How to earn yield on Bitcoin? Earn upto 22% APY

“Have I ever told you about the time I went backpacking through Western Europe? Or about the time I generated yield on my BTC?”

These are two conversation starters that will never fail to grab the other person’s interest. And since the second topic definitely grabbed your attention, let me tell you all about it.

Source: Reddit.

Key Takeaways

• Yield farming is a tool used to generate yield on your assets.

• There are 3 prominent types of yield programs: Liquidity Providing, Staking (Proof-of-Stake) and Lending.

• Bitcoin, the largest cryptocurrency, doesn’t have a yield program that can offer high yields.

• Multipli employs a delta-neutral, high-yield strategy to generate 10% APY on your Bitcoin asset.

What is yield farming? What are the types of yield programs out there?

Yield farming involves placing your crypto assets in smart contracts to generate yield for you. Your assets are locked in smart contracts that enable activities like lending, staking, etc. and the fees and profits collected from these activities are distributed as yield.

💡 This is similar to putting your money into a TradFi investment plan that’ll generate interest for you over time, like Fixed Deposits.

The types of yield programs are as follows:

• Liquidity Providing: Your assets are locked in liquidity pools that assist DEXs in maintaining liquidity.

• Lending: DeFi lending platforms connect lenders and borrowers directly, and generate your yield from the interests paid.

• Staking: Staking is a mechanism where your assets are locked up in the network to help secure it and verify transactions.

Note that these aren’t the only yield generating options in crypto. But these are some of the most prominent ones.

Why isn’t a Bitcoin Yield Program possible?

Each of the yield program mentioned above relies on technologies such as smart contracts, the PoS mechanism, decentralisation, etc. However, BTC works on the PoW mechanism and doesn’t support smart contracts, which is why there aren’t any protocols that offer high yield on it yet.

But then, how are we promising high yield on your Bitcoin? Let’s talk about Multipli!

The Solution: What is Multipli?

Multipli is a zero-knowledge powered multi-chain DeFi protocol that enables users to earn yield on your crypto assets. It aims to restructure the cryptosphere with its yield solutions, especially with its BTC yield program.

How will Multipli earn yield on my Bitcoin?

We aren’t going to complicate things here - the answer lies in two simple strategies, which we will get to in a jiffy!

When you deposit your funds on Multipli, tthey will be locked in a smart contract, and with the help of custodians, your funds will be mirrored on centralised exchanges (ensuring we get the best of both worlds - the security of DeFi and the liquidity of CeFi) where we’ll apply our super efficient Yield Generating Arbitrage Strategies on your assets to generate yield.

💡 Our main goals are to

→ Minimise Risk & → Maximise Yield

1. The first strategy in our Yield Generating Arbitrage Strategies is:

Contango Arbitrage: This strategy aims to capture the price difference between an asset’s spot price and futures price by shorting in futures and going long in the spot market simultaneously.

💡 Contango refers to the difference in the price between an asset’s spot price and futures price.

Example: Let’s say you spot a contango in the Bitcoin market where the futures price is $5,000 higher than the spot price.

• Buy Bitcoin on the spot market: You buy 1 Bitcoin for $20,000.

• Sell a futures contract: You sell a Bitcoin futures contract for $25,000.

• Wait for expiry: You hold both positions till the futures contract nears its expiry date.

• Settle contract: As the futures contract expires, the futures price converges with the spot price at, let’s say $20,000. The price difference of $5,000 is your profit.

💡 Multipli’s BTC yield of 10% APY is one of the best in the DeFi yield landscape.

2. The second strategy is:

Spot - Perpetual Funding Rate Arbitrage: This strategy aims to profit from the funding rate generated by holding long and short positions in perpetual futures while maintaining neutral positions in the spot market.

💡 Funding rate is a payment mechanism between long and short position holders of perpetual futures assets to influence its price to stay in sync with the spot market’s price.

Essentially, if

or

Example:

• Spot market purchase: You buy 1 BTC for $20,000 in the spot market.

• Perpetual Futures purchase: You short-sell 1 BTC for $20,000 in perpetual futures.

• Funding Rate: The funding rate is 0.01% per 8 hours. As a short position owner, you receive the funding rate payment.

• Over a day, you will make:

  

• Over a month, you will make:

  

You’ve made 0.009 BTC by employing this strategy while ensuring that the risks are minimal due to your neutral position.

To dive deeper into these innovative strategies, go through our Docs.

How much yield will Multipli generate on my Bitcoin?

Multipli is able to generate a yield of 10% APY on your Bitcoin holdings. How is this possible?

Because our strategies are a result of extensive in-depth research and have been successfully back-tested with market data from the last 5 years.

Conclusion

Bitcoin is the largest cryptocurrency with a gigantic $1.3T market cap, and we seek to capitalise on this potential.

This is what Multipli aims to change!

A yield protocol like no other, here to alter the crypto landscape forever. Learn more about Bitcoin’s potential and our yield generating strategies to understand how exactly we will be doing this. To witness your BTC grow, start staking now.