Official BGOL Crypto Currency Thread ★★★★★
- Thread starter Matt Beesy
- Start date
I came across this post on Reddit that had some cool DeFi strategies
Defi, decentralized finance, is often referred to as the Wild Wild West of Crypto. But after journeying in Defi for over a year, I've learned that the West is only 'wild' for the cowboys and mercenaries—they are known as 'degens' around these parts. For this post, I'll provide ways for you to prosper in the Wild West as a steady and humble farmer.
Edit: Forgot to mention that this guide prioritizes security over profits. The rules of the low-risk strategies are to (1) hold pristine assets like BTC and ETH, (2) avoid impermanent loss and splitting assets as you would by directly being in a LP position, (3) use reputable dapps, (4) use simple strategies (no leverage, no auto-compounding, etc.).
Ethereum - Very high gas fees
Wallet - Metamask or Ledger | Dex - Uniswap or SushiSwap are both good
I wouldn't recommend Defi on Ethereum due to high fees and because the roadmap is to stop using Ethereum for general purposes migrate to layer 2s; but, there are protocols that are only the Ethereum network right now. When using Ethereum, I recommend using as few dapps as possible to avoid gas fees.
The simplest Ethereum Defi strategy is to deposit ETH into Tokemak. The expected yield is 8-12%. Using Tokemak, you'll be a single-token liquidity provider. This allows you to avoid impermanent loss (IL) and you can hold 100% of ETH instead of splitting your assets like a typical liquidity provider.
But the IL doesn't just disappear. There are other type of users that work as "managers" who play a role in deciding how the protocols makes profits. I won't dive deeper into this aspect since it's a different strategy but for those interested to learn more, here's an explanation.
Downsides: Expect to spend heavily on fees (~$200) on bridging to Ethereum as well as approving and depositing ETH. And the same amount for the withdrawing process. If the fees are peanuts to you, feel free to use this strategy, Mr/Mrs. Whale. You'll be earning rewards via the protocol token, TOKE, as rewards, which may not be ideal given that TOKE does suffer from high price volatility and selling pressure.
Polygon - Negligible fees (~$0.02)
Wallet - Metamask or Ledger | Dex - QuickSwap, Uniswap, or SushiSwap
Polygon really made its strides between April to July 2021 when they launched a $40M incentive program and since they've been reliable and competitive. And with Polygon fees being so low, you’re pretty much free to do whatever.
In terms of low-risk Defi investing, an Aave + Curve strategy is currently the golden standard. Adding the rates for lending and providing liquidity and subtracting it from the costs of borrowing, the expected yield is 4-6%. This can be done by depositing into Aave, using the deposits as collateral to borrow a stablecoin, and using the borrowed stablecoins to provide liquidity in Curve.
As a low-risk user, the ideal borrowing rate is 30% of your deposits (ie. deposit $1K, borrow $300). At this rate, you'll be liquidated if your deposits depreciate more than 45%. Given that it historically takes several days or cryptos like BTC or ETH to crash, giving you a long enough timeframe to manage your risks. You can further mitigate liquidation risks are to deposit stablecoins, which improves the stability of your portfolio, while depositing even more volatile assets like MATIC will increase risks. It's all about risk management.
Downsides: Borrowing and lending on Aave exposes you to liquidation risk and will require you to properly manage your assets. You will "be your own bank" and that isn't easy. Alas, this is one of the few ways to participate while holding assets like BTC and ETH and avoiding liquidity providing risks. You'll be earning rewards in wrapped MATIC and some rewards in CRV (a protocol token but has good fundamentals and has held its value historically).
Terra - Relatively high fees (~$1)
Wallet - Terrastation | Dex - TerraSwap or AstroPort
Terra is flag-shipped by the successes of Anchor Protocol and their stablecoin ecosystem that has a presence among most major defi networks thanks to the Cosmos network. But the option in Terra network itself are limited. I would only recommend using Terra if you want exposure to LUNA or if you're in need of a Defi savings account. But I would consider exposure to LUNA as having medium to high risks, which is beyond the scope of this post.
For low-risk Defi participation, I can only recommend depositing UST in Anchor's Saving Protocol. The expected yield is 19% annual percentage yield. By using Anchor's savings protocol, you'll be reward from the protocol's revenue streams from (1) borrowing interest and (2) staking deposits. This revenue comes from another feature in Anchor that allows users to deposit LUNA or ETH and borrow UST, the native algorithmic stablecoin.
You can further optimize your yield via strategies like using your deposit as collateral for other protocols, but again those are medium to high risk strategies that go beyond the scope.
Downsides: A ~19% savings account is an undoubtedly insane yield granted traditional banks can barely offer 1% for a similar product. But this isn't too far fetched given that Defi flips the model and instead of getting 20% of the revenue while banks get 80%, Defi users get 100%. The risks are explained thoroughly here. The ones that stand out are de-pegging, regulatory risk, and lowered yield as a result of decreasing protocol revenue. You'll be earning rewards in UST.
Avalanche - Low fees ($0.3) but can high (>$5) when congested
Wallet - Metamask | Dex - TraderJoe or SushiSwap
A lot of big Defi players such as Aave, Curve, and Abracadabra also built on Avalanche, which is why it was able to rapidly grow when it first launched. That and it's $180M incentive program, which dwarfed Polygon's incentive program.
With Avalanche, you could do the same Aave + Curve strategy and get a similar yield. But, unlike Polygon (at least not yet), Avalanche has Abracadabra, which is a reputable dapp that's also built on Ethereum. So an alternative low-risk strategy would be to use AAVE + Abracadabra. The expected yield is 4-6%. You'll be borrowing and lending on Aave and providing liquidity on Curve or Abracadabra.
Under the hood, you're using Curve to provide liquidity for stablecoins that includes its algorithmic stablecoin, Magic Internet Money (MIM). The revenue comes from a liquidity fee that traders pay to swap between these stablecoins pairs. Again, you don't need to know any more about the protocol but you can read more about it here.
Downsides: Again, you're borrowing and lending, which makes you vulnerable to liquidation risks if you're mismanaging your assets. By using Abracadabra, which works on top of Curve, you're increasing your exposure to the smart contracts of three protocols. In Aave, you'll be earning rewards in wrapped AVAX and, in Abracadabra, in the protocol token, SPELL (likewise to TOKE, protocol tokens are not as ideal to hold as network tokens).
---
I'll end this post with these four networks that I believe present the best opportunities at a low-risk based on factors that include total value locked and history among others. This also isn't a list to rank Defi ecosystems, I think each have their own benefits, opportunities, and risks. I know there are other promising networks out there with equally good, if not better opportunities. I'll be making a follow-up posts on them. But for now, thanks to anyone who read up to this point!
Defi, decentralized finance, is often referred to as the Wild Wild West of Crypto. But after journeying in Defi for over a year, I've learned that the West is only 'wild' for the cowboys and mercenaries—they are known as 'degens' around these parts. For this post, I'll provide ways for you to prosper in the Wild West as a steady and humble farmer.
Edit: Forgot to mention that this guide prioritizes security over profits. The rules of the low-risk strategies are to (1) hold pristine assets like BTC and ETH, (2) avoid impermanent loss and splitting assets as you would by directly being in a LP position, (3) use reputable dapps, (4) use simple strategies (no leverage, no auto-compounding, etc.).
Ethereum - Very high gas fees
Wallet - Metamask or Ledger | Dex - Uniswap or SushiSwap are both good
I wouldn't recommend Defi on Ethereum due to high fees and because the roadmap is to stop using Ethereum for general purposes migrate to layer 2s; but, there are protocols that are only the Ethereum network right now. When using Ethereum, I recommend using as few dapps as possible to avoid gas fees.
The simplest Ethereum Defi strategy is to deposit ETH into Tokemak. The expected yield is 8-12%. Using Tokemak, you'll be a single-token liquidity provider. This allows you to avoid impermanent loss (IL) and you can hold 100% of ETH instead of splitting your assets like a typical liquidity provider.
But the IL doesn't just disappear. There are other type of users that work as "managers" who play a role in deciding how the protocols makes profits. I won't dive deeper into this aspect since it's a different strategy but for those interested to learn more, here's an explanation.
Downsides: Expect to spend heavily on fees (~$200) on bridging to Ethereum as well as approving and depositing ETH. And the same amount for the withdrawing process. If the fees are peanuts to you, feel free to use this strategy, Mr/Mrs. Whale. You'll be earning rewards via the protocol token, TOKE, as rewards, which may not be ideal given that TOKE does suffer from high price volatility and selling pressure.
Polygon - Negligible fees (~$0.02)
Wallet - Metamask or Ledger | Dex - QuickSwap, Uniswap, or SushiSwap
Polygon really made its strides between April to July 2021 when they launched a $40M incentive program and since they've been reliable and competitive. And with Polygon fees being so low, you’re pretty much free to do whatever.
In terms of low-risk Defi investing, an Aave + Curve strategy is currently the golden standard. Adding the rates for lending and providing liquidity and subtracting it from the costs of borrowing, the expected yield is 4-6%. This can be done by depositing into Aave, using the deposits as collateral to borrow a stablecoin, and using the borrowed stablecoins to provide liquidity in Curve.
As a low-risk user, the ideal borrowing rate is 30% of your deposits (ie. deposit $1K, borrow $300). At this rate, you'll be liquidated if your deposits depreciate more than 45%. Given that it historically takes several days or cryptos like BTC or ETH to crash, giving you a long enough timeframe to manage your risks. You can further mitigate liquidation risks are to deposit stablecoins, which improves the stability of your portfolio, while depositing even more volatile assets like MATIC will increase risks. It's all about risk management.
Downsides: Borrowing and lending on Aave exposes you to liquidation risk and will require you to properly manage your assets. You will "be your own bank" and that isn't easy. Alas, this is one of the few ways to participate while holding assets like BTC and ETH and avoiding liquidity providing risks. You'll be earning rewards in wrapped MATIC and some rewards in CRV (a protocol token but has good fundamentals and has held its value historically).
Terra - Relatively high fees (~$1)
Wallet - Terrastation | Dex - TerraSwap or AstroPort
Terra is flag-shipped by the successes of Anchor Protocol and their stablecoin ecosystem that has a presence among most major defi networks thanks to the Cosmos network. But the option in Terra network itself are limited. I would only recommend using Terra if you want exposure to LUNA or if you're in need of a Defi savings account. But I would consider exposure to LUNA as having medium to high risks, which is beyond the scope of this post.
For low-risk Defi participation, I can only recommend depositing UST in Anchor's Saving Protocol. The expected yield is 19% annual percentage yield. By using Anchor's savings protocol, you'll be reward from the protocol's revenue streams from (1) borrowing interest and (2) staking deposits. This revenue comes from another feature in Anchor that allows users to deposit LUNA or ETH and borrow UST, the native algorithmic stablecoin.
You can further optimize your yield via strategies like using your deposit as collateral for other protocols, but again those are medium to high risk strategies that go beyond the scope.
Downsides: A ~19% savings account is an undoubtedly insane yield granted traditional banks can barely offer 1% for a similar product. But this isn't too far fetched given that Defi flips the model and instead of getting 20% of the revenue while banks get 80%, Defi users get 100%. The risks are explained thoroughly here. The ones that stand out are de-pegging, regulatory risk, and lowered yield as a result of decreasing protocol revenue. You'll be earning rewards in UST.
Avalanche - Low fees ($0.3) but can high (>$5) when congested
Wallet - Metamask | Dex - TraderJoe or SushiSwap
A lot of big Defi players such as Aave, Curve, and Abracadabra also built on Avalanche, which is why it was able to rapidly grow when it first launched. That and it's $180M incentive program, which dwarfed Polygon's incentive program.
With Avalanche, you could do the same Aave + Curve strategy and get a similar yield. But, unlike Polygon (at least not yet), Avalanche has Abracadabra, which is a reputable dapp that's also built on Ethereum. So an alternative low-risk strategy would be to use AAVE + Abracadabra. The expected yield is 4-6%. You'll be borrowing and lending on Aave and providing liquidity on Curve or Abracadabra.
Under the hood, you're using Curve to provide liquidity for stablecoins that includes its algorithmic stablecoin, Magic Internet Money (MIM). The revenue comes from a liquidity fee that traders pay to swap between these stablecoins pairs. Again, you don't need to know any more about the protocol but you can read more about it here.
Downsides: Again, you're borrowing and lending, which makes you vulnerable to liquidation risks if you're mismanaging your assets. By using Abracadabra, which works on top of Curve, you're increasing your exposure to the smart contracts of three protocols. In Aave, you'll be earning rewards in wrapped AVAX and, in Abracadabra, in the protocol token, SPELL (likewise to TOKE, protocol tokens are not as ideal to hold as network tokens).
---
I'll end this post with these four networks that I believe present the best opportunities at a low-risk based on factors that include total value locked and history among others. This also isn't a list to rank Defi ecosystems, I think each have their own benefits, opportunities, and risks. I know there are other promising networks out there with equally good, if not better opportunities. I'll be making a follow-up posts on them. But for now, thanks to anyone who read up to this point!
My goals this year with crypto:
Next three months
CRO 1k
Solana 2.5
MATIC 2.5
MANA 500
Sandbox 1k
Avalanche 2.5
Probably gonna keep stacking Cro the rest of the year tho.
Next three months
CRO 1k
Solana 2.5
MATIC 2.5
MANA 500
Sandbox 1k
Avalanche 2.5
Probably gonna keep stacking Cro the rest of the year tho.
Also anyone dealing with the drip network have a buddy ID? Trying to stake this BNB right quick.
drip.community
dripcommunity
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Crypto.com Suspends Withdrawals as Users Claim Their Funds are Stolen
While Crypto.com is insisting that its users’ funds are safe, some of these users have stated that their funds have been stolen.
Crypto.com Suspends Withdrawals as Users Claim Their Funds are Stolen
While Crypto.com is insisting that its users’ funds are safe, some of these users have stated that their funds have been stolen.www.yahoo.com
That's not good
Crypto.com Suspends Withdrawals as Users Claim Their Funds are Stolen
While Crypto.com is insisting that its users’ funds are safe, some of these users have stated that their funds have been stolen.
I had to reset my 2 factor authentication and relogin again. All my funds seem to be there tho. Anyone showing different?
Glad they didn't touch your funds. I personally don't use them for anything
Questiion....If i want to convert my bitcoin into one of the stablecoins USDCoin, tether, etc.....which one is the "best" one? Is there really a difference/
Al
All these took a rise as of your posting
My question would be why would you wanna convert btc to a stable?
Traded all my Saitama last week for Shibnobi. Shit is pumpin like a mothafucka. If that multichain swap lives up to expectations this shit gonna be a gamechanger fa real.
I aint selling my saitama, I expect some pumps when they finally get saitamask up and also some pumps around tax return time..
but its a MUST to diversify your portfolio and dont just
put all your eggs in one basket...
Looks like it could be a winner.. but do your homework on those Devs and sniff out those rug pulls...
check out them wallets.. if you see like the top wallets holding the most of a token...
dont be afraid to take profits and scram on them, with these meme coins
sometimes you only get a few chances
to do that shit...!!!
From my understanding of the new tax rules, this would be a way to avoid taxes if you are trading alot of coins. Instead of the exchange showing that I've sold a coin and made a profit which would immediately subject me to paying a tax on that profit, If i sell and convert to a stablecoin instead, i delay the taxable event. Feel free to correct me if I'm wrong
Naw not trying to correct just understand the reasoning. I can only say what I would do. Now BTC is digital gold. I would never sell or trade it. Only loan against it. It's allways going up in value over time. You could setup a savings acct with blockfi or celsius and get a decent yearly apy and take out a loan against it if you need to cash out or buy more. You don't pay taxes on loans and you keep the btc which keeps going up in value.
You would still need to pay taxes. If you make a trade, you are required to pay taxes regardless of if it is a stable coin or not.
I don't recommend for obvious reasons, but you may be able to hide trading into a stable coin if you use a decentralized exchange vs a centralized exchange. Everything can still be seen but no one is reporting your trades on a decentralized exchange for now and it harder to know who a wallet belongs to.
Personally I just pay the taxes and call it a day.
When they get their shit together I can buy back in no problem. Every fuckin thing they do is a fuckin misstep from the first vegas event a few months back to the release of saitamask. If the shibnobi release of the multiplatform swap and their own blockchain goes thru without a misstep it's fuckin game over. They gonna explode. Lot more room for growth market cap wise too so...
Plus....I don't like that cracka Russ face. Remind me of racist fucks I went to school with.
Which is a good decentralized exchange? I'm currently on Coinbase, Kracken, Bitstamp, Bittrex and Kukcoin
Alot of hard-core crypto traders do this. If I understood it right, folks do it during market swings. It stabilizes their money until they are ready to jump back in.
Good info!!!
KuCoin, Uniswap, pancake swap, Defi Swap, Binance, etc
Most exchanges that doesn’t require you to confirm a KYC are decentralized and offer you anonymity which is the main reason people are using a Dex.
I have both types.
if you had invested $1000 at $. 08 in Bitcoin in 2010, that investment would be worth over $287 million dollars today.
An initial $100 investment held for a tad over 11 years and four months has gained almost 8,000,000,000% and would now be worth $7,964,042,400.
Yeah I see things a lil different. I could never get into what they call day trading, I'm looking to hold for long term. BTC track record is undefeated as an digital asset. But I get the excitement of finding the next big thing. My strategy this year is to aqquire as much btc as I can. Matter of fact for the next 5 years. Market dips. Borrow against it and buy more btc.
It can't be manipulated. It's only going up over time. I would never sell it.
I see what you are saying but you are looking at this particular instance the wrong way. Say you bought bitcoin in 2016 when it was around 1000, I believe. You sell when it went crazy at 20,000. You put your money in a stable coin. Your stable coin stays at 20,000 or close to it. You earn interest while it's sitting there. Bitcoin crashes to around 4000, by 2018 (somewhere around there) . You jump back into bitcoin and now you have 5 (more or less) bitcoin instead of the one you bought originally.
That's the extreme example. However, the point being is to jump out at peaks at then pick points they are willing to come back in during dips and valleys.
I believe this practice is a little different, because it's not really day trading, per se. It's there way of ensuring they are maximizing profits on their crypto positions and maximizing positions during dips. Maybe you can argue it's a form of day trading, but it seems a lot safer than what we consider traditional day trading. There is no loss of money trying to bet against the market.
There is a caveat to this practice. I don't think the high end guys are worried about taxes, if you know what I mean.
As to your other point, Bitcoin has traditionally taken some monster hits before hitting historical highs. Please keep that in mind
Sounds like you got a solid plan. Just remember like ANY investment, diversification is always a good thing.
If I misunderstood any of your points, I apologize.
Got mine.
I see what you saying. I just look at btc differently than altcoins. Yeah I got shiba and shinja and Algorand and CRO. FTM whole ecosystem got me salivatin right now. But my main aqquisition will be BTC as an asset. Not worried about it going up and down along the way. Just steady gettin it like 100, 200, 300 a month added to the pot. Then along the way at different points take a loan against it, buy more and add that to the pot. Still makin plays with altcoins along the way tho.
As far as the volatility goes, with all this institutional money gettin involved and the expanding awareness of the general public...crypto markets gonna be a lot more stable in the near future I think.
CRYPTO.COM confirms hundreds of accounts hacked by threat actors — $34 MILLION withdrawnA multi-million dollar cyber attack on the company has led to the compromise of 484 accounts, with $34 million in total withdrawn. (Bleeping Computer)
The company’s CEO has stressed that customer funds are not at risk on the world’s third-largest cryptocurrency trading platform.
Following the detection of the suspicious activity, the site’s withdrawal function was shut down for approximately 14 hours — it is still not yet 100% known who is behind the attack.
Crypto.com says hackers stole more than $30 million in bitcoin and ethereum
Cryptocurrency exchange temporarily suspended withdrawals after cybercriminals raided 483 customer accounts.
www.cbsnews.com
AMC Dishes Out Free NFTs To Over 425,000 Shareholders: What You Need To Know - AMC Enter Hldgs (NYSE:AMC)
AMC Entertainment Holdings Inc (NYSE: AMC) is rewarding more than 425,000 of its shareholders with non fungible tokens minted on the WAX platform.
www.benzinga.com
At least they are finally admittng it
A multi-million dollar cyber attack on the company has led to the compromise of 484 accounts, with $34 million in total withdrawn. (Bleeping Computer)
The company’s CEO has stressed that customer funds are not at risk on the world’s third-largest cryptocurrency trading platform.
Following the detection of the suspicious activity, the site’s withdrawal function was shut down for approximately 14 hours — it is still not yet 100% known who is behind the attack.
Not your keys… well you know the rest
A multi-million dollar cyber attack on the company has led to the compromise of 484 accounts, with $34 million in total withdrawn. (Bleeping Computer)
The company’s CEO has stressed that customer funds are not at risk on the world’s third-largest cryptocurrency trading platform.
Following the detection of the suspicious activity, the site’s withdrawal function was shut down for approximately 14 hours — it is still not yet 100% known who is behind the attack.
Crypto.com says hackers stole more than $30 million in bitcoin and ethereum
Cryptocurrency exchange temporarily suspended withdrawals after cybercriminals raided 483 customer accounts.
AMC Hands Out Free "I Own AMC" NFTs to Shareholders
Members have until January 31 to claim them.
hypebeast.com
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