How defi platform owners make money?
This blog is for people who already have knowledge in Defi concepts and have a clear understanding of defi protocols. Many entrepreneurs are finding ways to earn passive income through the defi system.
To help them, we explained the three main profitable methods in Defi which business people can get started with.
1. Lending or borrowing
Lending is the most common defi protocol used by many defi applications worldwide. It is the concept of lending your cryptocurrency or tokens as a collateral to get the loans for an obligation. This is similar to the concept of a banking financial system. But the main difference here is decentralization.
No one needs approval from central authority to avail crypto loans that you can trade or sell them in exchange of fiat. Millions of people use this defi system to acquire additional value for their digital asset by making use of liquidity.
The defi owners earn the commission for letting the user’s crypto diversified for lending. The lender earns the interest for depositing their cryptocurrency and borrowers have to pay the interest for the contract of time.
2. Staking platform development
Staking platform is the new age funding model. The users can stake their crypto assets for a fixed amount of time and agree with governance protocol to earn income.
The user's cryptocurrency is locked in the stalking platform with the technology of smart contract. No security theft seems to be there only due to the smart contract.
The staking platform owners can use the crypto fund deposited in terms of products fundraising, investing portfolios, or building a new crypto ecosystem on their own.
This is suitable for entrepreneurs who wish to start their dream project in the big picture while using this staking platform as the kickstart fund.
3. Decentralized exchange
Decentralized exchange is the medium for conducting peer to peer cryptocurrency transactions without central authority. When entrepreneurs build the dex exchange, they allow the defi coin owners to list their coins in the dex for a certain commission.
Other than that, dex owners get a small amount of commission for every transaction that’s happening across the exchange.
While seeing the return of investment(ROI) for Dex, this business model seems to be more profitable. Because, you make the technical infrastructure without making any commitments to the users on certain features. You act as the medium only.
How defi owners earn money
Defi owners can earn no matter what the business model they are building. In defi borrowing or lending, when the loan gets approved with the usage of smart contracts, there occurs a small transaction fee for borrowers. This goes directly to the dapp owners who manage them.
Similarly, the defi exchange or app also does the process like listing of new defi coins, deposition of cryptocurrency, staking of crypto, and liquidity mining schemes. Moreover, the job of defi exchange owners is not easy either.
It involves too many complex things to handle. When building a defi exchange, the most important thing is smart contracts. Because smart contracts only carry forward the defi ecosystem without central authority.
Defi exchange owners charge the token owners to list their tokens in the defi exchange.
Meanwhile, staking platforms give free hand to the owners the flexibility to operate the funds deposited for staking. For a given time, the owners can use the money for whatever the purpose and grow their wealth or invest.
Meanwhile, hearing about this business scope of the defi system, you may end up with a desire like opening a defi platform on your own. Sounds good to hear, but the defi development is not an ice cake for you.
It involves a lot of technical complexity, backend support, strong programming language skills and core blockchain consultants.
Make all of these hand-ready and jump into the development or drop us a line for any help. We would be ready to help you at any stage.