Saturday, April 17, 2021

Thoughts about people joining in Crypto now

First off, probably you want to slow down.

If you're only interested because of recent news and seeing the recent gains, you're literally the retail speculator that everyone is waiting for to come, so that we can dump on you as you buy the top.


But say you're brainwashed into the magic scarce internet bean money meme and you think it's going to change the world,

You should probably slowly dip your toes in, rather than dive in on the deep end.


Personally, I always tell people interested in crypto to start with USD stablecoin lending. Plenty of CeFi platforms to lend your crypto.

A big big big point to know is that you must *KNOW* that the platform is actually lending it out. If not, how do they pay the interests?

A few scamming projects will promise yield and interests, but strangely, they have no borrow demand at all. Hmmm. 

If you can't even borrow from them, then who is actually borrowing from them?

Lending only, but no borrowing? 

LOL. You stupid is it?

Avoid.


Once you're familiar with CeFi stablecoin lending and understand the environment better, especially regarding addresses, transferring, block explorers, fiat on and off ramps and the general overview of the infrastructure, you can start getting a bit dirtier.

Withdraw out some funds to an actual Web3 wallet and mess around with yield farming. There's several ecosystems to do this. This is how you can get access to the higher risk premia of defi yield farming.

Why?

Because there is no customer support. 

No insurance. 

No guarantees.

You are completely solo and on your own.

You mess up and sent your money to a wrong address? BOOM. GONE FOREVER.

You mess up and call the wrong function? BOOM. GONE FOREVER.

There's so many attack vectors and possibilities for things to end badly.

So this is why the "yield" is much higher than the centralized platforms.

No guts no glory.

No brain same story.


An alternative route to defi farming is basis trading. This would suit people from tradfi with financial background, and is probably simpler to execute while still being a very high return strategy.


And if defi farming and basis trading to earn 40%+ yield is not enough for you, then I guess you can probably upgrade yourself out of the basic delta neutral strategies and actually start speculating in tokens.


However, I prefer to start people off and send them down a path of easy winning, and then they can branch out to "harder" stuff once they understand the entire space a lot more deeply and have familiarized themselves with the landscape and environment.


That said, I think because it is the bull market now, too many people are too greedy and too impatient and want to have the insane sick gainz NOW.


Speaking from experience, I think that crypto is a long term survival game, not a quick get-rich one-and-done, once-in-a-lifetime opportunity sort of deal.


If you think crypto is just a passing fad (like the previous times lmao), then all I can say is 

Have fun staying poor.

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