Avalanche makes up almost 5% of all the liquidity and DeFi, and is teaming up with new projects such as yield farming, Dexes, NFTs and much more. Giving that token a massive utility.
And today we are gonna be exploring the Avalanche ecosystem and looking at different ways to create passive income. Ranging from a safe 8% per year to a more risky, almost 1% per day.
Now what makes Avalanche and the projects within its ecosystem unique. And every layer 1 protocol that claiming to take out Ethereum is claiming to do two things. The first is fixing the scalability issues and also processing transaction much quicker. And currently, Avalanche is boasting the ability to process over 4,500 transactions per second.
It already has thousands of nodes on its network. And it has one of the most agressive burn programs in all crypto. Meaning that all of the Avalanche tokens or Avax that are associated with transaction fees fees will permanently be removed from circulation. And we all know that by basic rules of economics, when supply goes down and demand goes up price also goes up. So as the AVAX coin increases in value, the actual projects within the ecosystem might increase in value and utility as well.
★ Staking AVAX
Now the first and most straight forward way of creating a passive income inside of the Avalanche Blockchain is just staking the Avax coin itself. We will be discussing the two different ways of doing that in this article.
a) First way is heading over to the Avax network website creating the wallet and then you can stake those tokens in your Avax wallet for an 9% APR on your stake Avax tokens. You will then have to choose a a validator and all validators do verify the transactions on the blockchain for a fee..and these validators range in fees from being free upwards of 99%
b) Another way you can stake your Avax which isn't as safe as actually staking Avax within the wallet. So heading over to Midas investment, where you can earn little over a 17% APY on your stake Avax. And they do this by actually compounding your investment and adding it back to your original principle. Even they almost double the interest of the first method which I have mentioned.
★ Beefy Finance
Next up we are going to head over to Beefy Finance. A multi chain yield optimizer. All the multi chain optimizer is, instead of just focusing on one chain, they focus on a handful of chains such as BNB, Fantom, Avalanche and many more.
If you are new to the protocol, they have pre- curated pools that are sometimes even higher than the actual projects themselves offering. And they do this according to the website through a set of secured and enforce investment strategies to help maximize rewards and liquidity pools.
And when you head over to the actual Avax tab of the website, you can see that they have hundreds of pool to choose from available that you can sort by safety score, APY liquidity and much more. And although they have hundreds of different pools to choose from, I am only going to be looking at two.
a) And the first pool we are going to be looking at is JOE which is the native token of the Trader Joe exchange. The largest exchange on the Avax network. And it's currently offering a 21% APY on the $JOE token. And the one reason why I choose this pool is because as the ecosystem grows the main exchange with ecosystem usually grows as well. Hence the actual token itself increasing in value.
b) The second one I am going to be looking at is the AVAXL/AVAX token pairing which is offering 0.0029% interest daily or a 183% APY.
Not only does this pool have over a nine on a safety score, but it also has over $1M in assets locked up. And if your are not familiar with the AVAXL token. It's a protocol on Top Shelf finance that's launching stablecoin on Binance, Fantom and Avax smart chain. It's worth noting too that if you have a higher risk tolerance there are some pool that have a much higher APY on Beefy Finance for AVAX.
★ Vector Finance
Up next we are moving over to Vector Finance. A yield optimizer that focuses on swapping stablecoin for lower fees. The main benefit with this is you can stake your stablecoins on this platform for a higher APY, and staking stablecoins is one of the lowest risk ways to earn to earn interest in crypto. However, the APY's on these are usually little lower than some of the other ways that I have mentioned.
And they have a variety of a stablecoins ranging from 4% upwards of a 15%, and they also have Terra Luna UST. And one huge update for Avalanche is that Terra Luna announced that they will be using Avax as a collateral for their main stablecoin UST. And it doesn't end here..They are also going to be launching some DeFi protocols inside of Avax ecosystem as well. And as optimistic as I am about the future of Terra Luna. I think this sounds amazing for that of Avax.
★Avalanche Hub
Avalanche Hub the home for Avalanche community. Avalanche Hub is basically build to reward community contribution and coordination. It is a equal opportunity for different kinds of people such as Developers, Marketers, Designer, Content Creators and many more.
To appreciate the support of community members, Avalanche Hub rewards them with points and reputation. Points is basically a currency of Avalanche Hub which is used against United States Dollars where 100points are equal to 1 United States Dollar. Whereas reputations helps the community members to hold the rank on the Avalanche Hub platform.
It is very important to understand the quality Verses quantity. To be honest for easy contribution such as likes, retweets and cheap memes may earn some points. But for the high contribution such as writing articles, making an article translation, infographics and educational videos the reward is absolutely delicious.
You can exchange the Avalanche points in Hub marketplace with Avax coin.
To get started register on Avalanche Hub
Final Thought
As I said above, if you are interested in passive income then look into anything that offers dividend yields, farms, liquidity Providers, staking tokens. These are much safer, and essentially guaranteed passive income after you do the leg work of research.