Some retail-friendly DeFi options are yielding 12% to 13%

New DeFi products allowing traders to generate passive gains
  • DeFi platforms can help generate a yield of more than 12% to 13%
  • Where the crypto market slides, DeFi is offering strategies like weekly Ethereum and Bitcoin covered call to generate passive income
  • Platforms like Ribbon Finance and Stake DAO helps automate our trading strategies

DeFi or the decentralized finance sectors in the cryptosphere is one of the hottest industries. Experts in the cryptosphere believe that the industry can potentially transform our recent traditional banking system. Recently, we have observed that the cryptocurrency cash and carry trade has lost its shine. In such an option a trader simultaneously enters into a long position on BTC or ETH like crypto assets in the spot market. On the other hand, the traders then enter a short position in the futures market, making a way of betting on the eventual convergence of two prices. Although the strategy lost its shine, investors can still make double-digit returns.

DeFi offering weekly ETH and Bitcoin “covered call” strategy

Earlier this year, the frenzied bullishness witnessed in the digital currency world has faded. One of the major reasons for such impact came as major exchanges reined in leverage. However, the DeFi sector can still offer a chance to make double-digit gains through weekly Ethereum, or Bitcoin “covered call” strategies. Notably, these strategies are being offered by decentralized assets management platforms including Ribbon Finance. All a trader to do is to deposit their holdings in strategy vaults of the platforms that are designed to automate the trade.

The covered call strategy involves OTM calls option

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Cover Calls are among the list of popular trading strategies. We have observed that the strategy involves selling out-of-the-money (OTM) call options. It is noteworthy that the asset has remained neutral to bullish strategy, as the upside is capped. Moreover, a call option gives the holder the right but not the obligation to purchase the underlying asset at the predetermined price level. 

Stake DAO and Ribbon Finance helps automate

DeFi platforms like Stake DAO and Ribbon help to automate our trading. Users of these platforms only have to deposit their wrapped Ethereum (wETH) or wrapped Bitcoin (BTC) in strategy vaults. Rest the platform itself will take care of all the complexities included. Indeed, it’s just like selecting the appropriate strike price for selling the weekly option.

Such a structured method opens the door for the retail crowd to participate and earn yield from the complex options market. However, where there is a potential of making outsized income, there is always risk.

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Ahtesham Anis
Ahtesham Anis is a Computer Science undergrad student currently based out of India. Coming from the business background and his keen interest in Cryptocurrency and Blockchain technology is what Ahtesham brings to the table. He is always an eager learner when it comes to exploring the new technologies and topics in the crypto world.

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