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I love everything crypto. I believe by 2030 we will see a world run mostly by blockchain. This is a bold claim, but the advancements in the industry offer a less fragmented, secure, and hopefully more scalable financial infrastructure. Smart contracts by themselves are an amazing invention. I’m creating this blog series to show what my DeFi portfolio is today and the value as time goes on.
Also I would like to note that I am a programmer and I have worked with various technologies. I don’t prefer all the ridiculous titles we give ourselves sometimes like architect, engineer, etc. I am just simply a curious programmer.
My Defi Net Worth
This is my current DeFi net worth according to Zapper. This tool monitors the Ethereum blockchain and it’s L1s and L2s. With that being said I do own bitcoin on off the Ethereum blockchain. I also own Cardano and will be getting into Cardano DeFi later. I do own some other coins that aren’t going to be mentioned unless specifically used with Defi. So while my crypto’s worth as a whole is much larger, this series will focus purely on DeFi.
DeFi Platforms
So I currently on use two DeFi platforms. Aave and Uniswap on Polygon L2 of Ethereum. I use these apps because of their “long” history of being secure and having great uptime. I put long in quotes because its been like 3-4 yrs but that is long compared to most DeFi apps. Also I plan to add Curve, which I have used in the past, but some recent news with one of the developers worries me. Also there was an exploit recently which lowers my confidence. That being said I still do think Curve is a great platform.
Liquidity Pools
So far I only have 1 main position that I am currently building for passive income. It is about $232 dollars worth of ETH and USDC. I use Uniswap V3 which allows you to choose what prices you provide liquidity for. I am using the 1701-2050 range for ETH. USDC is a stablecoin so for the most part it’s price doesn’t vary much, usually if it does its at the sub-penny level.
I will continue to build this LP and eventually I will add a USDC-WBTC pair. Uniswap pays its fees in the two tokens you provide as liquidity, so I don’t have to worry about some random 3rd coin I have to dump to get my profits. As a rule I would only provide liquidity for coins you believe in long term. Also if you do decide to swap your profits I would either choose a stablecoin, BTC, or ETH.
Long term I don’t see those assets going down or away.
Long Term Strategies
So a lot of the following information will be based on research and assumptions. There is no silver bullet in crypto and no-one definitively knows where the market or individual coins are going. With that being said, I envision a world where ETH are Cardano battle as L1’s like Apple and Microsoft almost. I also think bitcoin will perceived as digital gold. I don’t think there is much room for the bitcoin blockchain to grow. There is too many people who want to keep it in the stone age and the lightning network does work but the issue is there still isn’t any smart contracts, well not really anyway on the bitcoin network.
Bitcoin will be seen long term as a store of value. I think in its current format that is all it needs to be, to be seen as true money. As far as Ethereum and Cardano are concerned they both will eventually be generation 3 blockchains that will enable the smart contracts that power the world. Yes I know ETH is technically gen 2 but there will eventually be enough hard forks to get it there.
Then there is layer 2’s like Polygon, Arbitrum, and Optimism. These networks will help scale Ethereum’s transaction capabilities and Cardano plans to scale its network with Hydra which is still apart of its L1. That being said I’m making huge bets on BTC, ETH and ADA. Matic being a gas token helps. So my next LP Position after USDC-WBTC will be probably USDC-MATIC.
I am waiting right now to see where the market goes. Assuming the market can’t pull back is always a bad mindset, so I’m holding some cash to the side at the moment.
Borrowing Strategies
I don’t think that borrowing stablecoins to yield farm is currently feasible. The borrow rate is pretty much exactly the return you would get from yield farming or less.
There is always opportunities in a bull market, but you have to be cautious because of smart contract risk, and general pump and dump schemes as well.
You could short ETH or MATIC but I don’t know where the price is going and what the bottom is or will be. I would honestly just earn interest on AAVE at this point.
Diversification and Risk Management
I would say that being diversified in crypto really only works when talking about upside. Being that if I had X coin and it mooned from a 1 million dollar market cap to 1 billion then I would have 100000% return, but on the flipside it easily could be a pump and dump and I lose everything. More than likely its a pump and dump or pointless tech. With BTC and ETH you are highly unlikely to lose everything and more than likely in the long run you will profit.
It takes me back to saying I’ve heard a few times. “Would you rather get rich quick or rich for sure?”. I honestly think concentrating 90% of your portfolio in BTC/ETH would be the best bet for most people and you can sprinkle the last 10% in random coins. I do have a large amount of ADA but that is from a lot of research and due diligence. Do your own research before investing!
Disclaimer
Disclaimer: The information provided in this blog series is for informational and educational purposes only. I am not a financial advisor, and the content presented here should not be construed as financial advice or recommendations for making investment decisions. Crypto investments, especially in the decentralized finance (DeFi) space, carry inherent risks.
The value of cryptocurrencies can be highly volatile and may result in significant financial losses. It’s important to note that past performance is not indicative of future results. I am sharing my personal experiences and opinions based on my own journey in the crypto DeFi space. However, individual investment situations vary, and what may be suitable for one person may not be suitable for another. Before making any investment decisions, it is recommended that you conduct thorough research, seek advice from a qualified financial professional, and carefully consider your risk tolerance.
I do not endorse or guarantee the accuracy, completeness, or reliability of any information presented in this blog series. Any actions you take based on the information provided here are at your own risk, and I shall not be held responsible for any losses or damages that may occur as a result. Please be aware that the crypto DeFi space is evolving rapidly, and regulations may vary by jurisdiction. It is your responsibility to understand and comply with applicable laws and regulations in your region. By reading and engaging with this blog series, you acknowledge and agree to the terms of this disclaimer. If you have any doubts or concerns about your investment decisions, it is strongly recommended that you consult with a professional financial advisor before proceeding. Your financial well-being is paramount, and your decisions should be made with careful consideration and due diligence. Thank you for your understanding.