Decentralized finance (DeFi) as an industry is growing at a rapid pace, with the DeFi ecosystem first reaching a valuation over $100 billion in mid 2021. DeFi projects are still in their infancy compared to traditional finance (TradFi) and undergoing a correction in 2022, so now could be a good time to invest in DeFi.
In this guide, we explain how to invest in DeFi across a number of popular methods – such as interest accounts, staking, farming, leveraged loans, and more. How to Invest in DeFi – Top Methods
If you are learning how to invest in DeFi for the first time, the 10 best ways to do this are listed below:
> Invest in DeFi Coin (DEFC) – Undervalued DeFi Project in 2022
DeFi Staking – Generate a Yield by Locking Your Tokens
DeFi Savings Accounts – Earn Interest via a DeFi Savings Account
DeFi Yield Farming – Earn a Share of Trading Fees by Providing Liquidity
Invest in DeFi Stocks – Gain Exposure to DeFi via the Stock Market
Secured DeFi Loans – Leverage Your Crypto Investments by 50%
Get a DeFi Wallet – Store Tokens and Earn Interest via a DeFi Wallet
Invest in DeFi Smart Portfolio – Pre-Made DeFi Portfolio Managed on Your Behalf
Hold Stablecoins – Enjoy DeFi Rewards Without Volatility
Invest in NFTs – Add NFTs to Your Portfolio via a DeFi Marketplace
The above DeFi investment products will differ in nature when it comes to risk and potential returns. As such, we explore the above methods in great detail in the following sections of this guide. A Closer Look at the Best Ways to Invest in DeFi
All DeFi investments carry an inherent level of risk. Moreover, the DeFi investment that you choose will determine how the types of yields on offer and whether or not you need to lock your crypto tokens away for a certain number of days.
If you’re wondering how to invest in DeFi to maximize your potential gains – consider one of the 10 methods outlined below. 1. Invest in DeFi Coin – Undervalued DeFi Project in 2022
A simple and popular way to invest in decentralized finance is buy the best DeFi coins to your portfolio. This means that you will be investing in a DeFi project by holding its native digital currency.
Like all crypto tokens, the DeFi coins that you buy will be listed on crypto exchanges – some offer a bespoke DeFi portfolio as a way to invest in DeFi crypto assets , which we’ll review further down this list.
Holding DeFi crypto, the value of your investment will go up and down throughout the day – based on the market forces of demand and supply. According to CoinMarketCap, there are now over 540 DeFi tokens that you can buy. Each token and project will focus on a specific area of the decentralized finance industry, so you will need to do some research to pick the right coin for your portfolio.One undervalued project currently is DeFi Coin (DEFC) – which launched in 2021 and aims to become the go-to hub for all things decentralized finance. DeFi Coin is the native token of the DeFi Swap exchange, a decentralized exchange which offers a variety of decentralized applications (dApps) and tools.For example, DeFi Swap allows users to buy and sell digital tokens without requiring a centralized entity. The platform also offers staking and yield farming services, which come alongside high-interest yields. DeFi Coin itself is built on top of the Binance Smart Chain and it carries an innovative taxation system that penalizes short-term market speculators.The underlying smart contract does this by taxing sell orders at 10%. For instance, if you were to sell $5,000 worth of DeFi Coin on the open market, $500 would be tax, leaving you with $4,500. This $500 is then split into two and subsequently distributed between existing token holders and the DeFi Coin liquidity pool. As such, long-term investors are rewarded for their loyalty. Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk. 2. DeFi Staking – Generate a Yield by Locking Your Tokens Another popular method is to join a platform that supports crypto staking . The main concept of this way of investing in DeFi is that you will ‘lock’ your tokens for a certain number of days. In turn, you will generate interest on the tokens you have deposited. DeFi staking is therefore a passive way to make your tokens work for […]
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