Earning a safe premium on your Ether

(Not by lending them out)

Lending Ether out has probably been an easy way to earn some interest on your holdings but there are also other ways you could easily earn a premium by still being long Eth.

Opyn is a DeFi protocol that lets you sell covered calls to earn a premium. I have used centralised and defi lending platforms on my eth but the APY is quite low compared to selling eth calls.

Here is an alternative strategy I have been employing that is quite fun and has been earning me 20%-40% APY.

Steps taken:

1. Go to https://opyn.co/#/sell and check out the Sell Protective Call Options on ETH section. Choose a strike price you are comfortable with parting your ETH with. I am ok if my Ether gets sold at $800 next month so i select that.
2. I supply my Eth as a collateral and in return I instantly receive some Eth back as a premium. I am of course aware that there is a risk that I will have to sell my Eth at $800 if it goes above that price before 25 Dec.
3. Because Opyn is a DeFi protocol I may be concerned about smart contract risks so I want to protect myself a little. This is where I buy insurance cover on Opyn from https://yinsure.finance/add
4. I take out 30 days cover on the Eth collateral I supplied to Opyn. The cover is currently priced at about 2.6% yearly cost. If I earn 20% from selling the call option I am left with 20–2.6 = 17.4%. I am using a small portion of the eth premium i just earnt for some piece of mind.
5. Sit back wait till 25th december for the call option to expire. If Eth is under $800 I claim my collateral back. If not then i might have to sell my eth at $800.