  In this review, we evaluate the mechanisms behind the decentralized finance
protocols for generating stable, passive income. Currently, such savings
interest rates can be as high as 20% annually, payable in traditional currency
values such as US dollars. Therefore, one can benefit from the growth of the
cryptocurrency markets, with minimal exposure to their volatility risks. We aim
to explain the rationale behind these savings products in simple terms. The key
to this puzzle is that asset deposits in cryptocurrency ecosystems are of
intrinsic economic value, as they facilitate network consensus mechanisms and
automated marketplaces (e.g. for lending). These functions create wealth for
the participants, and they provide unique advantages unavailable in traditional
financial systems. Our review speaks to the notion of decentralized basic
income - analogous to universal basic income but guaranteed by financial
products on blockchains instead of public policies. We will go through their
implementations of how savings can be channeled into the staking deposits in
Proof-of-Stake (PoS) protocols, through fixed-rate lending protocols and
staking derivative tokens, thereby exposing savers with minimal risks. We will
discuss potential pitfalls, assess how these protocols may behave in market
cycles, as well as suggest areas for further research and development.
