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The Complete Crypto Investors’ Guide to DeFi, Yield Farming and Passive Gains 

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Decentralized Finance, frequently shortened to DeFi, is a new type of electronic banking system that has been generating buzz within the crypto community and beyond. To date, the DeFi space accounts for more than 4 billion in crypto-assets and is shaping the future of digital finance.

What is DeFi and What Sets It Apart within the Blockchain World?

DeFi applications or dApps run on a smart contract blockchain and offer all the benefits of a peer-to-peer network. Democratizing the financial arena, dApps are accessible to everyone with an internet connection. Since they completely cut out the middlemen they are not only highly cost-effective for their users, but they can afford to service those who have been previously excluded by the banking world. There is no single body such as a government, financial institution, or corporate entity controlling or intervening in the movement of assets.

Also, through tokenization, those with only small sums to invest can get a piece of the pie, since the purchase of tradable tokens allows the coin holder to buy a portion of a larger investment that they couldn’t otherwise afford. They are fully automated systems that don’t require human intervention and are able to sidestep needless bureaucracy. DeFi apps are characterized by speed, efficiency, and the security of heavy encryption. They use smart contracts to execute transactions in the blink of an eye, triggering instantly, as soon as pre-set conditions are met.  Using open-source code, they are totally transparent, publishing transactions on the network, so you can identify the DeFi service with the best rates and confirm the state of their reserves.

However, the factor that sets DeFi apart from other blockchain initiatives is its incredible versatility. It is making critical contributions to the financial sector, changing the way we conduct business online. The broad array of activities enabled by DeFi include borrowing, lending, and taking out insurance as well as storing, exchanging, and trading digital assets, to name a few. 

How Can I Earn with DeFi and What Kind of Profits Can I Expect?

The dApps in the highest demand are those that interface directly with the user’s crypto wallet, to allow them to either borrow funds or earn interest by lending out their capital. These applications are being leveraged by yield farmers, crypto owners who harness DeFi technology protocols to provide liquidity in return for unparalleled profits. The yield farmer loans out their funds to a DeFi application, which will use the money to power their operation, possibly by trading or by loaning the funds to another client. This affords the dApp the ability to offer exceptionally high-interest rates. 

When compared with traditional investment channels, the advantages of DeFi are clear. A bank will pay an average of 0.1% interest per year; a bond, while low risk, will offer around 5-6%; stocks can make you around 10%, though with greater exposure, and real estate can deliver a return of approximately 10-12%. Yet, it involves a large initial investment, lengthy and complex bureaucracy, and a host of expensive middlemen.

Also, if your funds are already in digital currency and are simply sitting in a regular crypto wallet, then you are earning nothing while you wait for your coins to appreciate.  In contrast, your annual percentage yield from investing your crypto in DeFi applications can be far, far higher. Moreover, since dApps are fully automated, you earn a steady passive income, without having to waste a moment of your time tracking the markets and managing your portfolio.

What Are the Potential Dangers of DeFi?

The pros of using a DeFi application are undeniable but there are some serious drawbacks to be considered. No form of investing is completely secure but dApps, as blockchain-based protocols entail some unique dangers.

For example, a significant risk of DeFi applications is that many offer loans that come with exceptionally high collateral requirements and oppressive conditions attached, such as total liquidation, with the loss of all your capital if the price of the currency in which you provided your capital falls below a given threshold. In addition, the loss of your private key or password, even a typing error in taking down your crypto wallet address, can mean your funds are lost to you forever.

Then, of course, there is the murky regulatory status of DeFi applications. Since governments all over the world are still evolving their response to this emerging asset class, the future is uncertain and protections are minimal. 

Last, but far from least is the fact that, unlike traditional systems, smart contracts are particularly vulnerable to certain types of the hack. In the first few months of 2020 alone, DeFi applications were successfully attacked on at least five separate occasions, leading to substantial losses. 

ArbiSmart: Combining the Best of Decentralized and Centralized Finance

As we can see, while offering a number of advantages, DeFi is not a perfect investment solution. In transitioning to a digital banking reality, investors would do well not to dismiss Centralized Finance (CeFi) altogether and to keep those aspects of CeFi that serve to lower risk and heighten security. One company, ArbiSmart, is leading the charge with a hybrid approach that offers the best of both worlds. 

ArbiSmart maintains the most attractive aspects of DeFi, such as transparency, speed, efficiency, and incredible returns, while offering regulatory protection, enhanced security, and human oversight of CeFi. 

ArbiSmart is a regulated, fully automated crypto arbitrage platform that offers sky-high percentage yields at minimal risk.  An advanced AI-based algorithm scans over twenty crypto exchanges 24/7 to find and act on emerging arbitrage opportunities. The system finds instances where a cryptocurrency is temporarily being offered at different prices across multiple exchanges, at the same time. Before the discrepancy is resolved, the automated platform buys the coin, where it is being offered at the lowest price and then instantly sells it at the highest available price to generate a profit.  In contrast to its legitimate DeFi competitors, where the average return is approximately 10-12%, ArbiSmart returns start at 10.8% and reach as high as 45% a year. 

Even though the ArbiSmart system is totally automated, the company recognizes the value of the human touch, offering personal, dedicated support around the clock, via multiple channels, providing expert guidance and direct assistance in cases where the user loses access to their account, so that funds can always be retrieved. Furthermore, unlike regular DeFi applications, ArbiSmart has a human risk management team that is monitoring the markets 24/7, ready to intervene in exceptional cases of market upheaval, minimizing the risk of full automation. 

An additional factor that makes ArbiSmart a safer choice than its DeFi competitors is that the company is EU licensed. Regulatory requirements ensure that rigorous data security measures are implemented, strict KYC/AML protocols are being adhered to, external audits are performed, technological safeguards are put in place to shore up the company’s defenses against hackers and an insurance fund is created to cover all operational funds and protect users if a hack were ever to succeed. 

One more way in which ArbiSmart is out-performing even the most promising DeFi applications is with the company’s native token, RBIS. The way it works is that once deposited, your funds are converted into RBIS and used for crypto arbitrage trading. You can either reinvest your passive profits to earn compound interest, or withdraw them at any time in BTC, ETH, or EUR. The value of the token is rising all the time, enabling you to make generous capital gains on top of your profits from automated crypto arbitrage investing. In the first eighteen months since its introduction, the coin has risen more than 120% and it is projected to rise by 3,000% in the next year and a half if the company keeps growing globally and continues on its current trajectory. 

ArbiSmart is also offering another high yield opportunity to provide liquidity in return for sizable returns, with its EU licensed interest-bearing wallet. If you choose to place your funds in a locked account for a set period, you will receive a better rate, the longer the lock and if your funds are converted into RBIS, the return is even higher. So, instead of just letting your cryptocurrency sit idle, it can earn you 45% a year or even more. 

DeFi can offer exceptional profits alongside all the advantages of blockchain technology. However, security risks should not be taken lightly.  ArbiSmart, with its mix of CeFi and DeFi, is presenting the template as a way forward for investors. It provides the best of both traditional and digital financial systems, delivering a lucrative, fast, and transparent investment opportunity, on a platform secured by a combination of human oversight and powerful technological safeguards. To learn more about ArbiSmart, check out the company website, or make an investment directly.

Disclaimer: This is a paid post and should not be considered as news/advice.


Akshay focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.
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