Sirwin
Sirwin
Ethereum

How To Maximize ETH Rewards With Least Risks

By Cryptofab | Cointune | 27 Feb 2023


You earned Ethereum (ETH) by writing or reading on publish0x or decided to buy some, and you have been searching for the best way to maximize your rewards on ETH by investing into staking or DeFi (Decentralized Finance). As you may know, native staking on ETH requires to have at least 32 ETH, what is accessible to a small portion of ETH holders. Therefore, for most of you, the best way to optimize earnings will be through DeFi.

However, all DeFi protocols have vulnerabilites, and hence it is crucial to assess the risks of the protocols before using them. As it can be long to check all the protocols and audit reports (if any), there are websites assessing the risks of these protocols. Examples of such websites include defisafety.com and exponential.fi. These websites show the most secure protocols and the ones offering the best risk-reward ratio, like Curve, Aave and Uniswap.

However, once you have chosen your protocol to invest your ETH, it is crucial to choose one of the blockchains supported by this protocol. There are usually two options: layer-1 chains, like Ethereum (ETH), Avalanche (AVAX), Solana (SOL) or layer-2 chains, like Optimism (OP) or Arbitrum (no token yet).

The layer-2 chains are currently trendy, for various reasons: they supposedly inherit from Ethereum mainnet security, although it is not 100% true. You can check l2beat.com for further information on this topic. And, on top of that, in some cases you may expect to get airdrops if you use them a lot.

That's why the Total Value Locked has increased in the last few months on Optimism and Arbitrum, which are both optimistic rollups on Ethereum. Choosing between them is a personal question. I tend to prefer Arbitrum, since the goal of Optimism to be decentralized seems to be out of reach currently, and Arbitrum, although they rely only on a list of whitelisted validators, offers a mechanism to get rid of them if they do not play the game.

However, as usual, it is crucial to do your own research before investing your precious ETH into these chains and protocols to earn rewards. Keep safe.

Disclaimer: this article does not contain any financial advice. The information is provided for general informational and educational purposes only.

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Cryptofab
Cryptofab

Studying Bitcoin, Alts & Arts.


Cointune
Cointune

Crypto, DeFi and passive income.

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