Decentralized Finance. Most of DeFi products are platforms rewarding the users for lending assets. Basically, you lock your assets on their platform so that they could use it for the utility they provide (generally swapping), and they reward you with yield.

Where traditional banking products would be getting you something like 0.5% APR, you can still easily get +5% APR even on stable coins in those bear market times.

Raydium Protocol offering 8.52% APR on USDH-USDC pair.

When you come across a 30% APR on a safe pair

When you come across a 30% APR on a safe pair

Some platforms even provide yield farming, so you can also check APY. APR stands for Annual Percentage Rate, APY stands for Annual Percentage Yield. It takes account of the compound interest. In other words, the rewards you get are automatically put into the protocol so you get more yield.

I won’t really get into details on how those products work, but I’ll give you some tips on how to stay safe. The tips are in no particular order.

1. DYOR. Seriously, you could be tempted to go on some farm offering 10% daily APR (yes, that’s a thing). And that could be a good option if you know what’s going on (in other words, if you have some insider info and/or you’re an expert trader). Basically, not doing prior research before investing is basically throwing money by your window hoping the wind will bring it back to you.
2. Don’t be greedy. There’s probably a reason this farm is 10% daily. Unless you know exactly what you’re doing, don’t go there. Also, some platforms offer leverage. Once again, do your research about how it works and avoir risky plays like x3 leverage.
3. You should prefer farms with at least a stable coin in the pair. This way, if the other coin gets down, you won’t loose everything since the stable coin is, well, stable. (Although sometimes it’s not true, 👋🏻 UST).
4. You should prefer farms with well known coins. I’d say that if you HAVE to do research, it’s probably not a good idea to put your money in it. Don’t get me wrong, this could be, but it’s definitely not safe. Pairs with native tokens, or wrapped native tokens (like wBTC, wETH etc), and a stable coin, are less likely to get you liquidated.

Still on Raydium, good pairs like SOL-USDT get you 26.76% APR

1. You should not put all your eggs in the same basket. I did that mistake multiple times out of greed and it didn’t work well. If you split your assets on multiple blockchains, multiple DeFi platforms, and multiple farms, you’re less likely to loose your money. And yes, the more blockchains you use, the more research you should do.
2. Only invest what you can afford to lose. You may already know this one but this can’t be repeated enough. That’s the actual key to mental health in the crypto space, and the best solution not to loose everything and become homeless. Especially if you have a family with kids etc.
3. This one works for stable or semi-stable farms. Set it, and forget about it. Checking your rewards 3 times a day won’t make it yield more. On the contrary, you may start to think that it’s not fast enough, get greedy and/or loose your mental health (which is kind of important).
4. TAKE PROFIT. Probably one of the most important advice. It took me almost a year to do it, because I was afraid of missing an opportunity. FOMO (fear of missing out) is real, you never earned anything until you took profit, keep that in mind.

I think I’m done about the DeFi tips for now, but generally speaking, you should not expect to earn serious money instantly. Trading is a job. Crypto is still finance and it requires skills, that take time to get. It’s a lot of work actually.

Before you earn, you’ll be loosing money. That’s almost a guarantee. You’re going to get liquidated, maybe rugged, or scammed. You’re going to make bad decisions, bad investments, follow bad advice. Hopefully you won’t do all of these, and if you do, you won’t do this twice, but who know.

I have done some mistake twice, even thrice.