Decentralized finance (DeFi) is one of the crypto niches that is bringing real value to Web 3.0 users.
Commercial
This burgeoning ecosystem rose to prominence following the debut of governance tokens in the summer of 2020; today, there is more than $210 billion locked up in various DeFi protocols, according to Defi Llama’s on-chain analytics metrics.
Unlike centralized ecosystems, DeFi platforms remove the need for a middleman. This futuristic iteration of financial markets leverages non-custodial wallets like Metamask to enable user interaction.
At their core, most DeFi applications are built on a permissionless smart contract infrastructure, allowing anyone to interact with the featured products.
While DeFi has coined some overnight millionaires, not all of them have been lucky enough to make fortunes. A significant number of crypto users who store their funds in non-custodial wallets like metamask are only aware of spot trading opportunities. Much less than what the exciting world of DeFi has to offer.
So what are some of the other lucrative opportunities available to Metamask users? Let’s dive deeper into the next section of this article.
yield farming
Yield farming is one of the most lucrative opportunities in the DeFi market. This process involves lending or staking your funds on DeFi protocols to earn network incentives.
In exchange, one is rewarded through native tokens or stablecoins from a platform, depending on the reward formula presented.
The first yield farms were built on Ethereum, with protocols like Compound Finance and Aave. However, the landscape is now changing due to the high transaction fees on the Ethereum blockchain and its inability to scale efficiently.
DeFi innovators are moving to other Layer 1 chains (Solana, Avalanche, and Fantom).
Thanks to the interoperability of Metamask in various blockchain environments, cryptocurrency users can access multiple DApps built on the aforementioned chains.
This means that one can escape the high costs or limitations of a blockchain to take full advantage of other ecosystems. In some cases, hosted yield farms can offer over 100% APY.
DeFi management strategies
Like traditional finance, DeFi has evolved to feature a wide range of personalized services and products. This nascent ecosystem now offers novice and veteran investors the opportunity to actively manage their investments through automated DeFi protocols like HyperDex.
This DeFi management platform is compatible with the metamask wallet through the Binance Smart Chain (BSC) network.
As it stands, most DeFi users either lack the knowledge to invest in the right opportunities or end up taking on more risk than they can handle.
The HyperDex DeFi management solution fixes this by introducing cubic financial instruments, which feature four categories; Fixed Income, Algorithm Trading, Racing Trading, and Modular Cube Investments.
DeFi users looking to automate their investment strategies can choose a bucket that fits their appetite and risk profile.
In particular, the HyperDex ecosystem works through a native token called HPY. Platform users can take advantage of this token to reduce their transaction costs when performing on-chain operations.
Also, the HPY token is the incentive reward for early adopters of the HyperDex ecosystem. The platform plans to introduce exposure to other digital assets such as NFTs to scale its DeFi management strategies.
Play to Win Games
Play-to-Earn (p2e) games are another way Metamask users can diversify their cryptocurrency investments. These games have become especially popular in the last year as NFTs have become more widespread. Ideally, p2e games are designed based on the NFT architecture, allowing users to trade unique in-game items across various NFT markets.
Currently, blockchain-based games account for more than 50% of active wallet users in the DeFi and NFT markets.
These games are not only played by tech-savvy users, but also by prospects from developing economies like the Philippines.
The country made headlines in the crypto community when the majority of its population flocked to the Axie Infinity game.
While Axie Infinity’s returns have since plummeted, there are more upcoming games like Splinterlands that offer a similar if not better opportunity.
The metaverse led by Decentraland and Sandbox has also become a popular concept; NFT users can now purchase digital land and virtually participate in other passive income opportunities.
synthetic trading
For more sophisticated traders, you can opt for synthetic crypto assets. These are the tokenized version of a real-world underlying asset, such as stocks or real estate.
While synthetic asset trading does not have a huge fan base, there are multiple opportunities to earn an extra penny compared to holding idle funds on Metamask.
One of the DeFi platforms that feature synthetic trading is the crypto derivatives liquidity protocol Synthetix.
This decentralized ecosystem allows cryptocurrency users to mint and trade synthetic assets that can be backed by fiat currencies, stocks, commodities, or other digital currencies. In doing so, the platform has broadened the scope of DeFi investing, especially for advanced crypto traders.
final thoughts
The future of finance is rapidly being shaped through the DeFi market; This modern ecosystem will not only introduce financial freedom, but also more lucrative returns by cutting out the middleman part.
However, crypto investors have an obligation to keep up with the moving trends in order to fully capitalize on being some of the early believers.
With so much to do in the DeFi market, it would be unfair to stick to spot trading or limit yourself to the many opportunities this nascent field offers.
Non-custodial wallet users are better off learning how to transfer funds across various chains and diversifying their investments across different protocols and investment strategies.
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