In the volatile cryptocurrency market, many investors miss opportunities for passive income. This article will share a simple and stable strategy—lending stablecoins or locking in fixed income through DeFi platforms—to help you steadily accumulate more crypto assets without frequent trading. This article is based on a piece by Igor Jerkovic, organized, compiled, and written by TechFlow.
(Background context: The market correction is painful, more suitable for the lazy U-based financial strategy here)
(Background supplement: The market correction is tricky, suitable for a laid-back U-based financial strategy Vol.2 here)
I am a software engineer with over 15 years of experience, actively involved in the cryptocurrency industry since 2017. Currently, I am experiencing my third crypto cycle (I am currently developing the DeFi Koala project). Throughout these cycles, I have noticed a common phenomenon: many of my friends always buy cryptocurrency at the peak of each four-year cycle—usually at price highs—only to experience significant unrealized losses (and realized losses if they sell).
However, those who do not sell usually keep their tokens in centralized exchanges, thus missing out on the opportunity to earn passive income. Even those who profit from selling often let their stablecoins sit idle, waiting for prices to drop before buying back in. I share this because trading is indeed difficult, but there are better ways to accumulate more crypto assets without frequent trading.
A Common Mistake: Ignoring Passive Income
Through conversations with many cryptocurrency holders, I found that most people are unaware that they can earn yields from the assets they hold. In this article, I will share a simple strategy to help you achieve passive income through cryptocurrency.
Simple Strategy: Lend Your Stablecoins
One of the easiest ways to earn passive income is to lend your stablecoins (such as USDC) to borrowers in need, thereby earning interest. Decentralized finance (DeFi) lending platforms typically require over-collateralization, meaning that borrowers must deposit collateral worth more than the loan amount. If the value of their collateral approaches the loan amount plus interest, they face liquidation, and lenders will be automatically repaid.