The DeFi boom cycle is officially in full swing. As of today, we just hit $6 billion USD in Total Value Locked (TVL) in DeFi projects. This is an incredible amount of money for the crypto space and it is even more incredible when you see just how fast it shot to the moon:
On June 1st of this year, we crossed $1B in TVL and people got excited about the advent of DeFi. Many knew that this boom cycle was coming and many more were unaware that this was even happening in the backrooms of Crypto telegrams and the dark corners of crypto twitter. Just 2 and a half months later, we’ve now crossed $6 billion in TVL… $10 billion will likely be here before the end of September.
With all of this money flowing through DeFi, the crypto industry is starting to look more and more like the ICO craze of 2017. There’s good and bad that comes along with that, but for those who spend their time doing hardcore research, this provides a massive opportunity.
There are two types of opportunity that I like to take advantage of:
- Speculative investing
- Value investing
When I speculate on a stock, an option or a cryptocurrency, I’m looking for short-term gains. Usually based on market sentiment as opposed to fundamentals.
When I look to value invest, I’m spending countless hours researching and understanding a stock or cryptocurrency. I’m spending an enormous amount of time and energy getting to know the project from a ground up perspective. That’s how I chose my largest hodlings in both the traditional and crypto landscapes (TSLA & SQ | BTC, ETH, HIVE & BAT).
DeFi Speculation
I’ve been a user of DeFi protocols like MakerDAO for a while now. I use them primarily for either swapping tokens or for lending — taking out a collateralized loan against my crypto. I made an in-depth LeoPedia guide to how I use MakerDAO CDP Vaults if you’re interested.
Outside of that, I am admittedly not as familiar with DeFi as I would like to be. There are so many great protocols and projects out there and I wish I had the time to research and evaluate them all.
With that said, I’m not blind to the opportunity to speculate on these cryptocurrencies that have massive potential in the short-term. I’m doing my best to pick projects to speculate on that have actual fundamental value (not just some shitcoin with a white paper), but I am going based largely on the recommendation of others who I deem to have knowledge about DeFi.
Some of these trades may turn into long-term HODLs as I get more familiar with the fundamentals of each project and spend the time to research them. For now, I’m speculating purely in a short-term, greed-driven mindset. Don’t take any of this as financial advice. Here are the top 5 DeFi coins that I’m now actively trading:
LEND (Aave)
LEND is the token for the Aave platform. Aave is a lending protocol that allows you to take advantage of collateralized loans, flash loans and other unique collateral types. It offers a wider range of tokens and services than MakerDAO.
LEND is currently utilized by holders to pay lower fees and will be used as a governance token in the future. If this follows any similar trajectory to COMP and MKR tokens (which pumped straight to the moon when their governance protocols were launched), then we're just at the beginning stages of a long-term pump cycle.
The more I research Aave, the more bullish I become. I think the fundamentals look solid, but I clearly need to do a lot more research before I classify it as a long-term HODL. For now, I rate it a solid crypto to speculate on.
You can see my buy levels in the chart above. I have bids in starting at $0.39 going down to $0.26, hoping for a wick down from a whale dump to fill my orders.
Resources:
BAL (Balancer)
BAL is another one with a loyal following. This is the one that I know the least about. It has a short history, but many say that it's one of the top liquidity/lending protocols out there and benefits greatly from the COMP ecosystem.
There's been a big pullback the past several days, which makes BAL one of the few DeFi coins that could be a "cheaper" (on a relative scale) entry point as of today.
Resources:
SNX (Synthetix)
SNX is built on Ethereum and it offers synthetic assets - basically a version of tokenizing real-world assets. Again, I don't know much at all about this project, but 
We'll see if I can upgrade it from a speculative play to a long-term HODL after doing some deep research. For now, I've placed some bids in at $5.9 - $6.2 USD.
Resources:
- https://decrypt.co/resources/what-is-synthetix-explained-ethereum-trading-learn
- https://www.synthetix.io/
ADA (Cardano)
I'm not sure if many would classify Cardano as a DeFi coin. It clearly has benefited from the run in DeFi, but it is neither an ERC20 nor a "DeFi-only" protocol.
It's been recommended to me over the past year as a great coin for long-term HODL and while I never found the time to investigate it deeply, it does seem to have a very loyal following and like I said: the coin has legs in the DeFi rally.
I asked around for a short explanation of what Cardano is and here's what I got:
Cardano combines the best of BTC, LTC and ETH. Creating a platform that makes wealth storage, value transfer and smart contracts easier and cheaper than the aforementioned chains.
Again, I need to do more research before I change my classification from speculation to long-term HODL. For now, you can see my buy levels in the chart above.
Resources:
- https://cardano.org/
- Check out the Cardano subreddit - lots of active users and explanations
Rune (ThorChain)
Rune has been recommended to me by 
I put a couple hundred $ into RUNE several weeks back and sold out of the position after making about 25-30% gains. It was a quick speculation play for me and I didn't understand anything about the project.
Now, RUNE has rallied to $1 - the level that these 3 were calling for back when it was just $0.20-$0.50.
They claim that RUNE is a great long-term HODL. Prof K. is probably the most well-versed person I know in the DeFi space, so his recommendations are usually spot on. We'll see how RUNE develops with time, but this is definitely one to watch for short-term speculation with the potential to upgrade to long-term HODL.
As you can see in the chart, I'm targeting a re-entry with a few bids starting at $0.79.
Resources:
Be careful out there. If 2017 taught me anything, it is to be careful when greed is filling the streets. $6 billion locked up in DeFi is a signal of just how much money has started to flow into this space and how quickly it has happened. Booms are followed by busts. DYOR and be cautious at all times.
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