Before continuing with the article, I want to clarify for you, who reads me, what DYOR should do before diving into the suggestive waters of decentralized finance. Here, I only want to tell you about my short-lived experience with my modest trial investment.
I will ignore the steps that you must previously perform to operate on SmartBCH. First, opening a wallet in Metamask, the configuration to deposit funds in SEP20, and thus be able to invest in the DEX of your choice. I think, in read.cash, there are excellent tutorials on this.
You noticed, from the start, some terms and acronyms abound in the slang of cryptos that you must handle, at least, to be aware of where you are.
I don't know about you! At first, I thought they were speaking to me in a complicated, alien language. Nothing could be further from the truth, if only if you do the corresponding DYOR.
After reading briefly, let me tell you! Very briefly, some good articles. I added funds in the Metamask wallet on the SmartBCH network through the newly created Wagon.Cash bridge between BCH and the sidechain.
Until then, everything seemed simple, but when I wanted to enter an option to get the extravagant rate of return, APR or APY, I had my first stumbling block.
The first thing I did, was to acquire the token of the DEX with the total of BCH involved. Oops! First error.
Imagine my face of frustration when I wanted to enter a Farm and couldn't. If I had researched how token pairs work earlier, I wouldn't feel such an idiot today. Well, idiocy abounds, and one does not escape it. LOL.
I even entered the comment thread of one of the excellent articles on @Pantera to ask for help. How could he help me! He is not to blame for my lack of DYOR. Cognitive dissonance on my part that blocked effective communication.
However, I did not give up on my effort. The greed to bite into the triple-digit APR was the incentive to enter the manual pool without knowing in depth what he was doing. After all, you bet what you allow yourself to lose. What silly advice!
It is one thing to knowingly; Take risks, and another is to blindly enter a cave in the bay, following songs of sirens.
Yes, now, after hitting the ignorance, my modest investment entered the pool, more like a gamble in a casino than a well-thought-out investment.
So, if you want to participate in DEFI at SmartBCH and collaborate with the growth of the Bitcoin Cash ecosystem, I recommend you not to follow my example.
Well, in short, if it suits you to know and handle the basics. So, you should investigate:
How does the liquidity pool operates?
What is a liquidity prover (LP) and what it is for?
How to enter farming (contribution of a pair of tokens to the liquidity pool with symmetric monetization to obtain the reward to enter the modality)?
What are pools or stakes?
What is the impermanent loss (currency risk), and how to manage it?
Among others aspects, and to name just ones. Moreover, learning to distinguish between ROI, APR, APY, and how these are related on the DEFI.
Finances are not as complex as they paint it, but they require on your part that you pay due attention to them if you do not want to lose your money in the attempt.
By the way, after three weeks, my investment lost about 60% of its value. Sure, now I have more chips but with a lower price (volatility). Although I am not concerned, my bet is not short-term.
An original article by @Jnavedan