DeFi: what is it and how you can make money on it (Part 4; final)
Flash loans — this is the first option for a collateral-free loan in DeFi. Designed for developers flash loans allow you to receive loans instantly without need to provide any collateral as long as liquidity is returned to the pool in a single transaction.
If this is not the case the entire transaction is canceled to cancel the actions performed before that moment. This ensures the safety of funds in the reserve pool.
How to make profit: This is essentially a leveraged arbitration which is only possible with smart contracts. It implies a loan for an unlimited amount which must be returned in the same transaction in which it was provided. In this case the one who lends earns a commission in any case and the one who takes a flash loan is at great risk and can get both profit and loss…
Front Running Trade
This type of earning is extremely complex and is only possible on decentralized exchanges with the help of special smart contracts, a set of deployed Ethereum-nodes around the world and a complex back-end.
How to make profit: To place your own specially calculated transaction ahead of large transactions that allow you to buy a certain asset at the current price just before a large purchase by another user (the object of attack), and sell it at a higher price immediately after this large purchase. All this happens within a single block of the broadcast network.
As you can see in the field of DeFi there is a huge number of options for earning but each of them requires a full understanding of all processes and solid experience in the field of crypto currencies and smart contracts. You are more likely to lose money than to make a profit if you are not a professional or use a professional tool.
One of the best examples of such tools is NiceCash which allows you to maximize the return on your investment in DeFi. All the user needs to do is put liquidity in one of the nCash “Vaults”. Each Vault is a smart contract that implements a certain strategy that automatically generates a profit.
NiceCash is currently offering a limited token sale.
You are one click away from earning.