DeFi Explained: How to Earn Passive Income with Decentralized Finance | by Raphael Monyei | The Capital | Feb, 2025
What if your money could work for you—without a bank taking a cut? That’s the promise of Decentralized Finance, or DeFi, a buzzing corner of the crypto world that’s turning heads in 2025. DeFi lets you earn passive income through things like staking, yield farming, and liquidity pools. But here’s the kicker: it’s not all easy money. There are risks, and the stakes can be high. Ready to unlock the secrets of DeFi and put your crypto to work? Let’s break it down step-by-step—so simple even your high school cousin could get it—while tackling the big question: Can you really make this work for you?
DeFi is like a financial playground built on blockchain technology—think Ethereum or Solana—where there’s no middleman. No banks, no suits, just code and crypto. It’s a system of apps (called dApps) that let you lend, borrow, trade, or earn interest on your digital assets, all peer-to-peer. The catch? You’re in control, but you’re also on the hook if things go south. In 2024 alone, DeFi’s total value locked (TVL) hit over $100 billion, according to DeFiLlama, proving it’s not just a fad—it’s a revolution. So, how can you cash in?
