How You Can Gain More From Your Bitcoin?
There are many ways for users to make money from their Bitcoin holdings. Although Bitcoin DeFi has often been overlooked, there are some up-and-coming opportunities to experiment with. Passive income is a very appealing option when holding volatile cryptocurrencies for the long term.
What we are going to learn?
Putting Your Bitcoin To Work
The obvious solution for users looking to make money with Bitcoin is to trade BTC. The price will go through several peaks and lows every day, enabling traders to scalp quick profits and build up their portfolios. However, this requires a very active approach to trading, which isn’t suited for everyone.
Spending hours upon hours a day looking at price charts is a nerve-wracking experience. It is not advisable for newcomers to the space, as there are many things to learn and understand about how these markets behave. Going in blind is a recipe for disaster and will often destroy portfolios within hours, if not minutes.
Holding Bitcoin for the long term is often a more promising approach for newcomers and industry experts. Bitcoin is one of those assets that tend to become more valuable over time, even if severe price pushbacks exist. Those who have bought and held BTC often find themselves in a profit after a few years, requiring no active maintenance.
While one holds their bitcoin in a non-custodial wallet, it is worthwhile to explore other opportunities. Putting that BTC portfolio to work to generate additional passive revenue is a good option. Decentralized finance often relies on non-Bitcoin assets, although several protocols take different approaches. Bitcoin has the most liquidity of all cryptocurrencies, it is a crucial cog in the DeFi machine.
Bitcoin DeFi Is Growing
When people think of decentralized finance, they will automatically look into Ethereum. It is the largest ecosystem for decentralized building, including DeFi, NFTs, blockchain gaming, etc. Moreover, the network has dozens of protocols for users to choose from. Bitcoin DeFi has a handful of options to choose from, a number that has grown steadily in recent months.
The majority of efforts involving Bitcoin pertain to stablecoins. Notable projects include Rootstock, Money On Chain, and pTokens. Additionally, the Stacks network will play a key role in advancing decentralized finance for Bitcoin users. The independent layer-1 blockchain leverages Bitcoin’s network security and ensures multiple Stacks transactions can be bundled into one Bitcoin transaction.
A new contender leveraging the Stacks technology stack is Zest Protocol. Although it is still in the testing phase, Zest will introduce sustainable Bitcoin yield for liquidity providers exploring its lending pools. It is an on-chain Bitcoin capital market enabling on-chain financing without liquidation threats. Additionally, it is a passive income stream for Bitcoin holders.
The team wants to tackle the $120 trillion bond market and bring it on-chain to the most secure blockchain there is. Additionally, Zest Protocol gives users an option to turn unproductive BTC in a wallet into a productive asset generating yield. A big step forward for the crypto industry and another example of how viable Stacks’ smart contracts are to take Bitcoin DeFi to the next level.
A Bright Future Awaits
It is good to see developers look at ways of incorporating the world’s leading cryptocurrency into decentralized finance. Some may argue Bitcoin doesn’t need DeFi, yet decentralized finance can thrive by incorporating BTC. There is much untapped liquidity where Bitcoin is concerned, but these solutions need to be as decentralized as possible.
Slowly but surely, there are now viable alternatives to wrapped tokens and moving BTC liquidity to a different chain. Projects like Money On Chain and Zest Protocol introduce new opportunities for those who are content to hold Bitcoin for the long term yet want to explore low-risk yield generation opportunities.