Do you have some Solana(SOL) on an exchange or web3 wallet? Also, are you looking for an extra way to earn passive income over your Solana holdings?<\/p>\n
Look no further! In this article, I\u2019ll provide you with some practical tips on to let these dormant holdings work for\u00a0you!<\/p>\n
In short, the Solana blockchain is designed for decentralized finance(DeFi). The main reason why the Solana network can be used for DeFi is its low transaction costs, high performance, and scalability.<\/p>\n
When you want to send your crypto<\/strong> into the Solana DeFi system to make money<\/strong> you need to connect to a DEX. A DEX or decentralized exchange allows users to trade cryptocurrencies directly with each other using smart contracts.<\/p>\n This eliminates the need for intermediaries like traditional exchanges, providing greater security and control over\u00a0funds.<\/p>\n Experienced traders often prefer DEXs like Jupiter over centralized exchanges (CEXs) like Coinbase because they offer greater autonomy and flexibility. DEXs don\u2019t require users to share personal information(NO-KYC) or trust a third party with their funds, reducing the risk of hacks and security breaches.<\/p>\n As explained above, using DeFi on Solana is more than just trading your SOL tokens. Thanks to the ongoing developments in the cryptocurrency and blockchain space, it\u2019s also possible to use MetaMask or Phantom wallet to connect to platforms and start earning additional crypto\u00a0assets.<\/p>\n Below a list of methods you can use to start making money with DeFi on\u00a0Solana:<\/strong><\/p>\n Native Staking SOL(<\/strong>Lock your crypto and earn over\u00a0it)<\/strong>Liquid Staking SOL(<\/strong>Stake SOL and earn JitoSOL instantly)<\/strong>Providing Liquidity(<\/strong>Deposit SOL and earn fees over crypto\u00a0trades)<\/strong>DeFi Lending(<\/strong>Lend out cryptos from within your\u00a0wallet)<\/strong><\/p>\n Don\u2019t worry, later on in this article, I\u2019ll go into detail according to each method mentioned above. First, some basic explanation on how a crypto DEX works in the Solana crypto\u00a0space.<\/p>\n Finally, I\u2019m just an enthusiastic crypto guy. Meaning, all info shared in this article should be considered for <\/em>educational purposes only.<\/em><\/strong> To avoid losses and reduce risk, make sure to do some proper research before investing your\u00a0cryptos.<\/em><\/p>\n To understand how trading on a DEX works it is essential to learn the basic concept of Web3 trading. In particular, Web3 refers to the next generation of the internet that is decentralized, peer-to-peer, and built on blockchain technology. It aims to empower individuals by giving them full control over their digital identities, data, and\u00a0assets.<\/p>\n DeFi (Decentralized Finance) wallets like MetaMask or Phantom are an integral part of Web3. It enables users to securely store, manage, and interact with various decentralized financial applications and assets, such as cryptocurrencies, tokens, and lending platforms, without the need for intermediaries like traditional banks.<\/p>\n Swap for SOL on Jupiter\u00a0DEX<\/a><\/p>\n In other words, to start earning crypto on a Solana DEX exchange you need a crypto wallet first. Instead of trading on a centralized platform you are going to trade(or initiate transactions) from within your\u00a0wallet.<\/p>\n As explained above there are simple ways where you can use your Solana tokens and earn some passive income with them. In other words, you can let your Solana holdings work for\u00a0you!<\/p>\n Next I\u2019ll deep dive into the several methods that you can use when using DeFi on\u00a0Solana.<\/strong><\/p>\n Staking Solana (SOL) involves lending your coins to validators who help secure the network. In return, you earn rewards in SOL. It\u2019s like putting your money in a savings account that earns interest.<\/p>\n To start staking, you can use the Phantom wallet<\/strong>, a user-friendly and popular choice for beginners. Simply select a reputable validator, choose the amount of SOL you want to stake, and confirm the transaction. Your staked SOL helps validate transactions on the network, and you\u2019ll earn rewards over\u00a0time.<\/p>\n Native staking SOL with\u00a0Phantom<\/p>\n Phantom wallet is recommended for beginners due to its intuitive interface and ease of use, making it simple to navigate and stake your SOL with confidence. All in all, staking SOL with Phantom gives you about 6.63%\u00a0APY.<\/strong><\/p>\n Liquid staking Solana allows you to earn staking rewards while keeping your SOL tokens usable. Instead of locking your SOL in a staking account, you receive JitoSOL tokens<\/strong> that represent your staked SOL. These JitoSOL tokens can be used for trading, lending, or other DeFi activities, providing greater flexibility compared to traditional staking.<\/p>\n Key differences between liquid staking<\/strong> and native\u00a0staking:<\/strong><\/p>\n Liquidity: <\/strong>Native staking locks your SOL, making it inaccessible for other activities. Liquid staking allows you to use your staked SOL through JitoSOL\u00a0tokens.Flexibility: <\/strong>JitoSOL tokens can be used in various DeFi applications, offering more investment opportunities.Liquid staking SOL with\u00a0Phantom<\/p>\n Why beginners should use Phantom\u00a0Wallet:<\/strong><\/p>\n Phantom Wallet is a user-friendly interface that simplifies the process of interacting with Solana-based applications, including liquid staking platforms. Its intuitive design makes it easy to navigate and find reliable providers for liquid staking your SOL and receiving JitoSOL tokens. Liquid staking SOL with Phantom wallet could give you 9%\u00a0APY<\/strong>.<\/p>\n Providing liquidity on Solana DeFi platforms means that you contribute your cryptocurrencies to a liquidity pool<\/strong>. In fact, this is a smart contract that facilitates trading between those cryptocurrencies. By doing so, you become a liquidity provider\u00a0(LP)<\/strong>.<\/p>\n When you provide liquidity, you typically contribute an equal value of two different cryptocurrencies to the pool, creating a balanced\u00a0pair.<\/p>\n For example, you might contribute equal amounts of Solana (SOL) and a stablecoin like USDC. The pool now holds these assets and allows users to trade between them directly.<\/p>\n As a liquidity provider, you earn fees for the trading activity that occurs in the pool. Whenever someone trades or swaps between the two assets you provided liquidity for, a small fee is charged. This fee is proportionate to your share of the liquidity pool.<\/p>\n Liquidity pools on\u00a0Raydium<\/p>\n Overall, providing liquidity on Orca<\/a> or Raydium<\/a> allows you to earn fees from trading activity and potentially earn additional cryptocurrencies through yields, giving you a way to generate income from your crypto holdings.<\/p>\n DeFi lending allows individuals to lend and borrow cryptocurrencies without the need for intermediaries like banks. In this system, users can lend their cryptocurrencies to others and earn interest on their loans or borrow cryptocurrencies by providing collateral.<\/p>\n With a web3 wallet like Phantom<\/strong>, you can connect to different Solana Defi lending platforms<\/strong> like Solend<\/a> or MarginFi<\/a>. To earn interest, you\u2019ll need to deposit your Solana(SOL) into one of these lending platforms.<\/p>\n Assets for DeFi lending on\u00a0Solend<\/p>\n The interest you earn will depend on factors like the platform you choose, the cryptocurrency you deposit, and the length of time you\u00a0lend.<\/p>\n You can withdraw your cryptocurrency at any time, but you may have to pay a penalty for withdrawing before the lending period\u00a0ends.<\/p>\n Defi lending can be a way to earn passive income on your cryptocurrency, but it also carries risks like price volatility and smart contract vulnerabilities.<\/p>\n Related:<\/strong> Borrow USDC with SOL on Solend(GUIDE)<\/a><\/p>\n All options above requires you to setup a web3 wallet like Phantom. In short, Phantom is a next-generation crypto wallet designed specifically for the Solana blockchain. It\u2019s more than just a storage solution for your digital assets; it\u2019s a gateway to the exciting world of DeFi (decentralized finance) and NFTs (non-fungible tokens).<\/p>\n Visit https:\/\/phantom.app\/download<\/a> and select your browser type. Follow the steps in your respective extension store to add Phantom to your browser. After installing, you should see Phantom Startup in a new tab. Setting up a new wallet goes as\u00a0follows:<\/p>\n Create \u2018New Wallet<\/em>\u2018 and \u2018Create a password<\/em>\u2018Write down or store the seed\u00a0phraseFinish the setup and start Phantom from within the\u00a0browserInstallation of Phantom is\u00a0finished<\/p>\n Finally, if you are using Chrome, it will be on the top right-hand side of your browser. If you don\u2019t see it look for a \u201cpuzzle piece\u201d icon and click on it to access a list of installed extensions.<\/p>\n Funding your wallet with SOL tokens can be done in several\u00a0ways:<\/p>\n Withdraw from an Exchange:<\/strong> Buy SOL tokens on any major exchange like Binance<\/a>, Kucoin<\/a>, Bybit, and withdraw them directly to your Phantom wallet using the Solana\u00a0network.Use a Bridge:<\/strong> If you already hold cryptocurrency on another blockchain, you can use a bridging service like ChangeNOW<\/a> to convert your coins to\u00a0SOL.<\/p>\n In conclusion, DeFi on Solana offers a range of options for earning money with cryptocurrency. Whether you\u2019re lending out your coins, providing liquidity to AMMs, or want to play it safe with staking, using a web3 wallet makes it easy to participate in the world of decentralized finance.<\/p>\n However, it\u2019s important to remember that cryptocurrency can be volatile and risky, and you should always do your own research before investing.<\/p>\n With that said, I hope this article post has inspired you to explore the several ways you can earn passive income with DeFi on\u00a0Solana!<\/p>\n Related:<\/strong> 5 Places to Trade Solana Tokens(Best Solana\u00a0DEX)<\/a><\/p>\n Make Money With Solana DeFi(Beginners Guide)<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":" Do you have some Solana(SOL) on an exchange or web3 wallet? Also, are you looking for an extra way to earn passive income over your Solana holdings? Look no further! In this article, I\u2019ll provide you with some practical tips on to let these dormant holdings work for\u00a0you! DeFi on Solana Explained In short, the […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-34139","post","type-post","status-publish","format-standard","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/34139"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34139"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/34139\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34139"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34139"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34139"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}How To Earn Passive Income with Solana\u00a0DeFi<\/h3>\n
How Does A Solana DEX Exchange\u00a0Work?<\/h3>\n
Make Money With Solana\u00a0DeFi<\/h3>\n
1. Native Staking\u00a0Solana<\/h4>\n
2. Liquid Staking\u00a0Solana<\/h4>\n
3. Providing Liquidity<\/h4>\n
4. DeFi\u00a0Lending<\/h4>\n
How to Install and Deposit To Phantom\u00a0Wallet<\/h3>\n
Install Phantom Wallet(Solana)<\/h4>\n
Funding your\u00a0Wallet<\/h4>\n
Conclusion: Make Money with Solana\u00a0DeFi<\/h3>\n