When I really got into DeFi last year/early this year, I thought DeFi is going to be the new future. DeFi will take over conventional finance and change the world... I thik DeFi did something and changed something.
I still like DeFi and I still think has a future. I just don't know if it is going to be bright as I thought it would be.
I saw this article this morning and I kind of felt the same way.
Lending Stablecoins with DeFi
I have been experimenting and chasing new things and high interest rates and stuff... but
Is it really worth it?
I have been asking myself this question over and over lately.
I got email from Stellar today and found out that Stellar started their staking with 25% rewards I wanted to jump right in. Try it out and experiment a little, but I decided not to and this is the staking thing 👇
Introducing the Stellar Community Staking Marathon
Becuase I asked myself the same question again... "is it worth it?" idk for sure until I try but I will pass for now.
Back to lending stablecoins. Interest rates on stablecoins fluctuate a lot and they can be over 50% - 100% at times, and I have chased them. I have had some fun and tried that couple times, but I could never hold them long enough to become anything because those rates can go up crazy and drop down to 0% very quickly.
But this guy did it. He deposited $100 worth of stablecoins into different platforms and HODL them for a year.
source
Results are that those stablecoins can actually earn you interests.
source
If you deposit $100 into these lending platforms, you will earn about $5 each in a year.
If you have $100 in your regular bank account, you will never earn this much interest so $5 interest is not too bad?
But then he traded 3 ETH to get the stablecoins ready and deposited into the platforms and everything you do costs gas money. Taking out money will cost money so all the earning will disappear in fees and ended up losing money in the end. (and i have had the same experiences couple times)
If you DIDN'T spend that money for stablecoins and gas and kept the original 3 ETH deposit which was about $515 a year ago, that would be $1078 or more since ETH is having a big 5 year old celebration. So doing nothing and just HODL makes more sense?
I think so... at least for stablecoins.
There are a lot more stuff going on in DeFi that could make you lots of money even with the high gas fees and everything, but I feel like DeFi right now is an expensive people's game.
12 Months ago, $100 worth was a decent amount to play with experimental technology. Today, I wouldn’t bother with anything less than $1000 because of gas costs to get in and get out of protocol. Small deposits don’t make sense economically anymore.
I couldn't agree more... even though you could go small and end up big in DeFi is very possible.
You just have to be in the right place at the right time... and hopefully, you are in on it while it's hot like fashion.
source
In the end, I am not sure if chasing DeFi is worth it or not because DeFi is happening, things are changing rapidly, evolving in very fast pase, so I think continuous "education" and making smarter decision are the key. Fortunately, I am still in green overall. thank goodness 😝
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