Top 5 DeFi protocols - How to earn money with the least risk.

By Bfab | Good vibes | 16 Feb 2022

While many DeFi protocols on multiple blockchains offer high yield farming rewards (APR / APY), they are not all worth it, for various reasons:

Some of these protocols might be on blockchains which are not secure enough (see my previous article on the most secure blockchains).
Some of these protocols are not secure enough by themselves since they might be exit scams or rug pulls, or might be hacked or exploited.
For the most secure blockchains and protocols, there is still the problem of the impermanent loss when you invest into pools of liquidity pairs.

Therefore, the first rule is to search for the most secure blockchains and protocols (e.g., by using rugdoc) and then only to search for the protocols which offer the highest farming rewards with the least impermanent loss.

There are usually two ways to minimize the impermanent loss:

To invest into pools of liquidity pairs which are not 50/50 but 80/20 or 95/5, for instance with Balancer, available on several blockchains.
To invest into single asset liquidity pools. As this option allows to avoid completely the impermanent loss, we will focus on that one.

What are the best single asset liquidity pools so far?

You may check on multi chain optmizers like Beefy Finance to find some single asset protocols. However, they will not show the five ones below:

PadSwap (on Moonbeam chain): you can stake GLMR directly on PadSwap. Staking rewards are above 200%. GLMR is the Moonbeam token.
Sandbox (on Polygon chain): you can stake SAND directly in the Sandbox dapp. Staking rewards are above 45%. SAND is bullish in the long term.
Synthetix (on Optimism chain): you can stake SNX directly into Synthetix dapp. Staking rewards are above 20%. Synthetix is secure & transparent.
GMX (on Arbitrum chain): you can stake GMX or GLP token on the GMX protocol. Both tokens offer attractive yields. The TVL can still grow there.
Aave / Geist (on multiple chains): you can use Aave (on Avalanche or Polygon) or Geist (on Fantom) to get reasonable rewards on single assets.

The list is not exhaustive, and the protocols above, although they have been audited, may present some risks. Please DYOR as usual.

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