Earn interest on your DAI with ethPM and the Compound Protocol
If you're like me, you have a hard time turning down free money. So why just let your crypto sit around and gather dust instead of putting it to work?
This guide will show you how to earn interest on your DAI with only a few lines of code in your terminal. You'll instantly start accumulating interest on your DAI by supplying it to the Compound protocol for others to borrow. We won't go deep into the Compound protocol, but you can learn more about it here.
Use the DAI & Compound ethPM packages
Approve the cDAI contract to transfer your DAI
Exchange your DAI for cDAI (aka supply your DAI to the Compound liquidity pool)
Before we can supply our DAI to the Compound protocol, we have to approve the cDAI contract to transfer our DAI tokens and convert them into cDAI. This is a standard procedure with many erc20-based systems. We'll use our cDAI contract instance for the address.
In the Compound v2 protocol, "minting" is analogous for supplying your DAI to the liquidity pool. Here we'll specify how many DAI we want to supply, and we start earning interest on the very next block after this tx is mined. Neato!
Verify your supply & interest accrued with the Compound dapp. You can also use these ethPM packages and your newly created contract instances to borrow DAI or any other supported feature of the cToken API. The compound package we use here also contains deployment information for all the other mainnet cTokens, so you can use the same package to lend/borrow REP, ETH, BAT, etc...