool, similar to a consumer putting money in a mutual fund or exchange-traded fund (ETF) or making a deposit at a bank. We sometimes call this “staking” for short.

Smart Contracts Borrowing

Many operations are easier with the help of smart contracts, such as lending money or increasing the liquidity of a market for exchanging cryptocurrencies.

Rewards

Depending on the type of farming yield, you could be eligible for different types of interest, bonuses, and other benefits at some point in the future.

How to Earn Yield Farming on Your Crypto Holdings

Staking, lending, and cryptocurrency yield farming are all methods for earning cryptocurrencies. Each strategy is quite different, so let’s run through the many ways to boost the value of your cryptocurrency.

1 – STAKING

When you stake cryptocurrencies, you utilize part of your holdings to support the validity of other blockchain transactions. And there is no predetermined period to wait before withdrawing your tokens. However, after you’ve unstaked your tokens, there’s usually a delay until they’re restored to your wallet. This amount of time is frequently referred to as the “cooling” period.

Many of the best cryptocurrency exchange platforms enable you to stake your cryptocurrency. You can do this by going to the platform’s “Earn” page and learning more about the platform’s crypto staking options. The next step is to choose your preferred action and stake at least the minimum amount of crypto required by the platform. Then you can sit back and watch your money grow while doing nothing.

Benefits

Because it doesn’t require specific technical skills, getting started is simple, even for beginners.

You don’t have to create a wallet outside the exchange to earn from staking.

Many exchanges provide simple tax reporting for your staking incentives.

2 – LENDING

Cryptocurrency financing takes place on a dedicated marketplace. Peer-to-peer crypto lending takes place on social finance platforms. On crypto borrowing and lending services like BlockFi, tokens can be used as collateral for loans. Investors can then “borrow” your tokens for trading or other transactions on the lending platform. The loaned tokens are returned to the lender with interest after a certain period.

Lending via an exchange is much like lending through a bank or other financial organization. ‘Lenders” are not traditional banks but rather crypto lending platforms that collect “funds” from investors by selling tokens.

Benefits

Cryptocurrency lending can reach more people since it eliminates the need for traditional bank accounts.

Lending revenue may be reported easily on tax forms provided by most exchanges.

3 – YIELD FARMING

The term “yield farming” refers to a collection of methods for mining cryptocurrencies used together to maximize profits. Investors engage in yield farming when they shift their tokens and coins to the platforms with the greatest APYs. When investors act as liquidity providers in yield farming, they provide the tokens necessary for an Automatic Market Maker (AMM) to make cryptocurrency swaps with traders. Like day trading, this requires constant attention to your open positions and the current yields of different tactics.

Benefits

If you diversify your assets among many different strategies, any one strategy’s failure won’t impact the rest of your holdings.

When compared to staking and lending, this method may provide better profits.

4 – LIQUIDITY MINING

The process of liquidity mining is a kind of decentralized finance in which users contribute a portion of their cryptocurrency assets to various liquidity pools. Participants get tokens and fees from the liquidity pools in exchange for their contributions.

Because it is possible to gain benefits from liquidity mining of cryptocurrency without making any active investing choices along the way, liquidity mining has become an extremely popular choice among investors. This is because it generates passive income. Your overall rewards are determined by how much liquidity you have access to in a pool.

DOUBLE YOUR INVESTMENT WITH THE SPEED OF LIGHT

With companies such as Bolide.fi, you can start with any amount and invest in a vast range of staking and farming options while choosing a risk strategy that best suits your risk appetite. Even better, there’s no lock-up period, and you can get APYs of up to 30%!

Here are some of the benefits of investing with Bolide:

  • A one-stop investment product with access to leading protocols
  • Automated, stablecoin investing produces maximum yields
  • Low-risk, market-leading yields of up to 30% APY
  • Earn an extra 20% staking your BLID tokens and enjoy 11% APY on Farming
  • Start investing with any amount
  • Hands-off, automated investments using your stablecoins
  • No lock-up period-access your funds and profits instantly

– No withdrawal limitations

Starting your yield farming and staking journey is easy with platforms like Bolide. Simply visit Bolide.fi, connect your crypto wallet, deposit either $USDT / $USDC / $DAI / $BUSD, BTC, ETH & and you’re good to go.

Start earning interest at the speed of light with Bolide!

Visit Bolide.fi for more information on generating a passive income on your cryptocurrency investments.