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2. Intermediate Course

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  1. 1. Ethereum 2.0 - What is it? 
  2. 2. What is cryptocurrency burning?
  3. 3. How to create your own cryptocurrency? 
  4. 4. Blockchain Oracle - what are oracles? 
  5. 5. How to make money with NFT?
  6. 6. What is an ERC20 token and how is it created?
  7. 7. The Metaverse – a new virtual world
  8. 8. Metaverse – TOP 15 virtual reality projects
  9. 9. Technical analysis – is it worth using?
  10. 10. What are DeFi liquidity pools?
  11. 11. Second layer (layer 2) - what is it? 
  12. 12. What are wrapped tokens 
  13. 13. What is the Lightning Network, and how does it work?
  14. 14. What are security tokens?
  15. 15. What is play-to-earn (P2E) and how does it work?
  16. 16. What are Social Tokens? 
  17. 17. Examples of the use of WEB3 on the blockchain
  18. 18. What is Web5? 
  19. 19. Ethereum London Hard Fork - what is it ? 
  20. 20. Segregated Witness - what is Segwit Bitcoin all about?
  21. 21. Polkadot - Decentralized blockchain and DOT cryptocurrency
  22. 22. Polkadot Parachain - Next-generation blockchain
  23. 23. Set up of Stop Loss and Take Profit orders
  24. 24. Trading order types: stop loss, trailing stop loss, LIMIT
  25. 25. What are Decentralized Cryptocurrency DEX Exchanges?
  26. 26. What is Curve Finance?
  27. 27. What is GameFi and how does it work?
  28. 28. Non-fungible tokens and NFT exchanges
  29. 29. Cryptocurrency steps - What is move to earn M2E?
  30. 30. What is Proof of Reserves (PoR)? How does it work?
  31. 31. Interoperability in the world of cryptocurrencies and blockchain
  32. 32. Blockchain and its layers - What is layer three in Blockchain (L3)?
  33. 33. What is Layer 0 in Blockchain technology?
  34. 34. What is layer 1 in Blockchain?
  35. 35. What is MakerDAO and DAI Stablecoin?
  36. 38. What is the SubDAO protocol, and how does it work?
  37. 39. The main differences between static NFT and dynamic NFT
  38. 40. Liquidity Provider Tokens (LPs). What are they, and why are they so important?
  39. 41. What is KnowOrigin NFT, and how does it work?
  40. 42. What is decentralized social media?
  41. 43. What is the Ethereum Name Service (ENS) and how does it work?
  42. 44. Arbitrum: Ethereum scaling solution - everything you need to know
  43. 45. Ethereum ERC-4337 - what is it and how does this standard work?
  44. 46. Sustainable Blockchain - Proof of Useful Work & Flux
  45. 47. Ethereum Proof-of-Stake (PoS) - what should you know?
  46. 48. Atomic Swap: What is an atomic swap, and how does it work with cryptocurrencies?
  47. 49. What Is Cryptocurrency Vesting? What Are Its Advantages?
  48. 50. What Is the Metaplex Candy Machine Protocol? How Does It Work?
  49. 51. What Is the BNB Greenfield Ecosystem?
  50. 52. Real Yield in DeFi - what is this trend? What does it consist of?
  51. 53. Polygon 2.0 - the value layer for the Internet
  52. 54. What Is Slashing in Cryptocurrencies?
  53. 55. How to Create Your Own Decentralized Autonomous Organization (DAO)?
  54. 56. The ERC-721X VS ERC-721 Standard – Key Differences!
  55. 57. Royalties – What Are They? How Does This Type of Licensing Fee Work?
  56. 58. Polygon 2.0 - the value layer for the Internet
  57. 59. ERC-6551 - the new NFT standard. What does it bring to the non-exchangeable token sector?
  58. 60. What is TradFi? The importance for cryptocurrencies!
  59. 61. What is the Real World Asset (RWA) trend in cryptocurrencies? Explanation and examples!
  60. 62. Pyth Network: a powerful oracle harnessing the power of Solana!
  61. 63. NFT Gas Fee - what is it? How can you reduce your gas fee?
  62. 64. MINA Protocol: the lightest blockchain in the world!
  63. 65. Market Cap versus Fully Diluted Market Cap - the most important differences you should know!
2. Intermediate Course 52. Real Yield in DeFi – what is this trend? What does it consist of?
Lesson 50 of 63
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52. Real Yield in DeFi – what is this trend? What does it consist of?

Real Yield is a trend in decentralised finance (DeFi) that few have heard of. The very concept of this idea is  interesting.  DeFi protocols pay out profits in major currencies – Bitcoin (BTC), Ethereum (ETH), USDC or BUSD.  In this case, the funds come from the actual revenue of the protocol.

Well, today we are going to analyse the pros and cons of this trend. Is there really anything to get excited about? In the cryptocurrency industry, opinions about Real Yield are divided. Without further ado – let us get to today’s lesson!

Real Yield – definition

Real Yield is very similar to dividends from shares. It involves investing our funds in the DeFi protocol, through which it generates income. Of the income so generated, we as investors have a small share.

The real gain is to show that decentralised finance is sustainable, healthy and safe. Investors earn from the returns that their funds actually generate, whether it is chained credit or the provision of liquidity.

What distinguishes Real Yield from other investments is the ‘real’ part. To put it more bluntly, in this case, our profit is not based on unsustainable issues of tokens and other strategies. Any protocol that uses a real profit strategy must earn more than it spends. Therefore, in practice, it profits more from revenue than from token emissions and any operating expenses.

Why is an investment strategy based on real returns so tempting? Because it allows us to earn an income with far fewer worries. We do not have to worry about the fluctuating value of the token because we do not receive rewards in the form of tokens.

Why do we need Real Yield in DeFi?

The concept itself aims to create a reliable passive income market. It is such a kind of demonstration of the maturity of the decentralised finance (DeFi) market. Real Yield is based on two, key principles:

  1. When you support DeFi Protocols, basing your strategy on real profit, your interest is paid in a stable cryptocurrency such as BTC.
  2. The return on your investment is based on actual activity.

Real Yield does not involve any additional tricks or additional risks. It exploits the potential of decentralised finance, in particular algorithms and intelligent contracts to further increase the amount of returns.

Can DeFi Protocols afford to pay out such high returns?

Yes, why? Because decentralised financial institutions can operate with lower overheads than traditional financial institutions. As a result, they offer users a more competitive rate of return, making liquidity providers all the more enticing.

In addition, all decentralised financial protocols are built on decentralised networks. This means that the allocation of our capital is even more efficient. A more efficient allocation of capital means a higher profit.

As a curiosity, we would like to add that one of the factors for such a high profit in DeFi is the use of management tokens. They represent ownership of the protocol, which allows voting on its development and direction.

DeFi protocols that offer real gain

Dopex. The DeFi protocol, which provides Single Staking Option Vaults. It works like conventional cryptocurrency staking. This option allows users to lock assets for a specified period of time. They then provide liquidity to the vault while providing a profit on the staked assets. The project also provides options for trading on various underlying assets, such as Ethereum (ETH) and Bitcoin (BTC).

Another example of such a protocol is GMX. The project allows users to monetise their own digital assets, by providing liquidity to a decentralised exchange. Very significantly, GMX DEX, is something of a hybrid exchange that combines the functions of an AMM and a limit order book.

Synthetix is also a Protocol DeFi with a Real Yield option. In this case, profits are generated by providing liquidity on a decentralised exchange for synthetic assets. In this case, we have the possibility to trade synthetic assets without a centralised intermediary.  The protocol offers real returns to SNX holders – around 53%.

Summary

Real Yielding is a nice addition to the protocols of decentralised finance (DeFi). It provides investors with more real and, above all, secure returns on their investments. Will this strategy, or rather the offering of decentralised applications, stay with us permanently? We will find out.

Decentralised finance is a real treasure trove of passive income generation. Remember that real profit is a great, more sustainable option. At the same time, protocols have less capital, to invest in their projects. So you can see that Real Yielding has its pros and cons!

Complete your lesson!

  1. Liquidity pools in the cryptocurrency market. [BEGINNER LEVEL]
  2. What is DeFi (decentralised finance). [BEGINNER LEVEL]
  3. What are DeFi liquidity pools? [INTERMEDIATE LEVEL]
  4. What are synthetic assets? [MASTER LEVEL]