Is it possible to generate revenue via Defi with Bitcoin? Risky, but doable. Andreas Antonopoulos says the best way to generate passive income with BTC is the DeFi platform.
Passive income gain on DeFi with Bitcoin
This is what everyone dreams of: making money with almost no effort. And it’s best to do it with cryptocurrencies.
Technology entrepreneur, author, and bitcoin supporter Andreas Antonopoulos has explained the best way to generate passive income with Bitcoin. Of course, it involves risk.
Antonopoulos said during a live interview at the weekend that the best way to make passive income with BTC is through decentralized finance — Defi, the much-talked-about area of the crypto sector.
DeFi is a decentralized financial system set up on the Ethereum blockchain and trying to transform traditional banking. The goal here is to make it easier for everyone to access services such as borrowing, giving, and saving money. Both without a bank.
“You can run your capital,” Antonopoulos says over DeFi. Put more precisely, you can generate interest income by borrowing transactions on DeFi with Bitcoin. Otherwise, your cryptocurrencies would be lying under a pillow. The best platform so far for this is MakerDAO, according to the expert.
MakerDAO is the second-largest DeFi platform. It has two tokens: MKR and Dai. The Dai token Antonopoulos is referring to is a stable coin and linked to the US dollar. This token is used to borrow.
Dai is created when borrowed from MakerDAO. Users borrow this cryptocurrency and then pay it back.
Antonopoulos says: “passive income occurs when you put your capital to work, and that has some risks as well. Another option is to use a DeFi contract. Here Bitcoin is converted to Ethereum, or directly to Dai. You can also borrow these Dai by putting it on the platform.”
But he also notes that moving from the bitcoin platform to the Ethereum platform has some risks. He explains: “you’re going to move from the bitcoin platform to the Ethereum platform, and the security here is not the same. Ethereum has some advantages and flexibility but they pay the price with some security.”
The risks Andreas Antonopoulos is talking about are gas price rises and “bug” events in the smart contract, which have led to a number of problems and could lead to a drop in your capital.