There is no doubt that this round of bull market was triggered by DeFi. To a certain extent, the outbreak of DeFi is also inevitable. After all, blockchain technology and finance are naturally related, and even Bitcoin was born in at the time of the financial crisis.
Unlike previous rounds of bull markets.Before this round of bull market, the cryptocurrency industry was basically in a pure hype stage with no practical application, although this round There is still hype in the bull market, but many real applications have been born. For example, in the Ethereum ecosystem, classic DeFi applications such as Uniswap, Compound, AAVE, and Synthetix have been born.
Ethereum is the birthplace and testing ground of DeFi, and then quickly spread to other public chains. For example, in the DeFi subdivision track, DEX has greatly changed the way we conduct cryptocurrency transactions and is more in line with the decentralized spirit of the blockchain. DEX is constantly eroding the market share of centralized exchanges; decentralized lending , Machine gun pools, etc. can activate the cryptocurrency we already have in our hands and increase the utilization of tokens; while synthetic asset agreements, derivatives agreements, etc. can bring traditional high-quality financial assets into the DeFi world, expand the scope of our investment targets, and promote The integration of DeFi and centralized finance, the explosion of DeFi has accelerated the application of blockchain technology.
DeFi is by far the most influential and influential application track for the industry in the history of blockchain and cryptocurrency technology development. , DeFi industry innovation is still ongoing, especially the DeFi innovation on the Ethereum public chain is constantly emerging.
In short, due to the financial attributes of blockchain technology and the continuous innovation of DeFi track, the DeFi boom will not pass quickly. Therefore, there are still many opportunities in DeFi.
The global economic downturn, coupled with the impact of the new epidemic, people’s lives are not easy. In order to stimulate the economy, some countries continue to print fiat currencies, which further dilutes the redemption power of fiat currencies in people’s hands, especially in some African countries , The inflation rate is extremely high, which exacerbates people's poverty.
However, the wave of cryptocurrency bull market detonated by DeFi since last year has provided us with a lot of opportunities. Not only can we hold high-quality large currencies such as BTC and ETH, we can easily beat the inflation rate and enjoy the Ten times the income, and the explosive DeFi track also contains a lot of money-making opportunities.
My DeFi experience
The experiences I share below are all my personal experiences, and I hope to inspire you.
Arbitrage between Swap and centralized exchanges
With the outbreak of DeFi, there are more and more DEXs based on the AMM model. Basically every public chain has its own Swap exchange. As we all know, CEX adopts the order book model, which means that both buyers and sellers need For pending order transactions, the pending orders of both buyers and sellers constitute an order book. The system completes the matching of orders between the buyer and the seller. The counterparty of the transaction is another user, while the Swap type DEX adopts the AMM (automatic market maker) model. Its counterparty is a machine, that is, a fund pool. It is different from the order book model. Swap is a human-machine transaction. As long as you specify a trading pair and give the number of transactions, the fund pool will automatically give a quote.
It is precisely because of the different modes adopted between CEX and Swap that there is room for arbitrage between CEX and the Swap capital pool.
Make full use of borrowing and increase the amount of available funds
In this bull market, the decentralized lending segmentation track has also exploded. Not only has the tokens of the decentralized lending platform skyrocketed, but the volume of lending business has indeed risen sharply, and decentralized lending business has become the cryptocurrency holders just need, and many users are borrowing to increase the number of tokens they can use, thereby increasing their income.
Therefore, with the popularity of DeFi, the decentralized lending track has been very perfect. We need to change our concept. We don’t have to purchase to increase the number of tokens in our hands. We can use borrowing to activate the existing tokens. Currency, through borrowing to increase the number of tokens that can be used in their hands, borrowing is equivalent to a leverage tool, it can amplify our income.
Use synthetic assets to buy US stocks such as Tesla
As we all know, the DeFi subdivision track synthesis asset protocol can synthesize traditional financial assets into currency assets. For example, stocks, gold, silver, etc. can be synthesized into currency assets, and then we can purchase traditional financial assets through digital currency. It is very convenient, and for our currency circle users, it expands the scope of investment targets.
Moreover, due to the influence of policies and other reasons, some traditional financial assets often have national boundaries, and users in other countries cannot easily trade. However, many restrictions can be avoided by purchasing synthetic asset forms of native assets through the Synthetic Asset Agreement.
Through the Synthetic Asset Agreement, these traditional financial assets can be turned into global digital assets. By trading these synthetic assets in the form of financial assets, you can achieve profits.
Through the Synthetic Asset Agreement, I have traded Tesla and other U.S. stock assets. Compared with the high volatility of currency assets, these U.S. stock assets are relatively more stable and less risky. After all, there is a real reality behind these U.S. stocks. Supported by the cash flow. It is very convenient to invest in high-quality U.S. stocks through a synthetic asset platform.
Use of off-market leverage
Many traders know that the price of crypto fluctuates sharply. If leverage is added, the risk will increase by several orders of magnitude. I am a risk-averse cryptocurrency investor, and I was lost to over tens of thousands of dollars when I first entered the market. Therefore, using high leverage to make money, more than 90% of people may end up losing money, only a very small number of people earn handsome amount of money.
Although DeFi is very hot at the moment, it is foreseeable that once the bear market comes, many DeFi coins will plummet or even return to zero. We must be psychologically prepared. Therefore, while conducting DeFi mining, we must pay attention to risks. If your hands are full of DeFi coins, you may not be able to sleep well at night, but the necessary BTC, ETH, etc. as the gold coins will allow us to live longer.
In short, DeFi is still developing wildly, various DeFi innovations are still going on, and more opportunities are emerging in this industry. In terms of mentality, we must be prepared for long-term investment. In terms of action, we must learn more and study more.
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