Introduction
Decentralized finance, or DeFi, is revolutionizing the way investors can generate passive income through cryptocurrencies. By leveraging smart protocols primarily based on Ethereum and other compatible blockchains, it is now possible to lend, borrow, or provide liquidity while earning attractive yields. However, given the multitude of available options, it is essential to carefully choose protocols to optimize gains while managing risks. In this article, we present the best DeFi protocols to generate passive yields in 2024.
What is DeFi and why invest?
DeFi refers to a set of decentralized financial services that operate without traditional intermediaries like banks. These services are accessible via decentralized applications (dApps) on blockchain. One of the main advantages of DeFi is the ability to generate passive income by providing liquidity, lending crypto-assets, or participating in staking pools, often with yields higher than traditional financial products.
Ethereum remains the most used blockchain for DeFi thanks to its robustness and rich ecosystem. Solutions on other blockchains like Binance Smart Chain, Avalanche, or Solana are also gaining popularity, offering reduced fees and competitive yields.