5 Easy Steps to Start Earning Passive Income with DeFi | by Alex Nova | The Capital | Jan, 2025
In the era of digital transformation, decentralized finance (DeFi) has emerged as a revolutionary concept, promising financial freedom and opportunities for passive income. If you’ve been wondering how to get started, this guide will break down everything you need to know in five simple steps. By the end, you’ll have the foundational knowledge to start earning passive income in the DeFi space confidently.
Before diving in, it’s essential to grasp the core principles of DeFi. At its heart, DeFi eliminates intermediaries, such as banks, by using blockchain technology to enable peer-to-peer financial transactions. Popular blockchains like Ethereum and Binance Smart Chain power most DeFi platforms.
Key Concepts:
- Staking: Locking up your cryptocurrency to support the operations of a blockchain network and earn rewards.
- Yield Farming: Lending or staking your crypto in exchange for interest or additional cryptocurrency.
- Liquidity Pools: Pools of tokens locked in a smart contract that provide liquidity to decentralized…
