Bad market? 8 ways to teach you how to earn passive income with ETH

特邀专栏作者

2022-02-11 11:30

This article is about 2379 words, reading the full article takes about 4 minutes

Most people's ETH is idle for a long time, so it is better to use some low-risk strategies to earn passive income.

This article is based on the views of the DeFi researcher The DeFi Edge on his personal social media platform, which is organized and translated by BlockBeats as follows:

Original compilation: 0x137

This article is based on the views of the DeFi researcher The DeFi Edge on his personal social media platform, which is organized and translated by BlockBeats as follows:

Most people’s ETH sits idle for a long time, here are some low-risk ways to use ETH to earn passive income:

Method 1: Store in a cold wallet

Risk: 1/10

Method 2: Lend your ETH to a centralized institution (CeFi)

You can lend your ETH to companies such as Celsius Network, BlockFi, Hodlnaut, etc. They then lend it to hedge funds, trading platforms, institutional traders, etc., and that's where your income comes from.

I have calculated the annualized return based on 5 ETH in the figure below.

Pros: it's easy

Disadvantages: First, KYC is required.

Also, while they do take security very seriously, CeFi is not FDIC insured like banks are. You know, BlockFi's Token is managed by Gemini; and Celsius Network was also affected by the BadgerDAO exploit.

Risk: 3/10

Method 3: Pledge ETH directly

ETH 2.0 pledge is the process of locking the holder Token to help maintain the PoS network. By staking ETH, holders can earn additional ETH. But this has a big disadvantage. You need to pledge at least 32 ETH (about 100,000 US dollars), and you can't unlock it until ETH 2.0 is merged.

Here are some alternative options:

1. Staking through a centralized trading platform

Exchanges like Coinbase allow you to stake directly, with an APR of around 4.5%.

Pros: very simple

Risk: 2/10

2. Liquidity Staking

Liquidity staking solves the problem of directly staking ETH, it has no minimum pledge amount and lock-up. After depositing ETH, you will get a Token representing the ETH you pledged, such as stETH (stETH is Lido's version), this kind of Token is linked to ETH 1:1, and you can get pledge rewards through rebase every day. In addition, you can also use this type of Token for other DeFi activities, such as providing liquidity or lending.

Here are some liquidity staking platforms:

• Lido Finance - Most Popular, Highest TVL

• StakeWise - uses a dual-coin design that separates staked ETH and rewards

Risk: 2/10

Advanced operation:

Risk: 4/10

Method 4: Use Anchor Protocol on Terra

This is my personal strategy, when I first started the rates were much higher than they are now. On the one hand, Anchor is almost paying people to borrow money; on the other hand, I also hope to gain some exposure to LUNA.

Specific steps:

1. Convert your ETH to stETH at Lido Finance

2. Convert your stETH to bETH on Anchor

3. Deposit your bETH into Anchor as collateral

4. You can borrow up to 75% UST, but I recommend around 25% LTV

5. Deposit UST to earn 19.5% APY

Advantages: can earn UST, and aUST can increase production

Risk: 4/10

Advanced operation:

Risk: 5/10

Method 5: Using the Nexus protocol on Terra

Putting your bETH on Terra and depositing it with Nexus Protocol and earning 6.45% APR is easy.

Risk: 3/10

Method 6: Use ETH in the liquidity pool

solution:

You can bridge ETH to different chains. By bridging it to other public chains, not only will the value of ETH be maintained, but it will also significantly reduce your gas costs in the long run. These chains include: L2 chains such as MATIC and Arbitrum, and L1 chains such as AVAX and FTM. I think FTM has the most revenue opportunity right now.

You can use SpookySwap to convert your ETH to wETH and bridge it from the Ethereum mainnet to the FTM network. This way, you can use your own wETH in FTM's liquidity trading pairs.

In the bridging process, not only the gas problem needs to be paid attention to, but also the risk of cross-chain bridges should be considered. Wormhole was hacked last week resulting in most of the ETH being stolen, luckily people were compensated by the parent company. But not all cross-chain bridges are endorsed by "rich dads" like Jump Trading.

Method 7: Using Tarot on FTM

Deposit your wETH into Tarot Finance for unilateral pledge, with an annual interest rate of 6.6%.

Risk: 3/10

Method 8: Provide liquidity trading pairs on FTM

There are two options here:

1. The Grand Orchestra strategy on Beethoven x, after providing three trading pairs of FTM, WBTC, and WETH, you can get BEETS as a return, with an annual interest rate of 31.18%.

2. The FTM-WETH trading pair on LiquidDriver has an annual interest rate as high as 48%. Likewise, you will receive LQDR in return.