Automate activities on the platform without using stablecoins!

6 min readMar 21, 2024

Active users of the AirdropHunter platform know that purchasing cards and replenishing project liquidity can be done using USDT, USDC, or DAI on the Binance Smart Chain or Polygon networks.

However, in reality, to purchase a guaranteed card with a potential airdrop, it is not necessary to have only stablecoins in your wallet; you can use any other tokens.

In this article, we will discuss how to do it.

What are lending protocols?

Lending protocols (or DeFi lending protocols) allow users to borrow cryptocurrency loans in the DeFi sphere. In the traditional financial system, money is lent to borrowers by credit institutions. DeFi protocols enable peer-to-peer (P2P) lending between network participants. This eliminates the need for intermediaries. Anyone can become a lender and earn interest.

For borrowers, lending protocols allow relatively quick and accessible access to funds, while lenders can earn passive income. To secure loans in cryptocurrency lending, the practice of collateral or over-collateralization is sometimes used.

Advantages of lending protocols:

Speed — to obtain a DeFi loan, there is no need to undergo KYC, verify documents, and wait for confirmations — everything happens quickly.
Transparency — all terms and interest rates are publicly available and cannot be altered by the platform.
No intermediaries — there are no intermediaries; all DeFi platforms operate on smart contract systems.
Stability — users can verify their transactions and ensure that all lending conditions are met.
Cross-integration — users control all their borrowed or lent funds, while lending protocols support multiple blockchains, making them easier to use and even speculate on.

Let’s consider an example of how using lending protocols can be beneficial.

Suppose you recently entered the cryptocurrency space and bought some BTC to your wallet.

After getting acquainted with drop hunting, you are eager to start participating in promising projects. However, there is a setback — your wallet only contains ETH, but for activities in projects, you need to have stablecoins, such as USDT, USDC, or DAI.

As a novice, you might consider selling your BTC to acquire stablecoins and enter projects. However, there are more interesting ways:

For instance, you can turn to a lending protocol, deposit your BTC, and borrow, let’s say, 1% of the value of your BTC (let’s assume $70,000) in other tokens, such as USDT/USDC/DAI, to finally dive into a promising project.

Now you have $69,300 in BTC, which will accrue interest as collateral, and you have obtained your desired stablecoins, for which you pay a fee.

What’s next?

Next, you can use the borrowed stablecoins as you wish: use AirdropHunter to purchase a promising card, such as LayerZero or Scroll, and add liquidity to the card with the same stablecoins.
Then, wait for the completion of cycles with activities in the selected project, receive a drop in the form of project tokens into your account, which you can either sell or the platform will automatically do it for a small percentage.

A more detailed guide on purchasing cards on the platform is available here.

What’s the result?

In the end, you have received a drop in the form of project tokens (let’s assume you received a $ZRO drop on 5 accounts totaling $3,000 and successfully sold the tokens, once again obtaining stablecoins).

Now you have $3,000 + the remaining BTC, which, for example, has grown to $100,000 per 1 BTC -> totaling $98,960 in BTC + $3,000 USDT = $101,960.

Afterward, you can return the USDT back to the lending protocol, paying the accumulated fee, and end up in a big plus.

Let’s look at the main lending protocols.

AAVE

AAVE — One of the largest lending protocols by TVL (nearly $17 billion) and the number of protocols.

Its essence is simple:

The user comes and selects the tokens they will provide as collateral (the Ethereum network is indicated):

2. Then, they choose their assets under the Assets to Supply tab, sign the transaction, agreeing to the APY (Annual Percentage Yield, for ETH: 1.7%):

3. Next, they can select the assets they will borrow, choosing the BSC network and considering the fees in the form of APY to borrow assets:

Thus, you can use the obtained stablecoins to purchase accounts and add liquidity on the AirdropHunter platform.

MakerDAO

The MakerDAO platform allows users to collateralize tokens to mint DAI, a decentralized stablecoin pegged to the US dollar. MakerDAO’s smart contracts incorporate algorithms to reduce DAI volatility through lending. Platform users can borrow DAI from the protocol using the application. You can collateralize a position with any of over 20 tokens on the Ethereum network in exchange for “stability fees.”

Interest rates for DAI range from 0% to 8.75% and depend on the stability of fee payments by borrowers.

DAI holders can collateralize their stablecoins in the DAI Wallet and earn passive income at any time. There is no fee for accessing the DAI wallet, but users need to pay gas fees for depositing and withdrawing funds. Integration with Compound and Aave protocols is planned for the future, which will allow MakerDAO to offer higher APY (Annual Percentage Yield).

You can learn more about how the project works here.

Compound

Compound is a DeFi lending protocol based on the Ethereum network. Lenders’ funds are deposited into liquidity pools, which are used by borrowers to pay interest to the protocol. Compound then distributes interest among lenders according to their dynamic annual interest rate. Lenders receive income in the same token they provided to the protocol.

Currently, you can collateralize USDC + ETH in Base, Ethereum, Arbitrum, and Polygon networks with corresponding interest rates:

DeFiLlama

DeFiLlama is one of the largest DeFi aggregators, allows analyzing popular blockchains, airdrops, funds, and has its own lending service that selects the best APY for asset borrowing:

The service offers a wide range of tokens available for both lending and borrowing, thanks to timely aggregation of multiple lending protocols like AAVE, Compound, MakerDAO in one place.

When choosing tokens for borrowing, it’s better to look for those with Net APY closer to zero.

Conclusion

Lending protocols are one of the fastest-growing sectors of the cryptocurrency market.

With the right approach, DeFi lending allows benefiting every party involved: protocols, lenders, borrowers, and diversifying assets.

Thanks to lending protocols, you can acquire fresh cards with potential airdrops and add liquidity to them on the AirdropHunter platform, using borrowed assets while diversifying your assets wisely.

This can be Scroll, if you’re reading this article before March 30, 2024, LayerZero, Debank, and other potential gems on the platform!