You've probably been wanting to know how to earn from crypto without trading.

So here's a #thread explaining all that including how to earn from crypto apart from trading through some Financial processes in Crypto.

An educative thread, #RETWEET for others to learn.

Firstly I'll need to start by explaining DeFi.

DeFi (Decentralized Finance) simply means the financial applications, systems, digital assets & projects built on networks founded on the Blockchain system.

Examples of networks founded on Blockchain are Ethereum, #BSC , Solana, etc

These networks have projects under them that in turn help with amplifying the DeFi system because they act as trustless financial protocols that don't require mediation, that is they're decentralized (simply means without intermediaries) as opposed to traditional banking or CeFi.

In a simple form, the DeFi system allows you to operate your money (crypto) on the internet as you would do with money physically through what we call "Decentralized Exchanges", that is exchanges that work without being controlled by any-one or under any authority.

They are automated systems built on Blockchain networks as opposed to the CeFi (Centralized Finance) system which means your funds are allocated to and handled by a central authority.

An example of physical CeFi is the Banks, they hold your money for you and create rules for it.

This also means they have the monopoly over how it works, they can decide to give it out to those who want loans.

This is a simple way to understand CeFi.

But CeFi in the crypto space works almost the same way too, CeFi works through what we call "Centralized Exchanges" (CEXes)

Centralized Exchanges are simply exchanges that hold your Cryptocurrency assets/funds for you and also your private key, the private keys to your wallet are never yours, it's with them.

And this means if anything happens to the exchange eg a hack, your funds can be affected

too because they are in charge of your funds.

And examples of Centralized Exchanges are; Binance, HotBit, Gate, KuCoin, Coinbase, Kraken etc.

Another thing to note about centralized exchanges is that they require KYC (Personal Details) for you to be verified.

But this whole issue of trust, security, monopoly and manipulation is what DeFi solves.

DeFi removes all sort of monopoly over your funds because you have your "Decentralized Exchange" wallet and you own your private keys and also total access to your funds.

But a disadvantage of this system is that if you lose access to your private keys or wallet mnemonic phrases/keywords, you can never recover your funds because there's no one to run to - remember decentralization?

That's why it's important to have them stored safely & securely.

Also like I said earlier, as centralized finance runs on centralized exchanges, decentralized finance also runs on "Decentralized Exchanges", and you can guess what decentralized exchanges mean by the definition of centralized exchange above.

But I'll define it for you simply, a decentralized exchange (DEX) is an exchange that operates based on automation and without any central authority deciding or having monopoly over it's operations.

That is financial operations take place without regulations and permissions(KYC)

and all you need to use them is just your decentralized wallet. Eg Trust Wallet, MetaMask.

These two are the most recognized and recommended wallet applications for conducting DeFi operations on decentralized exchanges.

And we also have types of decentralized exchanges

like Uniswap, Bakeryswap, Julswap, Pancakeswap, Polonidex, Spiritswap, etc.

These decentralized exchanges can also be called DApps (decentralized applications), these DApps don't work on normal browsers like Chrome and Safari, they only work on decentralized wallets mainly TW

& MM (Trust Wallet and MetaMask).

These wallets enable you access to the DeFi space and transact on DEXes.

And the automation of transactions on these decentralized exchanges are what we refer to as "Smart Contracts".

Simplyfing further, a Smart Contract is a programmed DeFi protocol that executes transactions on the Blockchain network without the need for any intermediaries.

That is a smart contract is executed or "called" when a precedent or criteria needed for a DEX transaction is met.

And that's why when you approve any transaction on a decentralized wallet like Trust Wallet, you'll see a notification saying "Smart Contract call executed" alongside with a transaction fee.

These smart contracts are executed when:

- Swaps are approved.
- Swaps are made.

- Stakes are made for rewards.
- Tokens are added to liquidity pools/ yield farms to earn automatic interests on capital which is what I'll be teaching in the second part of this thread.
Etc.

In the second part of this thread, I'll explain how you can conduct a transaction

on these DEXes and how you can earn from them automatically through Staking and Yield farming.

RECAP

CeFi means the centralization and governance of your funds by a Centralized authority eg. Banks (physical) Binance.
DeFi means the decentralization of your funds and having it's

full ownership and control to the extent that you can conduct free transactions with it eg Borrowing and Lending, staking, farming.. Etc.

In the second part of this thread which I'll complete later, I'll walk you through how you can successfully conduct a swap on a decentralized

exchange and stake or farm your tokens to earn rewards.

Follow me @ThePaulOla and turn on my post notifications so you receive the thread when I drop it.

Here's the beginning of the thread in case you want to retweet for others to learn too.

Don't forget to share what you learnt below... I appreciate your comments. https://twitter.com/ThePaulOla/status/1388600499302191104?s=19