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8 ways to get defi yield

Found a great video to understand defi yield

Justin Bram on defi yield

Risks: I tried to figure out what the risks were on each one. I guess the first and biggest risk is the protocol itself, is it buggy or secure. That's probably consistent for every single one below, and I consider it a defi risk rather than specific to the yield strategy. The second risk is the pyramid risk, one thing built on top of another, built on top of another. Derivative risk from the underlying

  1. Supply capital on a money market like Compound, Aave, Anchor
  • It's lending money
  • Risk: What happens if the borrower defaults? Is that possible?

2. Swap fees like on Uniswap

  • Providing liquidity for an automated market maker, by putting in two different coins into a protocol that provides liquidity for someone who wants to swap one for the other.
  • Risks: Rugging, where someone dumps a particular coin and drains the matching asset

3. Proof of stake staking

  • Stake your tokens, ie lock them up, in proof of stake, and you get rewards
  • Risk: The reward tokens are worthless

4. Inflationary rewards paid out by Curve which is a swap platform

  • Pay users a bonus in the native Curve governance token to use the platform
  • IronFinance collapsed by giving out too many tokens
  • Risk: The reward tokens are worthless

5. Protocol Fees - Get a share of fees from the token like Liquity

  • Fee accrual token from the project, paid out in non native token, USDC ETH
  • Risk: None? Just the fees are small, and this is clearly a security

6. Options Contracts like Ribbon Finance, Hegic

  • Sell covered call and covered put options
  • Risk: None?

7. Selling insurance like Unslashed

  • Supply capital for insurance
  • Risk: None?

8. Arbitrage Transactions - Arb between assets which should be trading at the same price like Stabilize

  • Some assets should be the same price, when there is a price differential, then there is yield in buying one and selling the other
  • Risk: None?