One of the best ways to calculate passive income opportunities is to use Stakingrewards.com.
Here is a shortcut to finding good information:
- Go to Stakingrewards.com
- Click on Staking Providers
- Observe which companies are producing the highest yields
- Research those companies directly. Do they have a top-notch management team? Are they supported by other large investors? If so, these investors have already done some of the due diligence. Are they value-based, that is, do they have a business model that is plausible and believable to you?
There are a few other things to know: First, that you can lower your risk by staking – that is, lending – stable coins. Stable coins such as USD are tied to the U.S. dollar, so essentially you are lending dollars, so that this token can’t “go down” after you have lent it out, unless, of course, the dollar itself loses value. Therefore, your only risk is that the company borrowing your USD tokens is unable to pay you back if the company is hacked or some other major event.
It has happened. So some companies offer insurance, but keep in mind that insurance is only for hacking, not for the company itself losing economic value.
Note that just like any high-interest loan, the higher the interest, the greater the risk.
Also, keep in mind that you can withdraw funds early if you want. However, since the rate quoted is annual, you will only receive interest for the time the tokens were left in the account.
Once you have selected an opportunity, you can go to Aave or Yearn.finance to stake the coins. Aave also has the advantage of partnering with Polygon to offer gasless transactions.
In the Next Module learn how to use Defipulse.com