Turn a Brainless 8% Monthly Passive Income Into a Financial Waterfall

Traditional retirement planning investment assumptions include things like "investments will historically return 8% annually." Annually? It feels ridiculous to say it, but it's pretty easy to earn 8% monthly in the crypto markets right now.

Yep, look around, and you'll find plenty of places to earn 100% or more APR. These rates aren't sustainable, but they're very real right now. It's an opportunity. It's not without risk, though, and the question becomes, How do you take advantage of the opportunity while minimizing risk?

Diversification is the answer. Don't keep all your eggs in one basket. In this story, I'll share a few ways that I do this.

One of my favorite cashflow-makers is Cake DeFi. I keep a small amount of DFI staked, earning 100% APY. It compounds twice daily, which means it's earning approximately 2% per week. (I know this isn't exact, but let's try to keep the numbers easy to work with.)

So, what do I do with my 2%? I could let it compound and earn even more. This is perhaps what traditional wisdom tells us to do. "The magic of compounding interest!" However, that would mean I'm increasing my exposure--and vulnerability--to DFI.

Instead, since crypto has many options, I move my earnings to a different account to earn an equally high rate. I love PancakeSwap's Syrup Pools for this. You can stake CAKE for about 100% APY.

This strategy is still compounding interest, but it's creating a waterfall effect across apps and tokens. DFI staked with Cake generates rewards that are used to fund CAKE which will be staked at PancakeSwap. (Cake vs. CAKE/Pancake is a confusing point while discussing this!)

Now, the cool thing about PancakeSwap is that they're constantly introducing new Syrup Pools. You can use the CAKE that you accumulate to earn new tokens, and the rates typically exceed 100% for their first few days. Use this to get new tokens, or swap those rewards back to CAKE and keep compounding.

If you're considering Cake DeFi, now's a great time to join. They have an "Olympic Bake-off" promotion that will reward you $50 for signing up, and the value of DFI is around $2.50--but it's creeping back toward its all-time high of $4 along with the rest of the crypto market. That $50 bonus could easily be $100 soon with value increases and staking returns. To earn the bonus, sign up and deposit $50. (If you need a referral code, please use 273734.) You can even withdraw your original $50 after you receive the bonus!

Use the cash flow you generate from Cake to balance your crypto portfolio, transfer it into other high-earning projects like PancakeSwap, or let it compound and earn more.

Lead image by Mike Lewis HeadSmart Media on Unsplash

I'm not a financial advisor, and this isn't financial advice. Do your own research and understand the risks. I write to share my experiences because it's fun and for your entertainment. The sign-up link in the article is a referral link, and I earn a commission if you join--I appreciate your support if you use this link.