The crypto ecosystem is diverse and incredibly deep. A typical investor will lose their way in the maze of DEXes, bridges, lending protocols, and other unique tools that exist exclusively in the world of DeFi. Identifying good investment opportunities is a tough task even for people with years of experience under their belts. Newcomers are struggling even with some basic stuff.
One of the issues that many beginners face is the difficulty of the onboarding process as learning curves are steep and require time and effort to be climbed. When it comes to decentralized finance and its many platforms, it is also incredibly important to start with projects that are intuitive, trustworthy, and have millions of monthly active users. After mastering these, you can start venturing into the wilderness of the DeFi ecosystem.
We will talk about some of the best protocols offering rewards in native, layer 2, and governance tokens. Liquidity providers can earn a lot of money by smartly moving their assets across the whole sector and managing investments in a way that helps them avoid excess risks and technological dangers. Let’s start by explaining the concept of this investment method!
The idea of receiving rewards in very specific digital assets instead of relying solely on base APYs for returns is relatively novel. Many tradfi investors may find it somewhat counterintuitive as they often come from trading stocks or bonds which are asset classes easily approached from the perspective of fundamental analysis. They do not see the power of speculation and utility in the financial sector.
Decentralized exchanges are excellent examples of why this particular method works for Dapps and their users. DEXes are in desperate need of liquidity to remain operational. The more they have, the higher the volume of operations they can support. It means that securing the largest possible share of available liquidity is the main goal of any DEX.
The competition for liquidity providers is fierce leading to always-growing APYs which are often insufficient to make the idea of investing in liquidity pools attractive to many investors. To deal with this issue, many DEXes also offer rewards in their native tokens that can carry utility or grant holders voting rights.
Let’s take Aerodrome Finance on Base as an example:
These tokens are useful in many ways and act as excellent incentives for investors to keep their assets in Aerodrome’s pools. In fact, this DEX does not pay base APYs and only relies on rewards to keep providers happy. So far, this strategy has been paying off greatly!
One of the reasons why it is possible for DEXes and other protocols to offer high interest rates and pay in native tokens on top is the use of smart contracts, which are autonomous mini-apps that are used to automate all transactions. By interacting with them, users are engaging in trustless and permissionless processes that do not need additional human supervision.
Automation provides many benefits:
Additionally, gas fees are much cheaper per transaction since almost all DEXes use roll-ups and other layer technologies to significantly cut down operational costs. These advantages make it possible for decentralized exchanges to offer higher interest rates and provide utility, such as discounts, together with their natively issued tokens. If the development team secures funding from venture capitalists, it can also focus on promotional events and make early investors richer by offering even higher yields and larger token rewards.
Making the right choice in an ecosystem with over 3,000 tracked protocols offering over 11,000 pools can be incredibly challenging regardless of your experience. However, we all need to start somewhere. We will cover some of the most popular and interesting decentralized protocols offering different types of pools with rewards. Note that we do not endorse any of the projects listed below and encourage our readers to do their due diligence!
Some of the most reliable and, consequently, popular projects are the ones focused on lending. Asset providers enjoy their safe investments as all loans must be collateralized by at least 110% in principal currency. For instance, taking out an ETH (at $3,200) loan on Aave at an 80% LTV using USDC as collateral means that you can borrow only 2.5 ETH for $10,000.
Lending platforms with high utilization rates are always looking for additional liquidity and often offer excellent rewards on top of relatively low APYs.
Here are some of the projects you should check out:
DEXes are the bread and butter of the DeFi ecosystem. These protocols facilitate cashflows and make sure that users can easily move their assets around without facing any challenges. In many cases, these platforms also enable cross-chain DeFi investments. For instance, Uniswap works across 26 different chains. Users can easily switch between different investment options and even move their assets across different networks.
Some of the best places to park capital are popular decentralized exchanges. Below are some of the reliable protocols offering rewards:
| Exchange | Raydium | PancakeSwap | Aerodrome |
| Mainnet | Solana | Binance Smart Chain | Base |
| Supported chains | Solana | Ethereum, BSC, Aptos, opBNB, Arbitrum, zkSync Era, Base, Linea, Polygon zkEVM | Base |
| TVL | $1.966 billion | $1.823 billion | $1.443 billion |
| Number of pools | over 100 | 317 | 274 |
| Average APY | – | 36.67% | 44.17% |
| The best rewards pool | SOL-ACT | WOO-WETH (0.25%) | ION-WETH |
| Token and APY | RAY (381%) | CAKE (193%) | AERO (217%) |
| Token price | $4.66 | $1.79 | $1.19 |
| Token mcap | $1.388 billion | $507 million | $831 million |
| Token trading volume | $129 million | $116 million | $73 million |
Many DEXes offer incredibly generous APYs and pay out their rewards with an impressive level of consistency. If you are interested in building a portfolio focused specifically on generating yield rewards, it is a good idea to allocate a big chunk of your capital to pools operated by decentralized exchanges like PancakeSwap or Aerodrome.
Many investors do not have the necessary expertise, time, or focus to manage their assets efficiently. The DeFi sector is a place with many opportunities that must be grabbed as soon as they become available. It means that you must monitor the market all the time and quickly react to any significant changes in the DeFi ecosystem. Doing it manually can be a chore. Thankfully, there is a solution.
Protocols focused on aggregating yields are working with multiple pools from different protocols to find the best way to allocate certain assets. They move them automatically when there is a better reward or higher APY to be claimed. With much lower fees, these aggregators can be incredibly efficient at increasing potential gains. However, investors must be aware of the impermanent loss risk which is one of the biggest issues when it comes to automating asset management in the world of DeFi.
Here are some of the best aggregators to choose in 2025:
Some investors may also try hand-picked automated strategies offered on DeFi marketplaces such as Rivo.xyz. It is important to focus on diversifying your investments and building a portfolio using efficient tools developed by professionals. Pick only the best protocols and spend as much time researching them as possible.
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