Understanding yield-boosts in DeFi: Guide for beginners

DeFi is known for offering key advantages over TradFi. Enhanced transparency, security, accessibility, and inclusivity to name just a few. But what really draws most people to DeFi are the significantly higher yields.

Earning generous APYs through lending crypto, providing liquidity to trading pools, or staking tokens can be very attractive compared to conventional banking.

The sharpest investors, however, are always looking for ways to enhance their returns even further. And DeFi offers plenty of ways to do this.

Let’s explore one of the most effective strategies to maximise your earnings in DeFi: yield boosters.

What are yield boosters?

Yield boosters are tools or mechanisms within a DeFi protocol that enhance your returns. They work by increasing the efficiency of the assets you lend, stake, or provide as liquidity. Essentially, yield boosters help you earn more from the same activities, making them highly attractive for maximising gains in DeFi.

Common examples of yield boosters

Many DeFi projects use yield boosters to attract and retain users with enhanced returns. For example, a protocol might offer additional rewards tokens for staking their native tokens longer than a minimal period, effectively increasing the APY.

Another common example is liquidity mining, where users are rewarded with extra tokens for providing liquidity to trading pairs. These mechanisms improve user rewards and encourage long-term participation.

Minterest NFTs

Minterest NFTs play a key role within our platform. They are unique pieces of art that also offer real functionality. Our collection spans 12 tiers, featuring 3000 NFTs that pay homage to prominent figures in the blockchain world.

These NFTs serve dual purposes within the Minterest community:

Collectibles: Each NFT is a collectible art piece with its own unique value.
Yield-boosters: Beyond their aesthetic value, Minterest NFTs enhance yields.

NFT rarity and yield-boosting capability vary significantly. Depending on their tier, NFTs can boost emissions by up to 50%. Rarer NFTs offer fewer copies of each artwork, higher emission boosts, and longer validity periods, making them highly sought after in the community.

Examples of Minterest NFT yield boosts

Borrowing $mUSD

Consider a scenario where you borrow $mUSD on Minterest. Without NFT boost borrowing, $mUSD yields 27% in MINTY and MNT emissions.

Now, introduce a Tier-12 NFT with a 20% Yield Boost. Suddenly, your total yield jumps to (27% * 1.20) = >33% (after applying the boost)! The additional value is clear.

Borrowing $USDT

When borrowing $USDT, yields see a similar boost. Without the NFT, in this example, you earn 17% in MINTY and MNT. With an NFT Boost, this increases from 17% to (17% * 1.20) = >20%! The significant benefit of incorporating these digital assets speaks for itself.

How to use your Minterest NFTs

Using your NFTs on Minterest is easy. To activate the Yield Boost NFT, make sure it is bridged to the chain you are lending or borrowing on, for example, the Mantle Network. The NFT must be in the same wallet that you are lending and borrowing from. It will appear on your Minterest dashboard and the boost is automatically applied. Please refer to our guide on how to bridge Minterest NFTs to Mantle here.

Conclusion

Minterest offers excellent yields thanks to our unique model that returns 100% of fees to our users. Minterest NFTs let you enhance that yield even further.

Don’t have an NFT yet? Get them now on OpenSea and Mintle.

Stay tuned to Minterest for more upcoming features, new integrations, and community updates on Twitter, Discord, and Telegram.

02, May 2024