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DEC 13, 2023

BLOCKCHAIN WALLET: On-Chain Interaction

by Liquidity Dojo

This post exposes users in crypto space to the perks of interacting with blockchain wallets, with some alphas not to miss in this airdrop season.
The crypto space has been abuzz with excitement lately, thanks to a flurry of airdrops like Jito, Pyth, JUP, and Blaze. But how did lucky users snag these coveted tokens? The secret lies in their participation in onchain interactions, a cornerstone of the decentralized finance (DeFi) revolution. Fear not, crypto newbies, for this guide will unravel the mysteries of blockchain, its workings, and the alpha on upcoming airdrops.
Let's Break It Down:
First things first, let's clear the air. Imagine a blockchain wallet as your digital safe deposit box, where you securely store your crypto assets. But thanks to DeFi's rise, these wallets have evolved beyond mere storage solutions. They've transformed into gateways to a vast ecosystem of financial applications and interactions, empowering users to perform activities like swapping tokens, staking, yield farming, and contributing to liquidity pools.
Onchain Interactions: What's the Hype All About?
Think of onchain interactions as activities happening directly on specific blockchain networks, utilizing their native tokens and functionalities. Confused? Don't worry, we've got you covered!
1. Swapping: Imagine a football coach making player substitutions during a live match. That's essentially what swapping is! You, as a user, simply exchange one token for another within the same blockchain network. Popular DEXs like Uniswap for Ethereum, PancakeSwap for Binance Smart Chain (BSC), and Jupiter for Solana enable seamless swaps, requiring only a connected wallet and the necessary native tokens ($ETH, $BNB, or $SOL).
2. Staking: Picture yourself depositing and locking up your crypto assets in a safe, secure vault. That's staking in a nutshell. You essentially support the network's operation by locking your assets into a smart contract. There are two types: traditional staking, where you lock your assets for a specific period, and liquid staking, where you can use your locked assets for other DeFi activities.
3. Yield Farming: Looking to earn passive income? Yield farming is your answer. By depositing your crypto assets into liquidity pools, you earn interest in the form of Annual Percentage Rates (APRs). Platforms like Kamino (Solana), Timeswap (StaFiChain), Compound, Aave, and Marginfi offer diverse DeFi protocols for optimized yield generation.
4. Liquidity Pooling: Ever wondered how DEXs maintain smooth trading? The answer lies in liquidity pools. As a user, you contribute tokens to these pools, becoming a liquidity provider. In return, you earn fees proportional to your contribution, incentivizing participation and maintaining market liquidity.
5. Participating in DAOs: Think of DAOs as collaborative decision-making groups powered by blockchain technology. By holding governance tokens, you can vote on proposals directly from your wallet, influencing the DAO's direction.
Onchain interactions unlock a world of possibilities beyond simply holding tokens. They empower you to earn passively, contribute to a decentralized future, and experience enhanced security. So, what are you waiting for? Grab your crypto/blockchain wallet and start exploring the exciting world of onchain interactions!
I'll leave some bonus tips on some wallets that reward users for their participation:
  • Phantom Wallet
  • Solflare Wallet
  • Injective Wallet
  • Viction Wallet
  • Rainbow Wallet
Stay tuned for our next post, where we'll delve into the intricacies of navigating these powerful wallets!
P.S. Don't forget to check out these insightful videos for a deeper understanding:
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