My Roadmap to $10,000/month passively with DeFi — Starting with $800

An in-depth view on how I will be using Nodes, Daos, staking, and farming to create a accomplish it.

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After making 2–3x on a few of my crypto investments last year and seeing it all go away because I was Diamon-handed, I realized that there should be another way to make money in the Crypto space.

Most influencers and connoisseurs will tell you to buy and hold. Yeah, that’s a great strategy. But in the meantime, how do we make money? How do we keep increasing our bags when there is a cap on our income?

Digging and digging I stumble apart my first DeFi project. Anchor protocol, amazing project giving around 19% APY. Really cool, until I realized that I was going to make $16/month on my $1,000.

I continue digging and saw that there was more. Got into Wonderland, it was nice while it lasts. I was averaging $50–75/week until it crashed, my weekly income went from safe to sifu.

The first piece of advice to myself: DIVERSIFY.

Thought to myself, what if I could invest in 10 “Wonderland” or passive income projects, spread my risk and create a 10k passive income stream.

So I had this crazy idea of starting out with the only $800 I had. Bought some TIME, THOR, POLAR, and TITANO. As for today, I am averaging $80-$100 / week but the goal is to increase it to 2.5k / week.

Below I go in-depth on how I am planning to do it.

The plan — 10 plays to 10k

“Save, invest, take profits, rinse and repeat.”

In DeFi land there are tons of ways to make passive income. More than what I can mention here. The ones that I will be focusing on are:

NODES

There are several types of nodes but in a nutshell, they are a server in a decentralized network. Their main tasks include maintaining the consensus between other nodes, verifications of transactions, and also stores a copy of the blockchain.

Passive income using nodes:

Project to project differs on what they do and how you get rewarded. Let’s use as an example one of the most famous and one that I own, THOR.

THOR nodes offer what is called NAAS (Node as a service).

How it works:

1. You buy 1.25 Thor tokens (their native token).
2. You approve a contract using your web wallet (Meta Mask)
3. Name your node and create it.
4. They manage it for you, they take a cut and you receive yours.

Easy right?

Just to put things into perspective. You spend $187.5 on a 1.25 THOR token at a price of $150 per token. You receive daily 0.008 $THOR, which equals $1.2 daily or $8.4/weekly.

Important: After you create a node, you cannot take your tokens back. Once is created you can only count on the daily income you will be getting. But this might be a good thing, read below.

Pros and Cons:

• Pros:

1. If the price increases it takes you less time to recoup your initial investment. If Thor goes to $300 then you are $16/week instead of $8.
2. Because you can only get back a % of your initial investment, this might help with price stability and crashes.
3. Consistent passive income while the project is up.

• Cons:

1. The same is true if the price decreases. It will take you more time to break even and your weekly income will also drop.
2. These projects rely a lot on devs and the community, if they cannot outperform the project will die.
3. Rugs and scams are more present in DeFi, if you are not ready to spend several hours reading and researching then this might not be the place for you.

Dao and automated staking platforms

After the crash of wonderland, most of these projects are sinking, but maybe they will shine again. The idea behind Decentralized Autonomous Organizations is, you invest in their project buying their token, they use the money and invest it somewhat “intelligently” in other projects. It works like a big investment fund, but with weird names and in DeFi. Some of them even use the snapshot system where the community vote where they want the treasury money to be allocated.

As a reward, you get back payouts in their token. The issue here is that most of them are offering too much APY causing an inflationary spiral.

Also, unlike Node projects, you are able to take out all your tokens and sell them. With any bad news that can create a crazy wash out in price.

My plan here is to find the most reliable projects, invest a small capital and take weekly payouts so I can get my initial investment as fast as possible.

At the moment I am still in Wonderland with a small position and in TITANO.

Some of the most famous ones are:

1. Hector DAO
2. ROME
3. KLIMA

Staking

Staking is the process of supporting a blockchain network, most commonly used by the proof of stake (PoS) consensus mechanism. Participating in transaction validation by committing your crypto assets to that network.

Staking allows investors to generate rewards immediately during transaction validation.

This method offers no additional risk beyond owning the coin/token. However, the expected return and risk may be lower than with an active yield farming strategy.

With my weekly payouts the rule is to take 10–20% and invest it in stable projects like BTC, LUNA, AVAX, FTM stake the coins, and by that increase my bags.

Yield Farming

Farming involves lending crypto assets for interest to DeFi Decentralized Finance. Your funds get locked in the liquidity pool to provide liquidity to a DeFi protocol, where they’re used to facilitate trading, lending, and borrowing.

By providing liquidity, the platform earns fees that are paid out to investors according to their share of the liquidity pool. Yield farming is also known as liquidity mining.

Let’s take Traderjoe.xyz as an example:

You provide the same amount in UST and AVAX. $500 worth of UST, and $500 worth of AVAX. Your funds get locked, and you receive an annual percentage rate from the liquidity pool.

Most of them will pay you in their native token. For example for that one, you get paid in LUNA and in JOE.

The play here is to use what I already have and do not plan to sell to provide liquidity and earn a reward from it.

Conclusion

Invest in nodes and Dao’s to create a weekly passive income.

Take my weekly payout and invest some in safer projects and the rest in other passive income plays.

Use these safer projects to stake or provide liquidity through farming.

Rinse and repeat.

If you are into passive income plays like me, you know how hard it is to track these investments. I created this spreadsheet with DeFi in mind, so it is tailored around passive income. The goal of the tracker is to help you know if you are profitable or not.

Check it out: https://defichronicles.gumroad.com/l/xwwln

Thank you for reading!

If you want to follow my day-to-day journey, let’s be friends on twitter. 🐤

@DefiChronicles

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Disclaimer: This is not financial advice, I am just a guy with a laptop sharing his opinions and experience. This is for entertainment purposes only. Always Do your own research before investing.