It’s time you put that crypto sitting idle in your wallet to work for you — generating passive and residual income for you and systematically building up your cryptocurrency portfolio — using one or more of these popular DeFi products and services.

New to DeFi? Click here to read our beginners’ guide to decentralized finance.

By leveraging the blockchain and cryptocurrency technology, DeFi makes it possible for anyone, anywhere to enjoy or provide financial services in a trustless and transparent manner.

Below are some of the most popular financial services currently supported by DeFi which you can take advantage of to effortlessly generate passive and residual income with your crypto assets:

  1. Lending
  2. Staking
  3. Liquidity Pooling

NOTE: This is not an exhaustive list of all financial services available in DeFi, but only those with which you can use to put your crypto assets to work and earn passive income.

1. Lending

Crypto assets lending and borrowing are arguably the biggest sectors in the DeFi ecosystem. Enabling you to lend out your idle crypto assets and earn low-risk interests.

How does it work generally?

  1. Deposit your crypto in a secure Ethereum wallet that only you control the private key.
  2. Connect your wallet to the DeFi platform you have chosen to use.
  3. Offer to lend out any of the supported crypto assets on the platform.
  4. Earn interest.
  5. Disconnect your wallet to discontinue the lending.

It’s as simple as that.

Some of the most popular DeFi lending platforms that you may want to consider using include but are not limited to:

  1. AAVE
  2. Compound
  3. Cream Finance
  4. Fulcrum

For a more complete list and their current interest rates, please check out DeFi Rate and the projects’ respective websites.

Note: Yes, yes, I know. MAKER DAO is the biggest lending and borrowing DeFi platform but is not included here because you can only borrow DAI there. You cannot earn by lending-out your own crypto assets. The platform is the lender and you can only borrow.

2. Staking

DeFi Staking is the act of allocating your crypto assets to desired validators or node operators in a Proof of Stake blockchain (PoS) network, who uses your “stake” for creating, proposing, or voting on blocks production and other network decisions and shares their daily staking rewards with you.

How does DeFi staking work?

  1. Hold your crypto asset in a staking wallet that only you control the private key. Click here to find a list of the top 5 Best Staking Wallets to consider using.
  2. Make sure the cryptocurrency you want to stake is supported in the chosen wallet.
  3. Find out which of the staking-as-a-service providers or validators or node operators are available to stake with.
  4. Stake your crypto and start earning, daily, weekly, or monthly staking rewards.

Each token has its own unique staking processes which are usually simple and easy enough for even a newbie to execute. So ensure to families yourself with the staking process for the specific crypto asset you wish to stake.

3. Liquidity Pooling

Liquidity pooling is the process of providing your idle crypto assets as liquidity on decentralized exchanges (DEXs) such as Uniswap, IDEX, 0x, AirSwap, Bancor, Kyber, Paradex, Radar Relay, etc for the benefit of earning a share of the exchange trading fees.

How does liquidity pooling work?

  1. Hold your crypto assets in a wallet that only you control the private key.
  2. Connect your wallet to your preferred decentralized exchange (AMM).
  3. Provide liquidity for your desired pool
  4. Earn a share of the exchange trading fees
  5. Remove liquidity at any time to reclaim your funds and your earned rewards.

It’s that simple!

Click here to learn how to provide liquidity on Uniswap. The process is similar for most AMMs (automated market makers).


Money doesn’t like to be idle.

So put that crypto you are HODLing tight to work for you today and begin earning extra, passive, residual, daily by lending, staking, or providing liquidity with them on DeFi platforms.

Invest responsibly. You alone are responsible for your investment decision and actions.

Do your own research (DYOR) and understand the risks associated with investing DeFi and crypto generally before putting your money into anything.

And of course, you already know that this is not investment advice.

What other ways do you earn with your crypto holding in DeFi? Share with us in the comments section below.