In the volatile crypto market, many investors miss passive income opportunities. This article shares a simple, stable strategy—using DeFi platforms to lend stablecoins or lock fixed yields—helping you accumulate more crypto assets without frequent trading.
The Common Mistake: Overlooking Passive Income
Most crypto holders don't realize they can earn yield on idle assets. Here's how to fix that.
Basic Strategy: Lend Your Stablecoins
The simplest way to earn passive income is lending stablecoins (e.g., USDC) via DeFi platforms. Borrowers must over-collateralize, protecting lenders from defaults.
Example:
- Aave's average USDC APR: 6.28%
- $10,000 deposit earns $628/year vs. $0 on exchanges.
Drawback: Rates fluctuate.
Superior Strategy: Lock Fixed Yields with Pendle
Pendle solves volatility by letting you lock fixed APYs for set periods.
Case Study:
- Ethena's floating APR dropped from 27% to 9%.
- Using Pendle, I locked 20.5% APY for six months.
How Pendle Works
Pendle splits yield-bearing tokens into:
- Principal Tokens (PT): Grow steadily over time.
- Yield Tokens (YT): Offer variable interest but decay near expiry.
Mechanics:
- Swap USDC → sUSDe via CowSwap (best rates).
- Buy sUSDe PT tokens (expiry: May 29, 2025).
- At expiry, redeem PT for 20.5% APY.
👉 Maximize your crypto yields with Pendle
Step-by-Step Guide
Prerequisites
✅ Self-custody wallet (e.g., MetaMask).
✅ Tokens transferred from CEX to wallet.
Steps:
- Connect to Pendle: Link your wallet.
- Choose Fixed Yield: Select PT (e.g., 16.75% APY till March 2025).
- Approve Token Use: Authorize USDe for Pendle’s smart contracts.
- Execute Swap: Convert USDe → PT tokens.
- Monitor Position: Track accruing yields until expiry.
Pro Tip: Use Pendle’s dashboard to track P&L over time.
FAQs
Q1: Is Pendle safe?
A: Yes—it uses audited smart contracts and over-collateralization.
Q2: Can I exit early?
A: Yes, but partial yields apply. Full APY requires holding till expiry.
Q3: What’s the minimum deposit?
A: No minimum, but gas fees make small deposits inefficient.
👉 Start earning with Pendle today
Advanced Tip: Automate Fixed Yields
Simplify the process with tools like DeFi Koala, which streamlines multi-platform actions into one-click yield locking.
Key Takeaways:
- Lend stablecoins for basic yield (~6% APY).
- Use Pendle to lock higher, fixed rates (~16–20% APY).
- Reinvest at expiry or explore other DeFi opportunities.
By leveraging Pendle, you turn market volatility into predictable income—no trading required.