Ink Chain is still in its early growth phase, and that means outsized opportunities for those who participate now. From funding rate arbitrage to automated market making, the ecosystem offers multiple ways to put your capital to work. Some are passive, some require active management, and some fall in between thanks to automation.
This guide covers every meaningful earning strategy available on Ink Chain today, ranked from lowest to highest risk.
1. Liquidity Provision on Velodrome
Risk Level: Low to Medium Expected APY: 5-25% depending on the pair Effort: Low (set and forget)
Velodrome is one of the primary DEXs on Ink, using a vote-escrow AMM model similar to Curve. By providing liquidity to trading pairs, you earn swap fees and emission rewards.
How it works: Deposit equal values of two tokens into a liquidity pool. When traders swap between those tokens, a portion of the fee goes to liquidity providers. Additionally, Velodrome distributes protocol emissions to incentivized pools.
Best pairs for beginners: Stablecoin pairs (like USDT0/USDC) offer lower yields but minimal impermanent loss. ETH/USDT0 provides higher yields with moderate risk.
Considerations: Impermanent loss is the primary risk. If the relative prices of your deposited tokens change significantly, you may end up with less value than if you had simply held. Stablecoin pairs minimize this risk.
2. Delta Neutral Funding Rate Farming
Risk Level: Low to Medium Expected APY: 10-40% annualized (varies with funding rates) Effort: Low with automation
This is one of the most elegant yield strategies in DeFi, and Otomate automates the entire process.
How it works: You simultaneously buy spot kBTC on Nado and short BTC-PERP. These opposing positions cancel out your directional exposure, meaning you do not care if Bitcoin goes up or down. Your profit comes from funding rate payments.
In most market conditions, the perpetual futures price trades above spot (contango), and long holders pay short holders. By being short perps with a matching long spot position, you collect these funding payments without directional risk.
On Otomate: The Delta Neutral feature handles everything. Deposit USDT0, and the system opens both legs of the position, monitors the delta, rebalances when drift exceeds 5%, and tracks your funding earnings. A dedicated subaccount (prefixed DN-) isolates this strategy from your other activities.
Considerations: Funding rates can turn negative (shorts pay longs) during bearish markets. The strategy underperforms when funding rates are low or negative for extended periods. Rebalancing incurs small transaction costs.
3. Smart Market Making
Risk Level: Medium Expected APY: 15-60% annualized (varies with volatility) Effort: Low with automation
Market making involves placing buy and sell orders on both sides of the order book, earning the spread between them. On Nado Protocol, this is a particularly attractive strategy because maker fees are low (0.01% + 0.02% builder fee).
How it works: The Otomate Smart Market Making system places limit orders above and below the current market price. When both sides fill, you earn the spread. The system uses post-only orders to guarantee maker fees and manages inventory risk through adaptive hedging.
Risk profiles available:
- Conservative: 30bps spread, 2x leverage, 2.5% max drawdown
- Balanced: 25bps spread, 3x leverage, 5% max drawdown
- Aggressive: 20bps spread, 3x leverage, 10% max drawdown
Market bias: You can set a directional bias (Bullish, Neutral, Bearish) that adjusts the strategy's behavior. A bullish bias tilts inventory management to favor holding long positions, for example.
Considerations: Sharp, sudden market moves can cause losses if orders on one side fill without the other side filling. The max drawdown setting acts as a circuit breaker to limit losses.
4. Copy Trading
Risk Level: Medium to High (depends on the trader) Expected APY: Highly variable Effort: Low (fully automated)
Copy trading lets you replicate the trades of successful traders automatically. On Otomate, this works by monitoring elite traders on Hyperliquid and replicating their positions on Nado in your own non-custodial subaccount.
How it works: Choose a trader from the discovery interface, set your copy multiplier and risk parameters, delegate your subaccount, and deposit funds. Every time the trader opens, closes, or modifies a position, the same action is executed in your account proportionally.
Earning potential depends entirely on the trader you copy. Otomate provides extensive metrics to help you evaluate traders: ROI, win rate, max drawdown, average trade duration, and trading style tags.
Considerations: Past performance does not guarantee future results. Diversifying across multiple traders and strategies reduces single-trader risk. Hard stop thresholds protect against catastrophic drawdowns.
5. Automated Trading Strategies
Risk Level: Variable (you design the rules) Expected APY: Highly variable Effort: Medium (design phase), then Low (execution is automated)
Otomate's Strategy Builder lets you create custom trading rules in plain English. The AI parses your strategy into executable conditions and runs it automatically.
Example strategies:
- "Buy BTC when RSI drops below 30, sell when it rises above 70"
- "Open a long position when the 9-period EMA crosses above the 21-period EMA"
- "Close all positions if my portfolio drops 5% from its peak"
How it works: Describe your strategy in natural language. The AI converts it into structured rules with specific conditions (RSI thresholds, EMA crossovers, price levels, funding rates). You can backtest against historical data before deploying with real capital.
Considerations: Strategy performance depends on market conditions. What works in a trending market may fail in a ranging market. Backtesting helps but does not guarantee future performance. Start with small amounts while validating your approach.
6. Nado Points and Ecosystem Rewards
Risk Level: None (earned through activity) Estimated Value: Variable, potentially significant Effort: None (earned passively through trading)
Active participants in the Ink Chain ecosystem earn Nado points based on their trading volume. These points accrue automatically and are tracked on-chain through Nado's archive API.
Otomate has its own points system that rewards trading activity, copy trading, referrals, and weekly engagement streaks. Points translate into platform rewards and potential future benefits.
How to maximize: Trade regularly, use copy trading features, participate in the referral program, and maintain weekly activity streaks. Every $100 of trading volume earns points on both the Nado and Otomate levels.
7. Referral Earnings
Risk Level: None Earning Potential: 10% of referee's points Effort: Minimal
Otomate's referral program rewards you with 10% of the points earned by anyone who signs up using your referral link. This compounds over time as your referrals trade actively.
How it works: Share your unique referral link. When someone connects their wallet through your link and starts trading, you earn a percentage of their activity-based rewards. There is no cap on the number of referrals or the earnings.
Comparing Strategies: Risk vs Reward
| Strategy | Risk | Expected APY | Automation |
|---|---|---|---|
| LP on Velodrome | Low-Medium | 5-25% | Manual |
| Delta Neutral | Low-Medium | 10-40% | Full (Otomate) |
| Smart Market Making | Medium | 15-60% | Full (Otomate) |
| Copy Trading | Medium-High | Variable | Full (Otomate) |
| Strategy Builder | Variable | Variable | Full (Otomate) |
| Points/Rewards | None | Variable | Passive |
| Referrals | None | 10% of refs | Passive |
Combining Strategies
The beauty of Nado's subaccount model is that each strategy runs in isolation. You can simultaneously:
- Farm funding rates in a DN subaccount
- Run Smart Market Making in a SUB subaccount
- Copy two different traders in separate subaccounts
- Deploy a custom strategy through the Strategy Builder
Each subaccount has its own margin and liquidation levels, so a drawdown in one strategy does not affect the others. This portfolio approach to yield generation is one of the most powerful features of the Ink/Nado/Otomate stack.
Getting Started
The lowest friction entry point is depositing USDT0 into Otomate and trying the Delta Neutral strategy with a minimum of $50. This gives you exposure to the funding rate yield without directional risk, and you can monitor performance before allocating more capital or trying higher-risk strategies.
For more active approaches, explore the trader discovery interface to find copy trading candidates, or describe a simple strategy to the AI Copilot and let it help you build and backtest it.
Ink Chain's ecosystem is still young. The opportunities available today, from ecosystem points to concentrated liquidity rewards, reward early participants disproportionately. Whether you prefer passive yield or active trading, there is a path to earning on Ink.