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<p>Over the past decade, the cryptocurrency market has increased tremendously. It is currently worth over $3 trillion, with tons of opportunities to grow your wealth.</p><p>With the innovation of DeFi, everyone now has acces to making a profit in the crypto industry. DeFi is one of the fastest-growing sectors within the crypto industry, with several benefits compared to centralized finance.</p><p>Anyone can get involved in DeFi – with platforms that don’t require KYC, there is no ID or bank account required to get started, making it a great solution for the unbanked or underbanked to access financial services.</p><p>And with more advanced DeFi solutions being built, the user experience issues have been solved, meaning even non technical users can be onboarded. You don’t have to be a developer or a miner to earn passively from your crypto assets.</p><h2 id="header-0">What is DeFi?</h2><p>Decentralized finance is an ecosystem of financial tools and applications built on blockchain technology.</p><p>Unlike the traditional banking system (centralized finance), DeFi requires no third parties to carry out financial transactions. Instead, DeFi depends on peer-to-peer networks like <a href="https://www.rsk.co/" rel="noopener noreferrer nofollow">RSK </a>and smart contracts that allow people to manage their assets.</p><p>DeFi applications (Dapps) make it possible to participate in investment strategies like Yield farming (staking) and lending. Investment strategies like lending and staking are high-yield crypto investments that you can use to:</p><ul><li>Make profit</li><li>Increase your assets</li><li>Manage your assets</li></ul><p>The following section will cover what staking and lending are, and how you can take advantage of these investment strategies.</p><h2 id="header-1">What is DeFi Lending?</h2><p>DeFi lending allows you to stake (lock) your crypto assets on a lending platform for lending to other users (the borrowers) for an interest. DeFi lending is carried out on DeFi applications (DApps) called lending protocols.</p><p><a href="https://finance.yahoo.com/news/lending-protocols-rise-defi-lending-191340220.html" rel="noopener noreferrer nofollow">Lending protocols</a> exist to connect lenders to borrowers without intermediaries. Borrowers can take loans directly from a lender through these platforms with the help of smart contracts. DeFi lending offers a permissionless environment with no preferential treatment for anybody.</p><p>Once the conditions of your agreement are set, it can’t be manipulated. So, lending protocols offer a straightforward way to lend your assets for long-term investment and get higher interest rates. Some platforms also offer margin trading options.</p><h2 id="header-2">What is DeFi Staking</h2><p>Staking is locking your crypto assets into a smart contract on a blockchain to become a validator on a Layer 1 Blockchain or DeFi protocol. In return, you’ll earn a reward for performing the duties of a validator.</p><p>Think of staking as temporarily committing or locking away your cryptocurrencies until a specific time in exchange for profit. The process is like a fixed deposit in the banking system. You won’t have access to withdraw your assets until the stacking period is over.</p><p>You can stake your crypto assets through <a href="https://coinmarketcap.com/alexandria/article/what-is-yield-farming" rel="noopener noreferrer nofollow">Yield Farming</a> or<a href="https://academy.bit2me.com/en/what-is-liquidity-mining/" rel="noopener noreferrer nofollow"> Liquidity Mining</a>. When you lock your crypto assets, you can become a validator in a Proof-of-Stake Blockchain network.</p><h3 id="what-is-proof-of-stake">What is Proof-of-Stake?</h3><p>The Proof-of-Stake (PoS) was created as an alternative to Proof-of-Work (PoW); it reduces the amount of work required to verify blocks and transactions that keep blockchains secured.</p><p>PoS cryptocurrency consensus mechanism validates transactions using the validators' (coin owners that staked coins) devices. To become a validator, you must stake your coins in a smart contract on the blockchain. The system then randomly picks validators to validate or mine a block. Once you’re selected, you get a reward for completing the validation process.</p><h2 id="header-3">Differences between Lending and Staking</h2><p>The major difference between staking and lending is how they are used. You lend your assets to other traders and earn an interest in return with lending. While staking involves locking your crypto to secure the network and get rewarded.</p><p>Also, staking involves locking your assets for a pre-defined period; during this period, you don’t have access to withdraw. On the other hand, most lending platforms allow you to withdraw your earnings anytime you want.</p><h2 id="header-4">Why Stake/Lend Your Assets</h2><ul><li>Earn Passively<br></li></ul><p>Lending or staking is an excellent way for you to earn passively on your crypto assets. You don’t need any trading or technical knowledge to earn with crypto lending or staking</p><ul><li>Self-Custody<br></li></ul><p>You’re still in control of your assets even when you lend or stake – only you have access to your private keys. Unlike a centralized system where you loose control of your funds to earn passively, DeFi lending and staking lets you maintain in control.</p><ul><li>Permissionless<br></li></ul><p>Anybody with a crypto wallet and asset can access lending and staking pools. Regardless of your geographical location or societal status, you can lend or stake as long as you have internet connectivity.</p><h2 id="header-5">How to Stake or Lend Your Crypto Assets</h2><p>Here are the basic steps to follow when you want to lend or stake your assets:</p><ol><li>Pick a Platform<br></li></ol><p>The first step is to pick a suitable DeFi platform that supports staking or lending. Before choosing your platform, ensure that it supports the tokens you want to use. There is a range of lending/stacking platforms to choose from on the <a href="https://www.rsk.co/openfinance/" rel="noopener noreferrer nofollow">RSK ecosystem</a>.</p><ol><li>Choose the Crypto asset<br></li></ol><p>Next is to decide on the crypto assets you’d like to stake or lend. In most cases, go with the crypto assets you already have in your crypto wallet. However, you can buy crypto assets with the intention of staking or lending. Want to use your Ethereum tokens in the RSK ecosystem or vice versa? Cross them on the <a href="https://tokenbridge.rsk.co/" rel="noopener noreferrer nofollow">token bridge</a>.</p><ol><li>Lend or Stake Your Crypto Assets<br></li></ol><p>Follow the instructions on the DeFi platform to lend or stake your assets. On most networks, you simply have to select the asset to stake or lend and choose the number of days.</p><h2 id="header-6">DeFi For Bitcoin: Lending and Stacking</h2><p>The RSK ecosystem allows DeFi protocols to build their solutions in the Bitcoin ecosystem. Secured by the Bitcoin Network, the RSK ecosystem is the safest smart contract blockchain in the world.</p><p>You can stake or lend your crypto assets on any of these decentralized applications hosted on the RSK ecosystem:</p><p>Sovryn: <a href="https://sovryn.app/" rel="noopener noreferrer nofollow">Sovryn</a> is an on-chain decentralized Bitcoin lending and trading platform on the RSK platform. The Sovryn protocol builds a permissionless financial layer for Bitcoin, extending Bitcoin’s properties into the financial sphere.</p><p>Tropykus: The<a href="https://tropykus.finance/" rel="noopener noreferrer nofollow"> Tropykus protocol</a> offers accessible digital loans and credit products. It helps Bitcoin users to get financial returns on their funds. Tropykus provides a lower interest rate and better profit margin without giving up ownership of funds.</p><p>Money on Chain (BTCX): The BTCX is a <a href="https://moneyonchain.com/btcx-long-leveraged-bitcoin/" rel="noopener noreferrer nofollow">BTC/USD trading</a> backed by the Bitcoin ecosystem. You can take advantage of the leverage to trade long on the Bitcoin/USD pair for massive returns.</p><p>To view all of the different solutions for staking and lending the Bitcoin ecosystem, visit the <a href="https://www.rsk.co/openfinance/" rel="noopener noreferrer nofollow">Open Finance chart</a>. Happy lending and staking!</p>

DeFi For Bitcoin: Lending and Staking

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