2019 is near its end and it’s safe to say that the rise of decentralised finance is one of the most interesting things that happened in the Ethereum ecosystem:
- DAI debt surpassed 100M yesterday with 30% of it locked in DeFi
- Multi-Collateral Dai (MCD) is expected to launch on November 18
- Since the release of Compound v2, more than $100M was locked in several tokens and interest rates are ranging around 5%.
Probably the best thing about DeFi is that it allows people to innovate on classical financial products and processes freely and even now when everyone’s talking about it, it has still a lot of unexplored potential. This article is a good example.
As we use DAI stable coin as payment method on the AdEx platform, we decided to brainstorm a little how you can benefit from that and even innovate on top. So here we present 3 easy ways that you can make you DAI earn for you.
For publishers: Lock your earnings in a lending protocol or in Multi-Collateral DAI (soon)
This is probably the easiest thing you can do with the DAI earned on the AdEx platform if you are a publisher. You can pick a protocol (Compound being the most famous one) and lend your DAI to benefit from interest rates ranging around 4 to 5%. Good thing about this is there’s no “lock-in” period or time you have to wait before earning interest. Your DAI is earning interest every block until you choose to withdraw.
Of course with the rising popularity of DeFi, interest rates are dropping and at the moment of writing this article, supply is 4x bigger than demand on Compound.
Soon, another option for DAI holders will be to lock their funds into Maker’s Multi-collateral DAI (MCD) and earn DAI while helping maintain DAI’s peg to the US Dollar.
For advertisers: Take a loan and run ads while saving most of your ETH for the future
- Disclaimer: This one is not a financial advice and is just a concept that relies on the speculative nature of Ethereum
Hold tight, this one is interesting! Let’s say that you have some ETH you’re keeping for the long run and you believe the ETH price will mostly go up in the future. Oh, and you want to run ads for your awesome product on our awesome decentralised ad network.
As you know, DAI is basically a loan. Instead of simply buying DAI, you might want to open a CDP (Collaterized Debt Position) with some of your ethers and borrow DAI to run your ads (For more information check this article or see the image below for tips). To make this concept more accessible, we’ll oversimplify it with some numbers.
- You have 2 ETH
- At a hypothetical price of 1 ETH = $150 you lock-up 1ETH in a CDP and take out 100 DAI.
- You run ads for 100 DAI and you’re super happy with your 238% ROI.
- ETH price goes up 400% and now 1 ETH = $600.
- You buy 100 DAI for 0,16 ETH at an exchange.
- You close your CDP with the 100 DAI you both, unlocking your 1 ETH.
- If you directly bought 100DAI for 0,66 ETH in the past, you would now have 1,33 ETH, but thanks to the CDP you now have 1,84 ETH.
You ran ads for $100 without having to sacrifice ETH and now you can enjoy higher profit. This concept actually solves one of the biggest problems with adoption and crypto — how to convince people to spend their crypto instead of just HODL-ing.
Of course, this scenario works well if ETH goes up and might end up bad if it goes bellow your collateral ratio.
For the future creators of awesome applications: Fund your project on an IMO (Initial Monetization Offering)
Hold tighter, it gets even more interesting. This concept is super hypothetical and it is more of a meditation what the future of crowdfunding and DeFi might be than something you should do now.
Let’s suppose that you have a great idea for a product that has a potential for mass adoption. It is not necessary to be something Web3 or crypto related, it might simply be the next TikTok (looking at you, Pepo).
To monetize your future user base you will integrate AdEx ads, but before you start earning, you first have to raise capital to build it. Here comes the concept that we’ll call for fun “Initial Monetization Offering” : Trading your future earnings to raise capital and build your product. Here’s how it goes:
You start a decentralised autonomous organisation (DAO) that issues a “Monetization token” under strict conditions:
- The token is sold on an initial offering on a given price.
- Holders of the token receive respective earnings (or dividends…sort of) in DAI from your future revenue on AdEx Network.
- Holders of the token receive earnings until they have received the corresponding value of the tokens they are holding + negotiated bonus (to incentivise the purchase of the token on the initial offering).For example, a 1 DAI worth of token would give you the right to 2 DAI of revenues.
- When the holders receive the expected earnings + bonus, their tokens are burned or returned to the DAO for future offerings.
- Because the revenue you redeem with the token has a upper limit, the token has an intrinsic maximum value, which will eliminate speculative trading on secondary markets (exchanges), therefore also eliminating regulatory issues
Yes, this concept is still far from reality, but it is a good illustration how you can create new concepts and decentralised finance products with AdEx. We’d like to thank our advisor Ameen Soleimani for sharing this idea with us back at the last ETHBerlin.
Do you want to try AdEx?
AdEx is trust-minimized solution for digital advertising that reduces ad fraud, improves ad budgets and protects user privacy.
The AdEx platform is built on the Ethereum blockchain to connect publishers and advertisers without intermediaries on a decentralized ad exchange. We introduce real-time reporting for both parties and enable payments per impression with no withdrawal threshold for publishers.
If you want to try AdEx, send an email to firstname.lastname@example.org.
Interested in AdEx? Follow us: