How Do I Make Money in Crypto, Part 2

Fixed Rate Lending / Borrowing:

Protocols mentioned in part 1:

  1. Notional Finance (ETH only)
  2. Element Finance (ETH only)

Alternatives

Pendle and Tempus are both very similar to Element in that users stake yield-bearing tokens and the protocol splits these tokens into a yield token and an principle token. Another to watch here is Sense Finance, but their app is not live yet and it looks like it will only launch on Ethereum.

Availability

Pendle — ETH, Avalanche

Staking

Protocols mentioned in part 1:

  1. Lido Finance (ETH, Terra, Solana)
  2. Curve (ETH, Arbitrum, Avalanche, Fantom, Harmony, Optimism, Polygon, xDai)
  3. Convex (ETH only)
  4. Bancor (ETH only)

Alternatives

There are hundreds of other protocols that allow users to stake the native token in the protocol for rewards. For most revenue generating protocols, this is the primary mechanism for fee distribution for token holders. There are too many to list, however, a good place to start is to consider looking at DeFi Llama or Token Terminal for protocols with the highest total value locked and protocol revenue. (Just be careful, of the protocols that have tokens not all reward token holders with fees, like dYdX for instance, so be sure to check the docs for tokenomics details.)

https://www.tokenterminal.com/terminal/metrics/revenue

Providing Liquidity

Protocols mentioned in part 1:

  1. Curve (ETH, Polygon, Avalanche, Moonbeam, Fantom)
  2. Uniswap (v2 — ETH only, v3 — ETH, Polygon)
  3. Balancer (ETH only)
  4. Sushi — formerly SushiSwap (ETH, BSC, Polygon, Avalanche, Harmony, OEC, FUST, Telos EVM, Moonriver, Celo)
  5. Bancor (ETH only)

Alternatives

All DEXs require liquidity providers, so if there is a particular DEX or liquidity pool you are interested in investing in, it’s just a matter of finding it. It may seems like a tall order, as there are 374 DEXs according to DeFi Llama, but platforms like Beefy can help simplify the search. Also, you’ll want to find the DEXs with the highest volume in the particular pool you provide liquidity for.

Asset Managers / Yield Aggregators / Yield Farms

Protocols mentioned in part 1:

  1. Yearn (ETH, Fantom)
  2. BadgerDAO (ETH only)
  3. Beefy Finance (BSC, Polygon, Avalanche, Harmony, Cronos, Moonriver, Fantom)
  4. Alpha Finance (ETH, Avalanche)

Alternatives

Asset managers and yield aggregators are primarily tools to simplify the process of providing liquidity while adding additional features. Essentially, they all layer these tools on top of various DEXs so picking one versus the other is simply a matter of finding one that supports you choice of tokens and chains.

Option Vaults

Protocols mentioned in part 1:

  1. Ribbon Finance (ETH only)
  2. Squeeth (ETH only)

Alternatives

There are two main types of options protocols: structured products and marketplaces. Ribbon Finance and Squeeth, a product from the Opyn team, are both structured products which employ options strategies automatically in a particular product. Messari describes these protocols as “protocols [which] sit on top of option marketplaces and offer vaults for users to deposit funds into. Each vault executes a defined options-based yield strategy underneath abstracting complex pricing and risk management away from users. Similar to how Yearn executes yield farming strategies for money markets and exchanges underneath their vaults.” Marketplaces are markets where users can buy and sell individual options on particular tokens.

Availability

StakeDAO — ETH, Avalanche, Harmony, BSC, Polygon

Nodes

Protocols mentioned in part 1:

Nope.

Alternatives

Pass.

Outsourced / FaaS

Protocols mentioned in part 1:

  1. Exponential Capital (ETH only)
  2. Reimagined Finance (ETH, BSC)
  3. Node Squared (ETH only)

Alternatives

Many. I added Aggregated Finance, purely as a valuation play, but these are still very risky. While there are some that trade on Avalanche or BSC, buying these tokens is trusting the team to not only deliver technically, but also the investment team to beat the market. I’m comfortable with the names above and will just leave the rest alone.

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