How to earn free MATIC with some juicy rewards
DeFi is a go-to place if you want to earn free rewards. A lot of projects like AAVE and CurveFi give out free MATIC tokens in addition to the base rewards, as an incentive for using their platform or the particular network (MATIC in this case).
Let me explain, how you can bag these free MATIC tokens using AAVE ( lending and borrowing platform), it’s not rocket science guys🙌.
Step 1. Go to https://app.aave.com/#/markets (we have attached a snip of the same for your reference)
Step 2. Connect your decentralized wallet (I personally use Metamask) & make sure you have set up the MATIC network.
If you don’t have a decentralized wallet, please comment below and we’ll get back to you on how to create a wallet, we got you covered!!
Whenever you are lending or borrowing in DeFi, it is always suggested to use stablecoins as these are the least volatile and hence have very less risk of getting liquidated (basically, you can’t go bankrupt✌ ).
Let us take an example and demystify everything, suppose you deposit USDC stablecoin into AAVE, it gives you an APY ( Annual Percentage Yield) of 2.70% (in USDC) + 1.03% (in MATIC) =3.73%.
Why would AAVE pay you for depositing? That’s because Polygon is offering $40 million in rewards to lenders and borrowers on AAVE’s Polygon market as AAVE is scaling on Polygon.
Now, the amount of USDC that you have deposited can be used as collateral to borrow almost the same amount of USDC as a loan & then this amount can be used to invest elsewhere and earn some juicy rewards. The best part here is that we are incentivized even to borrow USDC as a loan (i.e. 1.89%), but again it gets nullified to the interest that we owe(3.69%).
I know it is difficult to process everything at once, so let’s go through the process once again.
We deposit USDC, we get rewarded for depositing ( 2.70%+1.03%)
We take a loan, for which we get an incentive (1.89%)
But, we will have to pay interest for the loan (3.69%)
Now, let’s do the Math, after depositing USDC, borrowing USDC by using deposited USDC as collateral we get 2.70 + 1.03 + 1.89 - 3.69 = 2% roughly (yikes ✌). Well, that’s like free extra 2%.
Let’s now implement it
For example, let’s say I have Rs.10,000 and I invest it directly in any of Curve’s liquidity pools to get 20% (say) APR (returns), but now what if I had used lending and borrowing technique in AAVE to get extra 2%? The total returns on my investment would be 22%, isn’t that great?
I know it’s not something big, but do not miss out on opportunities that are offered for free, not that we lose anything right? The returns could have been more if we were lending and borrowing other stablecoins too, but this is great to start with.
So, do your own research before using the platform to make the most returns out of it.
Happy investing!!🙂
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I don't have a wallet, kindly help me set up!
I don’t hav a wallet, how to setup?? Can u explain me ??