Andreas Antonopoulos, the Bitcoin educator, says that Any current method of earning a stable income from Bitcoin’s personal property is risky, but DeFi offers one of the few ways to do it without “passing your money on to anyone”.
He said this in a live broadcast of questions and answers on Antonopoulos’ YouTube channel on June 27th Decentralized financing agreements (DeFi) were a way for Bitcoin owners (BTC) to generate residual income without giving up custody of their currencies. “Passive income” refers to money that is earned using methods that require little or no effort.
According to Antonopoulos, investors could convert their BTC to Ethereum (ETH) or a stable coin like Dai (DAI) and then lend it to a platform where the token can earn interest. However, he said that the implementation of such Trading on Ethereum-based platforms was “fairly risky” in terms of security, faulty smart contracts, and the platform itself:
“Ethereum can have problems. It can have errors. The consensus algorithm can be incorrect. Gas prices can go up, which leads to other waterfall problems. And all of these things can cause you to lose part or all of the capital invested.”
Borrowing and borrowing cryptocurrencies can be a risky game due to the high volatility of digital currencies. with a large number of crypto-based loans that are used for secondary trading. However, The volume of these loans reached USD 8,000 million last yearand can continue to attract investors.
HODLING is not the only way to win
Although Antonopoulos mentioned other ways that investing currencies work for them, almost every opportunity meant trusting a deposit. The Bitcoin educator said such investments carry the risk of theft or mismanagement.
Bitcoin holderon the other hand They don’t earn dividends or interest on their investments – or anything else – until they finally decide to collect. Antonopoulos says the owners expect appreciation, but “what goes up can go down.”
The Bitcoin educator says this also applies to Cryptocurrency Day traders: “You can take out and convert your Bitcoin, buy 1,000 altcoins, and watch them drop 98%.”
Antonopoulos is not the only defender of DeFi
Other members of the crypto community have commented on the creation of passive income through DeFi loans. Cointelegraph reported in March that OKEx director of financial markets Lennix Lai said: “The combination of cryptocurrencies and DeFi offers users an alternative way to earn passive interest that was previously not possible.”
The Ethereum 2.0 release later this year may offer users the opportunity to earn residual income by wagering money.
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