Top 5 Bitcoin DeFi Apps That Enable You to Earn Yield

Top 5 DeFi Apps for Bitcoin Holders to Earn Passive Income

Bitcoin’s expansion into decentralized finance (DeFi) has transformed how bitcoin holders can use their assets, offering options beyond traditional HODLing. 

With the growth of Bitcoin DeFi, Bitcoin users now have access to protocols designed specifically for earning yield through lending, staking, and liquidity pooling—all while retaining full control over their coins. 

Read to discover five leading apps BTC holders can use to earn bitcoin yield. 

Sovryn

Sovryn is a decentralized finance protocol on Rootstock (RSK) and Build on Bitcoin (BoB) that allows users to engage in crypto lending, borrowing, and trading without the need for intermediaries. 

As a non-custodial protocol, Sovryn ensures that users retain complete control of their assets, a significant advantage for security-conscious bitcoin holders.                                        

Sovryn users can earn yield on bitcoin holdings, as well as stake the protocol’s native token, SOV, to receive staking rewards. The dApps seamless trading experience also allows users to trade crypto spot and margin. 

Additionally, Sovryn’s governance is decentralized, and SOV holders can participate in protocol decisions, adding a community-driven aspect to the platform.

Pros

• A comprehensive suite of DeFi tools

• Multiple earning options through lending and staking

• Cross-chain accessibility

Cons

• Higher complexity for new users                                                            

ALEX  

Built on the Stacks blockchain, ALEX brings a range of DeFi functions to bitcoin holders. The platform includes yield farming, liquidity provisioning, and staking, allowing users to earn passive income through a decentralized interface.

ALEX provides yield-generating opportunities by allowing users to participate in staking pools, liquidity provisioning, and yield farming. By staking ALEX tokens or engaging in liquidity pools, users can earn competitive returns.                                                                                                                                                                              The platform offers a project launchpad for emerging Bitcoin-based projects, creating an integrated ecosystem where users can earn and grow alongside Bitcoin’s DeFi landscape. The cross-chain compatibility further widens its utility, making it accessible across different blockchain ecosystems.

Pros

• A comprehensive suite of DeFi tools

• Staking, yield farming, and liquidity pools

• Project launchpad

Cons

• Newer platform with evolving features

Arkadiko Protocol

Arkadiko allows users to mint USDA, a stablecoin backed by bitcoin or STX, on the Stacks blockchain. This stablecoin option enables bitcoin holders to access liquidity without selling their assets, unlocking yield opportunities within the Bitcoin ecosystem.

By depositing bitcoin or STX as collateral, users can mint USDA and participate in liquidity pools, generating yield from their stablecoin holdings. Arkadiko also offers self-repaying loan mechanisms where collateral is used to pay down loans over time.

The protocol’s automated collateral management and self-repaying loan features give users an added level of flexibility, allowing them to access funds while their collateral continues generating yield. This makes Arkadiko a flexible tool for leveraging bitcoin’s value in DeFi.

Pros

• Stablecoin minting backed by bitcoin

• Yield generation through collateralized liquidity

• Automated loan repayment with yield-backed assets

Cons

• Limited to the Stacks ecosystem

Velar

Velar is a decentralized liquidity protocol on Stacks, enabling token swaps, liquidity pools, and staking options for users interested in Bitcoin DeFi. 

By providing liquidity or staking the VELAR token, users can earn yield through Velar’s DeFi features. The platform’s staking and liquidity farming options allow for continuous yield generation on Bitcoin-based assets.

The protocol’s flexible earning options, including liquidity farming and staking, make it a versatile choice for users looking to diversify their yield strategies. Velar’s focus on Bitcoin-backed assets underscores its commitment to supporting Bitcoin’s integration into DeFi.

Pros

• Comprehensive DeFi tools for Bitcoin

• Flexible yield options via staking and liquidity

Cons

• Beta status may involve ongoing updates

Zest Protocol

Zest Protocol offers decentralized lending pools on the Stacks blockchain for bitcoin holders. By participating in Zest’s lending pools, users can earn passive income while supporting a decentralized lending market.

Bitcoin holders earn yield by lending BTC in Zest’s decentralized earn pools. The protocol’s design offers a trustless environment where both lenders and borrowers can interact without the need for intermediaries.

The non-custodial design ensures users’ funds remain under their control while generating returns, emphasizing Zest’s commitment to security and decentralization. 

Pros

• Decentralized, transparent bitcoin lending

• Non-custodial with easy access to lending pools

Cons

• Limited to lending services (no trading or staking)

The Bottom Line

Bitcoin’s DeFi space is evolving rapidly, with platforms like Sovryn, ALEX, Arkadiko, Velar, and Zest Protocol leading the charge. Each protocol offers unique yield-generation opportunities, allowing Bitcoin holders to earn passive income through lending, staking, or liquidity farming. 

As Bitcoin DeFi matures, these platforms exemplify how users can securely grow their Bitcoin holdings without needing to convert or sell.