Decentralized finance (DeFi) helps users generate additional profits and can provide a source of passive income. The interest rates are significantly higher than those offered by banks and investment companies. In this review, you will find information about the four best decentralized exchanges where you can earn additional income.
We have already discussed the DeFi pioneers and mentioned that these platforms offer fewer opportunities for ordinary users. They are mostly used by experienced traders. However, newer platforms can offer ways to earn passive income without much effort. Trying to find their niche and outrun their competitors, their developers offer a wide range of additional services.
The exchange was launched in 2020 and has already become one of the top platforms in the DeFi market. This platform has everything to offer to the crypto community — from its stylish design to its advanced features. The platform operates on the blockchain known as the Binance Smart Chain.
PancakeSwap has taken advantage of the popularity of food-related exchanges and has promoted itself as an exchange associated with enjoyment. Actually, one cannot but enjoy the features of this decentralized exchange. Apart from trading crypto, users can generate income by supplying liquidity (participating in yield farming). The native token known as Cake is not only a governance token but a source of income of its own. Users can stake it in a “syrup pool” to earn high interest.
Users can also participate in lotteries or try and predict the token price. At the time this article was written, the token had a market capitalization of $2,479,769,722, and a price of $8.8.
The total value locked in the liquidity pools is just above 5 billion U.S. dollars.
This decentralized exchange designed by Chinese developers operates on the HECO blockchain (Huobi ECO Chain) which is EVM-compatible meaning that it supports smart contracts. This automatic market maker has operated since January 2021 and provides the following capabilities:
- exchange of tokens on the HECO and BSC blockchains using such wallets as MetaMask, WalletConnect, and Coinbase Wallet;
- creating liquidity pools;
- supplying liquidity to existing pools;
- trading in pairs of tokens;
- staking the native token (MDX) and other tokens;
- providing a bridge between the HECO, BSC, and Ethereum blockchains;
- participating in the decision-making process by voting with MDX tokens.
The yield rate of the liquidity pools is very high with some pairs earning over 250%. The interest is accrued according to a flexible procedure which means that with some luck users can earn a rather high income. The risks associated with crypto volatility remain but are usually compensated by the high interest rates.
All transactions are based on the native token (MDX) with a market capitalization of $217,898,850 and a value of about 25 cents.
The exchange is a great option for investors who are willing to risk, hoping to win big. So far, the platform has been developing actively and has made it to the top ten platforms on the Binance Smart Chain according to the total value locked.
The protocol was created and launched in 2019, and it is characterized by having an N-dimensional invariant surface. Unlike all automatic market makers, it allows locking more than two tokens in liquidity pools. In 2020, the exchange introduced its native token (BAL) which currently has a market capitalization of $132,745,585 and a price of about 19 U.S. dollars.
Initially, the project was created as a protocol for developing dApps, but later, the exchange actively developed due to the addition of investment portfolio management features. Traders are responsible for portfolio rebalancing according to certain arbitrage opportunities. They have access to the Smart Order Router that helps them find the best trading routes.
Another food-related exchange was established in 2020. This is a UNISWAP fork. The concept itself is based on the restaurant terminology: the services are provided by chefs, and the hub itself positions itself as “Michelin-star worthy”. Apart from the unique concept, the exchange offers the following features:
- liquidity pools;
- staking the native token (SUSHI) in a sushi bar pool — the tokens help users earn 0.05% of all swaps from all liquidity pools;
- BentoBox — an app that generates passive income.
The exchange has a market cap of $457,486,410, and a total value locked of $176.9 billion. 2,700 token pairs are traded on the platform. The price of the SUSHI token is $3.6.
If you decide to try your hand at trading on decentralized exchanges, always keep the following rule in mind.
You can only spend and invest the money that is not critical for you and your family.
Use the money you can afford to lose because the risks of DeFi exchanges are rather high, and the tokens are volatile. The potential profits are determined by your predicting abilities and also partially by luck. However, millions of users have already benefitted from the capabilities of decentralized exchanges.