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DEFI MASTERCLASS: HOW TO GET STARTED IN DEFI WITH $10
What is DeFi?
DeFi lets users access crypto financial services with no more than a wallet with some crypto and a Dapp.
DApps facilitate lending, liquidity provision, swaps, staking, and more across many blockchains
In simpler terms, Defi allows you to become your own bank!
Defi tries to eliminate the need for 3rd parties when performing transactions, taking away the power from centralized bodies to the individuals.
Defi is also more secure than centralized finance, as you have control over your assets through using a blockchain enabled wallet.
As defi is a system to decentralize financial transactions, using p2p, Peer to Peer transactions without the need for third parties is a central part of Defi. This is where two parties agree on the terms of a transaction and execute it.
Decentralized finance (DeFi) is a growing ecosystem of blockchain-based financial applications and protocols. Many DeFi projects have their own native tokens, which are used to access the services and features of the platform, as well as to participate in the governance of the protocol. Here are a few examples of DeFi coins:
Ethereum (ETH): Ethereum is the second largest cryptocurrency by market capitalization, and it's the backbone of the DeFi ecosystem. Many DeFi projects are built on the Ethereum blockchain, and use ETH as their native token.
Uniswap (UNI): UNI is the native token of Uniswap, a decentralized exchange (DEX) for trading ERC-20 tokens on the Ethereum blockchain. Uniswap has gained lot of popularity in recent times and UNI token has also seen significant increase in value.
Aave (AAVE): Aave is a decentralized lending and borrowing platform that allows users to lend and borrow a wide range of cryptocurrencies. AAVE is the native token of Aave protocol and used for staking and voting in governance decisions.
MakerDAO (MKR): MakerDAO is a decentralized lending platform that uses a collateralized debt position (CDP) system to issue the stablecoin DAI, which is pegged to the value of the U.S. dollar. MKR is the native token of MakerDAO and used for staking and voting in governance decisions.
These are just a few examples, and the DeFi space is constantly evolving, so there are always new projects and tokens to explore. As always, It's important to thoroughly research any project or token before investing, and consider the risks involved.
How to make money trading DeFi assets:
Here are a few examples:
There are several ways to potentially make $1000 in 30 days through DeFi (Decentralized Finance) platforms, but it's important to keep in mind that the cryptocurrency and DeFi markets can be highly volatile, and any investment carries risk.
Here are a few strategies that some people have used to make money in the DeFi space:
Lending and borrowing: One way to potentially make money in DeFi is to lend out your cryptocurrency and earn interest on it. Similarly, you can borrow cryptocurrency and invest it in higher-yielding assets. However, there is always the risk of default, so it's important to be careful and only lend to reputable borrowers.
Staking: Many DeFi platforms are built on blockchain networks that use a consensus mechanism called "proof of stake" (PoS). In a PoS system, users can "stake" their cryptocurrency (i.e. hold it in a special wallet) to help validate transactions and earn rewards for doing so. This can be a way to earn a passive income, but it's important to do your research and make sure you understand the risks.
Yield farming: Yield farming is a strategy that involves lending or staking your cryptocurrency to a smart contract and then using the rewards you earn to lend or stake other cryptocurrencies, creating a "farm" of lending and borrowing activities. This can be a way to earn a high return on investment, but it's also a relatively new and risky strategy that can be difficult to understand.
Trading: Another way to potentially make money in DeFi is through trading. You can buy low and sell high, or short sell and leverage trading. However, trading carries more risk than other DeFi strategies, as the market can be highly volatile and it's easy to lose money if you don't know what you're doing.
Please be aware that you should always do your own research, be prepared to lose all the invested capital, and never invest more than you can afford to lose. Also, it's important to be aware of the scams in this space, if it sounds too good to be true, it probably is.
How To Do Defi Research
There are several ways to do research on decentralized finance (DeFi) projects and protocols. Here are a few steps you can take to get started:
Familiarize yourself with the basics of DeFi: Understand what DeFi is, how it works, and the different types of DeFi protocols and applications. You can start by reading introductory articles and whitepapers on the subject.
Understand the different DeFi building blocks: Familiarize yourself with the different components of DeFi, such as smart contracts, decentralized exchanges (DEXs), stablecoins, and yield farming.
Get a broad overview of the DeFi ecosystem: Look at DeFi marketplaces, trackers and indexing platforms like DeFi Pulse, Defi Llama, DeFi Rate, and CoinGecko, to get an idea of the size and composition of the DeFi ecosystem.
Research specific projects and protocols: Once you have a general understanding of the DeFi ecosystem, you can begin researching specific projects and protocols. Look at their whitepapers, website, and social media channels to get a better understanding of the project's goals, features, and technology.
Check the metrics and evaluation: Look into the metrics of the projects, like tokenomics, user/tx volume, liquidity, social metrics and developer activity. You can use platforms like DeFi Llama or Defi Rate or even use the block explorer to check the project's on-chain transaction and smart contract activity.
Analyze the team and its advisors : Evaluate the team and the advisors behind the project to determine whether they have the necessary expertise and experience to execute on their vision.
Follow the community: Follow the community around the projects, join the project's telegram, discord, twitter etc. to stay updated with the latest development and sentiment around the project.
Check the legal and regulatory standing : DeFi projects are still new and evolving, and regulatory clarity is still developing. Make sure to check the regulatory standing of the project and check if it's compliant with the laws of your jurisdiction.
Remember, DeFi projects are highly speculative and risky. It's important to conduct thorough research and analysis before making any investment decisions.
The first step in the road to earning passive income from defi is by doing your research.
Here, you would need to look at both past and present data to make a judgment call on future directions of the defi project.
This information can be gathered from the projects White Papers, Tokenomics, Projects documents, Roadmap, Social media channels, Use Cases etc.
After doing your research, you can then decide to start investing in Defi.
1◾️ Trade, Hold & Earn
This is the easiest way to make money from defi.
To begin
Your research should give you some information regarding the project. Find projects with:
Low Market Cap Tokens
Trending Ecosystem
Example: $20k-$200k Market Cap + Fantom or Arbitrum ecosystem
2.◾️ Staking What You Buy
This is a profitable strategy only if you’re not strapped for cash
A.K.A Long Term
The returns range from 10%-50% yearly
Examples: Stake GMX & earn 13% yearly
3◾️Swap On Exchanges
The profitable Swapping Strategies:
Arbitrage: When you benefit off a difference in price on different exchanges
Price on dydx(exchange) for $XYZ is $5
Price on Binance is $5.7
You buy $100 worth at $5
Sell on Binance at $5.7
Make 14% profits
How To Trade Degen Low Cap Projects
Degen (short for "degenerate") trading refers to a style of trading that is characterized by high-risk, high-reward strategies and a focus on quick profits. This type of trading is often associated with the decentralized finance (DeFi) and cryptocurrency markets, where high volatility and new opportunities for arbitrage can make for fast-moving and lucrative trades.
Some examples of Degen trading strategies include:
Scalping: This involves making a large number of trades with small profits, in a short time frame, typically within a day. It's a strategy that require high trading frequency and ability to react quickly to market fluctuations.
Yield farming: This is a form of liquidity provision in which users provide liquidity to a pool of assets, and in return, they receive a share of the rewards generated by the pool. This strategy aims to take advantage of high APYs offered by different liquidity pools.
Arbitrage: This involves taking advantage of price differences between different exchanges or platforms, buying assets where they are undervalued and selling them where they are overvalued for a profit.
Leveraged trading: Using leverage to amplify the potential returns of a trade. This can work both ways, and a small movement in the opposite direction can result in heavy losses.
It's important to note that these strategies can be quite risky, and it's possible to lose money quickly if you don't have the necessary knowledge, skills, and risk management strategies. It's always recommended to diversify your portfolio and not to put all your eggs in one basket.
If you're interested in Degen trading, make sure you have a solid understanding of the risks involved, and consider starting with a small amount of capital that you can afford to lose.
To protect yourself from rug pulls, it's important to do your own research and due diligence when considering investing in a DeFi project. Some tips include:
Checking the project's code and smart contract on Github and other platforms to verify that it is open-source and has been audited by a reputable third party.
Reviewing the project's tokenomics, such as the distribution of tokens and the use of any locked or vesting mechanisms to ensure that the project's creators do not have too much control over the project's liquidity.
Keeping an eye on the project's social media and community channels to see if there are any red flags or warning signs that the project may be at risk of a rug pull.
Furthermore, some projects have implemented a feature called "Emergency shutdown" or "emergency pause" which allows the community or the team to quickly stop all the transactions if something suspicious or a malicious act happens.
Also, it's important to note that a decentralized finance ecosystem is still an experimental field and it's prone to failure, bugs and malicious actors. So, it's important to invest only what you can afford to lose.