The bitcoin as a financial asset has increased dramatically in popularity over recent years. While the continued adoption of cro ITRE and the ramps and ramps become accessible, the user base of Bitcoin has considerably developed and diversified. In recent years, institutional interest has increased. While the Hodl culture within the community continues to be dominant, users today wonder whether the asset can also be used for passive income.
Andreas Antonopoulos - a popular Bitcoin advocate , recently discussed whether Bitcoin , as passive income, was a viable idea for many crypto users and the risks associated with crypto-based loans at DeFi and other depositary services. He argued that while the community has always popularized hodling and focused on price appreciation only through market forces, Antonopoulos noted that appreciation cannot really be guaranteed. In terms of generating passive income via cryptographic assets without having to hand over your coin to another party, Antonopoulos pointed out:
“Another option without giving your parts to someone else is to use a decentralized financing contract. What you could do is you could convert your Bitcoin to Ether or directly to Dai , which is a stable coin, and you could put it in a platform where you could lend DAI and earn interest ”
However, he noted that there is a level of risk that users will have to assume in such a scenario. He noted that the transition from Bitcoin to an Ethereum -based platform involves security risks, as the two platforms are not necessarily the same in terms of security. Antonopoulos also pointed out,
“The underlying platform, which is Ethereum , may have problems. There may be bugs. The consensus algorithm can fail. You may have increases in the price of gas, which causes other cascading problems. And all of this can cause you to lose some or all of your invested capital. "
However, Ethereum's DeFi ecosystem continues to be a very active space for lending in recent years with earning mechanisms within DeFi; with Dai Savings Rate (DSR) Dai holders can earn passive income by depositing Dai in the contract.
Source: DeFi Rate
Earlier this year, a DeFi Rate report found that,
" Maker and DSR have offered the most profitable savings opportunity in the past three months - just when MCD was first introduced in November 2019. Compound - the loan protocol without permission - offered the second highest return on Dai assets with an average of 90D of 5.23%.
However, although the lending prospects are lucrative, Antonopoulos noted that another major platform risk involved bugs in smart contracts, but noted that simply hiding the crypto may not guarantee return on investment and risks are inevitable.
More information to earn interest on your cryptocurrencies: https://passioncrypto.com/touchez-des-interets-sur-vos-crypto-monnaies/
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