5/16/2023 0 Comments New defi coins 2021![]() I sell them for $45,000, repay the loan of $20,000 and am now $25,000 in profit. So overall I’m paying a negative interest rate. That’s right, they incentivized you to borrow to the tune right now of 4%+. My borrowings also generate me a 4.3% yield via a further compound token payout. If you put up $30,000 collateral at 6.5% and you are getting charged 9% on $20,000, you will actually be in profit. I pay 8%, but meanwhile my collateral earns interest, which, depending on the day, almost covers the borrowing interest on the $20,000. I could have just as well bought a Lambo or a house. USDc will only ever be $1 a token to repay so I swap it for ethereum because I think it will go up. I borrow $20,000 in USDc, a stable crypto, from Aave. I want to buy more and in effect lever up my ethereum position, so I lodge $30,000 of crypto in compound and I also did something similar with Aave. Follow this logic and get an idea why this revolution crushes the old way of doing business.Įthereum is $450 a coin. There is a good reason to borrow, if you have the collateral to cover the loan by 150%, as I mentioned in a previous article. ![]() You get 6.4% out of the 8.37% they are charging people to borrow. The rates handed out by Compound and Aave are just the flipside of what they charge. on your money in the old financially repressed world, all the numbers seem to have a 0. ![]() saver but looking on what you get in the U.S. 6.4% yield is ‘to die for’ in any event and 3.6% more yield in a token that may easily moon even more than it has, is just great. As I write I am getting 6.43% on my $1 USDc stablecoins plus another 3.6% in compound. Ethereum transaction fees, which can go all over the place, from $20 to $150 or more for a deposit and withdrawal the round trip, means you have to move in size, say $10,000-plus, but the yield is real.Ĭompound (COMP): Compound is a savings and borrowing application like Aave but with a twist in that it pays some of the yield in its own highly rated compound token. As I write that’s around 10%+ APR on a stablecoin. It is my go to site to buy and sell tokens.Īave (AAVE): Aave is a site where you can lodge your tokens and get paid interest on them. It lets anyone with an Ethereum wallet trade tokens, make fee income by being a market maker that lodges liquidity to enable token swapping, and lets users create a market for any token they please and are prepared to fund the liquidity for, all without a how-de-doo. Chainlink is the number one in Defi as fresh data flow is key for so many DeFi applications. This is how sites like Aave, which is a DeFi savings and loan, automatically knows how much a coin being borrowed or deposited is worth. It is an Oracle and supplies values to other projects for a fee. The “blue crypts” (let me now lay claim to the invention of this adapted term as it doesn’t produce a Google result as of January 22, 2021)l here is a big five.Ĭhainlink (LINK): I don’t hold this token but it is currently the number one DeFi token by market cap. The place to start genning up is with the big names in the DeFi space and I have, do and will own these names on and off and for a long time to come.
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