How to earn money in a bear market - DeFi strategies

By Cryptofab | Cointune | 14 Jan 2022

You know how it is challenging to earn money when most of the cryptos are dumping. It is rather a lottery than anything else. I am sure you know that.

What are the strategies to earn money in a bear market?

You can leverage in long or short, but you know it is risky. A safer option is to lend your most valuable coins on a lending protocol, borrow stablecoins and make these stablecoins work in a farming protocol.

Defillama is a good way to see all these protocols. Choose well your blockchains, some are riskier than the other ones. One key parameter is the number of nodes of each blockchain. I will focus on a few blockchains below which seem more reliable to me than most of the other ones. Let's have a look.

Blockchains and DeFi protocols

Avalanche: one of my favorites. Definitely reliable, with more than 1000 nodes (just have a look at the number of nodes on the Binance Smart Chain to compare). Gas fees are reasonable, transaction speed is good. Furthermore, there are well known protocols on this blockchain. I recommend to use Aave. One strategy is to lend AVAX and ETH on Aave, borrow USDC, buy AVAX and ETH again, put them on lending.
Polygon: although it is not a layer-1 like Avalanche but only a layer-2 sidechain of Ethereum, it works pretty well, you can easily transfer your coins from the biggest exchanges to Polygon, and gas fees are low. Furthermore, you benefit from Ethereum mainnet security on top of which Polygon is built. A good strategy is to use Aave again to lend ETH (for instance) and borrow USDC or USDT, that you can then put on Curve - tricrypto pool...
Solana: so quick, but probably less secure than the two other ones below. Already a few outages... However, it is worth playing with smaller amounts on Solend for lending/borrowing and Francium for farming. My favorite tokens there are SOL, mSOL, RAY, ATLAS and POLIS. Please DYOR.
Tezos: this blockchain is still undervalued from my point of view. At least as good as Cardano, but with less marketing and smaller community. Therefore, the value of the XTZ will likely pump in the near future. Regarding the lending protocols, please have a look at Youves. Really cool.
Other protocols: Harmony One (ViperSwap), Fantom (Geist ), Elrond (Maiar Exchange), Near Protocol, Aurora & Moonbeam are good alternatives.

In summary, with a smart strategy, you can earn excellent rewards / APYs with only valuable coins such as ETH, AVAX, SOL and XTZ... Happy farming!

Below a few referral links to help you earn more cryptos...