DeFi

Traditionally, the old financial system was plagued with problems from Frank Abagnale bouncing checks around the continental United States to orchestrated monopolies and pre-planned bank failures and complex lingo. What we can do is give centralized control over to the users, we can give access to everyone cheaply, we can ensure all processes are done efficiently without wasting money on overheard, and like Lego blocks we can have interoperation between platforms and give transparency to all involved. We can remove cryptocurrencies volatility and replace it with a no-default system with predictable income payments and we can insure you profit regardless of the market. We can help you invest in anything. This is how we will rival the old centralized system, and this is how we will create a new day for America, the earth, and the dollar.

Technically, back in the day the economy was controlled by the interest rate. Today with DeFi, the users can set the interest rate. We will fight the “public debt, private profit” motif and give government and corporate dollars and profit to the people. We will destroy insider trading with open Smart Contracts and DeFi protocols that get everyone ahead of the curve, and provide transparency. We will give inflation to the users and not to the rich and we will work on every glitch with GitHub and other wiki pages. So let us begin with what the revolution can do for you.

First, the central system once upon a time would quote every seller and every buyer a slightly different price. The seller might get a cent more and the buyer a cent less and between these two prices the centralized system would make a profit. This is known as the spread and a juicy bonus for the centralized banks. Now we have turned around, giving this centralized systems profit over to the people in an Automated Market Maker. That is where transparent Smart Contracts set the price, instead of an overlord! Anyone can participate and create their own token pair. If you want to read about Automated Market Makers, and how to swap anything for anything go to our Tokens page. Now, let us begin with MakerDAO.

Summer.Fi and MakerDAO.

Originally MakerDAO, the new Summer.fi ecosystem includes AAVE, Ajna, Maker, Spark and Morpho. They use DAI as a unifying currency that can plug into many platforms at a 1-1 ratio with USD. They also have MKR as the MakerDAO governance token, it sets interest rates and internal factors and can be used to generate revenue. Thus, responsibility lies with the holders. To access these services all you need is a wallet, there is no exclusive list or KYC, and as long as Ethereum exists so will these protocols. To begin you need a proxy to initialize your account that requires a little bit of gas so your many moves can be traced to one account, for simplicity, this is done at the start. After that all swaps require a 0.2% fee.

What we can do is let you protect your longevity with a crypto loan. If you have the opinion that your crypto will grow and don’t want to sell out now, you have a clever option. You can get a loan of DAI from MakerDAO for your crypto holdings and then pay it back and hopefully your crypto holdings go way up next year! You can also lock-in your crypto holdings to get more different coveted tokens from another protocol like on Ajna. This could also be used to get access to LP tokens or special new token offerings. We can additionally facilitate arbitrage trading opportunities between protocols where a spread is made. If you find a higher yield rate and a lower borrow rate between two protocols an opportunity clearly exists for you. Additionally, you can use your current token holdings to swap into a hotter favored coin. One also has the ability to double down on their preferred coin. This is called multiplying. To do it you deposit your main coin say ETH and in turn get a loan of DAI. Then use that DAI to purchase more ETH and so on getting you access to a multiplication factor. This can be done in bear markets buying the dip or on bull runs as the market takes off. You can also predict downturns by shorting. All you have to do is reverse the idea. Instead of putting in ETH to get DAI, you put in DAI and get ETH. You will owe the ETH but if its value goes down repaying it becomes simple and cheap and you can keep the difference! We can also automate trading to avoid liquidations.

To be successful you must know about liquidation. Liquidation is where the market moves against you, and you do not take the time to add more collateral or repay your debt. You pay a 4.5% fee in Ajna and have your collateral sold at an auction to cover the debt. It is performed by keepers who post bonds to ensure they are properly finding liquidations. If the program can’t recover enough funds via the auctions they put the debt to the “Maker Buffer” where MKR tokens are sold for DAI to resupply the system.

DeFi is about lending, borrowing, and exploring. In MakerDAO you can mint DAI by depositing collateral, this creates a vault. When it comes to lending or generating DAI the platform has the stability fee, it is interest on DAI and is required to be paid to close a vault. It can only be paid in DAI or MKR and is set by the community. The Dai savings rate is where DAI holders receive a share of MakerDAO revenue and is a portion of the stability fee. This is just like banks giving interest to depositors, in this case the borrowers pay the stability fee to the lenders.

To begin you have options and can always profit. It starts with you using MakerDAO to get a loan in DAI and thus creates a vault. Let us say you put in one (Wrapped BTC) WBTC valued at 20,000 in DAI. Because of the volatile nature of crypto currencies, you will have to have a smaller loan to this value as there must be some room for fluctuations. Thus, you will get 18,000 DAI. This is your loan to value formula.

It is Loan Amount / Crypto Value. In this case we have 18,000 / 20,000. This is an insane 90%. If the price of the Crypto Value (WBTC) falls say from 20,000 to 19,000 we have 18,000 / 19,000 or a more insane 94%, the higher this ratio goes the more likely you are to face liquidation! If the market price of WBTC is 20,000 you will always have the opportunity for it to be lent at below that market price as you would have to be insane to take out a loan where the accepted value is higher than what you are paying!

Another way to look at the same problem is through the Collateralization Ratio formula. It is the exact opposite as above. It is Crypto Value / Loan Amount. In this case it is 20,000 / 18,000 or 1.11 Times or 111%. Most Collateralization Ratios are around 1.5X or 150%. If this goes down toward 100% too much you may be liquidated. A 150% Collateralization Ratio is a 66% Loan to Value Ratio as you simply reverse the formula or go 1 / x on your calculator. If you know the Crypto Value you can rearrange the formula and divide it by the Collateralization Factor to get your Maximum Loan Amount. The Crypto Value is 20,000 / 1.5 Collateralization Factor to get your loan of 13,333 DAI. Now the fun begins.

So, one WBTC is 20,000. With a Collateralization Factor (CF) of 150% or 1.5 Times you can mint 20,000 / 1.5 or 13,333 DAI.

To start we will look at price changes with simplicity. Where USDC is a 1:1 Dollar Stable Coin.

So, what can you do? You can always profit and you can bet on a rise. You can adjust your position by adding more collateral or repaying debt. If the price goes up you can withdraw collateral or generate DAI. You can increase your multiple and you can always close your vault. You must also consider your Collateralization Factor; in this case it is 1.5 but a wise trader would trade DAI amounts below this to allow for market swings against your position. Use 1.6 if you want to feel more safe!

There are other ways Crypto always wins, let us look at some of them now.

Within the MakerDAO system we can post bids for our lending and borrowing prices. For example, little Timmy wants to lend you 1 WBTC at 18,000 and Jimmy wants to buy at 19,000. The old system would buy at 18,000 sell at 19,000 and make a spread. They do this secretly! Now, we are directing the process to be done peer-to-peer to reduce spreads and direct the middlemen to the average Joe. Let us do this with simplicity.

If WBTC is trading at 20,000 one would have to lend below that. Say we lend at 19,000. This is very nice. Jimmy says for 1 WBTC I will give you 19,000. Tom says for 20,000 I will give you 1 WBTC. We have an impasse. Instead of a spread being made the trade can be left up to us! If WBTC goes to 18,000 I buy it and give 1 BTC to Jimmy and he gives me 19,000 for a 1,000 profit. If WBTC goes to 22,000 I give 20,000 to Tom and get 1 BTC I sell for 22,000 for 2,000 in profits. The system has 1 WBTC given by Tom and 19,000 given by Jimmy. You can also reverse the role of the tokens. In the event WBTC goes to 22,000 Jimmys contract may not be fulfilled. There could be someone on the other side of the transaction or his 19,000 can be put into another protocol to earn more and return it to him or the pool. Now, what about the supplier? In this case he may have lost on a trading opportunity, so what do we do? Because time is money, we give out high interest rates and Liquidity Pool tokens. These can earn a percent return from the platform and can be traded to offset losses by those who supply liquidity to our Smart Contracts and platform! This is called peer-to-pool. In Ajna you can borrow and lend and also use Ajna aTokens to cover your potential losses and exposure. aTokens represent your stake in the network and are only given if your deposits are utilized in the Active Range. What one must consider is the fact your Threshold Price (TP) must be Less Than the Lowest Utilized Price to be in the Active Range. Threshold Price is = Collateral / Debt. So, the Collateral value will be the same as we are dealing with the same item so for simplicity we will say it is 100. The Debt is what is owed or in other words how much you lent the collateral for. Let us say that is 90. Your TP is 100 / 90 = 1.11, let us say the Lowest Utilized price is 80, thus 100 / 80 = 1.25 thus you are fine! You are lending at 90 and the worst lender is lending at 80 being the Lowest Utilization Price. You want to lend high, and borrowers know the lower we lend at the harder it is for the price to go below that to be profitable to buy below and sell to. Thus, a balance needs to be struck and usually is. So, if you do the math and stay above the Lowest Utilization Price you will be able to trade and be in the required liquidity, that is close to equilibrium.

The problem here is if prices in the market go below what you are lending at you will be guaranteed to hold collateral tokens. The price of WBTC is 20,000 you lend at 19,000 to be competitive to yourself. You will give 19,000 for a WBTC, this is wise. If the market price falls to 14,000 people will buy WBTC on the open market and put it to you at 19,000. Thus, you are left with a lot of the collateral token WBTC. Hopefully, these losses can be offset by new DeFi lending strategies and tokens from the platform. This problem does not exist in an Automated Market Maker system. Here in DeFi you set the price, with an AMM that price is set by a Smart Contract, being X times Y = K your constant you trade against. You can still profit regardless of price movements and have crypto be king, but as you trade in one direction it becomes more expensive to do so and thus prices reach an equilibrium, and you are not left with only collateral tokens! Some AMM algorithmically rebalance. Thus, a balance needs to be struck and usually is. So, borrowers don’t want a low price as the price needs to move below that to be profitable for them, and lenders don’t want a low price as they may not be in the Active Liquidity thus a balance is found by setting our lending amount close to the equilibrium and above the Lowest Utilized Price.

Since the advent of the Ethereum switch from Proof-of-Work to Proof-of-Stake many miners are out of the game as one needs 32 ETH to mine on the Poof-of-Stake system. Miners now stand to make 15% ETH on their staked position. However, through Lido and stETH (for staked ETH) one can deposit ETH get stETH and still accrue mining fees! If we can attain ETH at a discount as mentioned above with WBTC you can instantly make a spread turning ETH to stETH at a 1:1 ratio. Then we use the stETH to both earn mining fees and it can be simultaneously put into other protocols. The mining fees will be less than that of regular ETH as only some ETH nodes are efficient, and others are just beginning mining while others are just coming online or going offline and being transferred back into ETH. We can plug stETH into ETH to continue our multiplying strategy to earn more stETH mining rewards. We can use stETH to trade for other tokens on DEX (Decentralized Exchanges) and AMM (Automated Market Makers) and we can use stETH to add liquidity to liquidity pools and earn new tokens. You can also lend stETH to a friend. So, we make money in 3 ways, we pay less for our ETH and immediately turn it into stETH at a 1:1 rate. We then accrue mining fees for our stETH. Finally, we can take our stETH and use it in DeFi protocols to lend, earn, multiply or trade to increase our earnings. Then everything is reversed and we go back to our original position leaving our interest remaining.

You may be wondering how prices are known throughout the MakerDAO system. It is a nitty gritty detail known as an Oracle. The Oracle price feeds use ChainLink to link into volatile crypto markets and then give you the advantage of knowing the Next Price. The Next Price is one hour away so you can react. Thus, you can smooth out the rough seas of cryptocurrency volatility and stay in touch with that same old manta: time is money. If you do not react quick enough your account may be liquidated.

Compound.

Compound Finance is a protocol for lending and borrowing. The protocol consists of the governance COMP token and the cTokens for representing the underlying assets. cTokens are ERC-20 tokens and as such can plug into other DiFi protocols. Their exchange rate always grows so to switch in and switch out of them you need to provide more of the underlying token as time goes on, this acts as interest. The interest and liquidity in each pool is governed by solid yet simple supply and demand. In smaller liquidity interest is increased to lenders to incentivize growth, in larger pools borrowing is facilitated with lower interest rates. A reserve factor is also included to insure responsibility in the face of defaults.

Interest is earned every Ethereum block of about every 15 seconds so one must act fast to get the best rates. When you lend and deposit collateral into Compound you accrue interest in the same base asset. When you borrow you put in collateral and take out another base asset as a loan and owe interest in the base asset. If the base asset increases (just like collateral decreasing) in value you may be liquidated so you must check your loan to value balance. Again, it is 100 / a factor of 0 – 90. 0 means a token cannot be used and 90 means you’re almost at the debt ceiling.

One can also short with Compound. You put in a stable coin and get an asset like ETH, and sell the ETH, then when ETH goes down you cheaply buy it on the open market and resupply to Compound unlocking your original funds. Note, as Compound nears full utilization there is a kink in the interest rates whereby users will earn predictably much more interest. So, you put in a stable coin, short your ETH and then earn much higher premiums when full utilization is reached. Also, given to everyone who participates in the system is the governing token COMP in a tune of 2,880 a day to be shared among users. Liquidation is set based on each token and interest is accumulated fast, compounding and based on simple mathematical supply and demand. If you want to band together you can use pooltogether where all locked interest is given to one lucky winner and then the rest is redistributed to everyone else participating leaving a no loss lottery system for the lucky. Also notice there are no fees for Compound unless you are liquidated. The Interest rate floats based on supply and demand and can become super charged, and users can choose the length of their position and get in and out at will, while leveraging their crypto into other different protocols. So, Compound caters to players who want to activate their lazy crypto in the AAVE, BAT, COMP, DAI, ETH, FEI, LINK, MKR, REP, SAI, SUSHI, TUSD, UNI, USDC, USDT, WBTC, YFI, and ZRX markets.

As interest happens every Ethereum block and the huge kinks are on the horizon you want to get in fast, switch around your crypto holdings then cash out! There is a learning curve for new users and gas must always be paid but as long as Ethereum is around so too will be Compound!

UniSwap / PancakeSwap.

Uniswap and PancakeSwap are Automated Market Makers using Smart Contracts to facilitate trading. They let you put in two tokens and create a token pair. If the value of token A falls you can buy it on the open market and put it to the protocol higher. If the value of token A rises you can buy it from the Smart Contract and sell it on the open market for more. You also earn LP (Liquidity Pool) tokens for supplying your dear assets. Thus, you can always profit, and the market is but a tool. These platforms are covered in depth on the Tokens page. PancakeSwap also provides perpetual contracts with insane leverage.

dYdX.

dYdX is a cumulation of all that came before it, to see where the dYdX name came from go to our Tokens page! dYdX facilitates flash loans, margin trading and futures. dYdX has its own blockchain called Cosmos and this results in lower fees, these fees are given to stakers and validators. As its own blockchain front running is minimized by this platform. This is because orders are first off-chain then sealed on the blockchain as they happen. If you want to get ahead of the curve you will have to do some math and invest. Because dYdX supports transparency and decentralization you must understand you are working with a non-custodial and self-responsible system. Thus, you maintain control of your own funds and must put them to work! The work can minimize your losses as transactions are not published until finalized and all transactions are fully complete or not at all, this gives one the ability to succeed or cancel an order on the fly before it is complete! The platform works by matching buy and sell orders with extra purchasing power. The question is “is this sustainable” the answer is not always. Although dYdX offers a plethora of tokens for your trading and can plug in with any ETH exchange, it is recalling its Canadian clients. It also uses flash loans to get user access to credit with limited downside.

A flash loan gets one quick access to capital, to use in an arbitrage opportunity. The catch is that the funds must be repaid in the same transaction. If you spot a difference in prices from one platform to another you can quickly raise a flash loan and take an item from one exchange and turn around and sell it on another. Flash loans cater to the clever and to the unbanked. Because there is no credit check you must just check the market. Anyone can participate and the ideal can be used to drive prices back into parity. dYdX also uses futures and margin trading to take a load off your back and transfer it to the market.

dYdX has futures and options. Futures are different from options as an option has a premium and it can expire. Futures have no up-front fees. However, futures last forever and can result in the wiping out of all your initial collateral investment. Thus, it is wise to only allocate a certain percentage of your portfolio, around 20%, to futures contracts. We will now explore futures and margin trading where by one can multiply their leverage and invest in a market upturn or downturn with more confidence.

Margin means to borrow or to increase, and with dYdX it is exchanged between users peer-to-peer and over a very large network. On the protocol you can predict and profit from a downturn with a short sale.

Additionally, all Synths are put into a collective debt pool, thus profits and losses are shared amongst users. This can hedge against risk and get one access to the wider market, bringing the platform users together as they trade together. Thus, two things happen at once, your sAPPL can fluctuate and so can the value of SNX. However, even through fluctuations, most users swear it is only going to get better! In a bull market both SNX and the underlying synths should grow. In a bear market we can bet on new unicorn synths and use SNXs’ rarity to drive the price back up, as well as its requirement to be bought to avoid liquidation. As an example, if half of the pool is sETH and the value of sETH doubles then the whole pools wealth increases by half. Because we are working peer-to-pool, and with Perps, liquidity is almost always there as the Smart Contract works for you and all liquidity is fungible and can be broken down into component parts and shared. You can be rewarded with SNX and trading fees if you participate in the system.

The system is facilitated by oracles that track the value of the underlying synths. Then one must burn their sTokens to unlock their original SNX and repeat the process. Because of the many options in the market this should be done fast so you can switch into new synths. Governing structures do exist for the longevity of the protocol, but today we would call it the wild wild west of development with many interfaces using the same underlying technology. It is about the network and the network only plans to grow. Gurus can trade on Synthetix as well as everyday people by simply diversifying their holdings into a synth that is tracked with an oracle. This is for the rebels who find cryptocurrency more active than the market and cheaper to use and easier to profit with!

You don’t have to spend a lot; you should just diversify a lot. You have a diversity of options to trade, and you must understand liquidation!

As all synths are pooled and traded through a Smart Contract there is no counterparty and thus no chance for default, the only default there can be is from yourself. The counterparty is considered the protocol and the smart contract, thus there does not need to be a prefect balance between longs and shorts, or buy and sell signals. As usual you should check the market and make sure your trades are grounded with sound reasoning to avoid liquidation. You want to avoid liquidation as it comes with a very high penalty in Synthetix. We suppose this works for liquidators. What you want to do is switch out of unprofitable synths, carry on trading, with Synthetix value continuing to increase, getting you more diversified synths! Imagine the ability to tokenize anything, grow with the community, and have an oracle track it. If you business is not in tokens it could be a smart contract and divvy up the pie!

Also, there is a little secret where by one can check the stock and flow of SNX to see the future of the protocol and if people are selling, or holding and minting! This gives you insight into Synthetics current nature. Tomorrow you may be able to tokenize anything, and profit alongside the protocol.

Synthetix has no slippage or liquidity problems so it should be a responsible answer to DeFi’s search for efficiency and success. There are low fees and the user interface and experience is great. In the beginning it was only clearing houses and boards of exchange that created synthetic derivatives, now anyone can! If we remember this is due to cryptocurrencies decentralized and connected architecture and its commitment to create something new. You can turn dollars into synths, you can turn oil futures into synths, and all we have to do is track it, believe, and invest. You can learn more here. We will now explore the SetProtocol.

SetProrocol

SetProtocol is an interesting development in the world of cryptocurrencies. For those who think the world is too complex SetProtocol brings you back to earth and introduces simple social trading. You do not have to waste time buying the underlying collateral you can leave it up to the protocol, it will automatically go through the hoops to acquire and balance every portfolio for you. Thus, SetProtocol combines ratios of different, exchangeable, underlying assets into a basket similar to an EFT. As such it is 100% collateralized and able to spread the risk around the market and within special unique market segments like Yield Farming and Perpetuals. It gets you access to Guru traders and provides low fees and gas efficiency. It can let you quickly enter the market with a wide net spread among many market segments giving you exposure to several tokens in the basket with one move. There is no need to get the underlying tokens as it is all managed by the Smart Contract creating the Set. You can work with your favorite Sets and traders such as the metaverse set, DeFi lending, or Sets including Liquidity Pool mining or focusing on new LP token airdrops. Thus, you can create a diversified portfolio and follow the leader and market trends without wasting time.

First, you exchange ETH for the Set Token that controls and represents the underlying assets. As it performs tokens will be rebalanced with sound math and will stretch across diverse exchanges and link them back to one simple token. This is a custom design for the user and decentralized philosophy in nature. You first spend your ETH, then you get the Set Token, its contents can fluctuate, and you can redeem as you then switch back with any profit or loss realized in your initial holdings. If you already hold the underlying assets all that is required of you is to bundle them together, sell them as a Set and collect a fee as a manager and promote it on your social media!

Each Set is held in a special Smart Contract pool and is fully redeemable for its underlying collateral at any time. One should be aware the collateral can be held in two places at once, on the exchange it is utilized on, and in the Smart Contract of the Set. Thus, your tokens can in some cases be locked into a protocol and can fly free as you can redeem them at will! You can always look up the contents of your Set and see it be rebalanced in real time. This caters to sustainability and diversity while playing by the rules, providing transparency and decentralizing trading. Truly, we believe eventually, Sets will be popular and everywhere!

As an ERC 20 token that can plug into any DeFi protocol, as it is supported by 100% collateralized underlying assets, Sets have a lot of potential. Many find they have a better experience with Token Sets as they can leave the management up to the token Set Creator. This manager can update the position and rebalance the portfolio. You can trust someone else’s wealth of knowledge and experience. Plus, the protocol is supported by a number of oracles and uses time-based fees to reward the Set Creator with a variable streaming fee over time from the Sets proceeds ensuring longevity of your investments and a true commitment from the Sets Creator. Initially, every Set has its parameters, description and contents along with a Manager and a Tracker. After that it is rebalanced and updated. It is always redeemable and can be shared and easily transferred. It has small fees and is the responsibility of the creator, the buyer and SetProtocol to manage. SetProtocol caters to the users and provides privileged functionality to edit the position, mint tokens, grow them and redeem them. This social trading can help onboard users to the crypto sphere easily, and give sustainability and diversity to the wild west of the crypto market!

WBTC?

Some may be wondering what Wrapped BTC is. As BTC is the largest, oldest and most popular cryptocurrency it has to be used in other protocols. Wrapped BTC or WBTC takes your regular Bitcoin and deploys it on the Ethereum blockchain. It enjoys going the centralized way as it must always be audited with AML/KYC requirements and then transferred from users, to merchants to custodians and back again. Once on the Ethereum blockchain it can be dispersed into many DeFi protocols and traded as any ERC 20 token would be. There is a governance body and some inherent risks. There is Smart Contract risk, but that has thus far has been battle tested. There is market risk where, when retransferring your Bitcoin, the market moved against you, so you must cast a wide net and diversify your token holdings. There is also regulatory risk and the possibility of you failing the AML/KYC requirement without a proper bank account or because you live in China. There is always a learning curve, and you have the ability to take your business elsewhere. We think Wrapped BTC will flourish and is only a force for good to spread Bitcoin into the cryosphere and the cryosphere everywhere else!

JustLend

JustLend is on the TRON network, although most of what it offers has already been done, it has potential for those who hope to get in fast and early and fly with the growth of this blockchain. Users are not matched as with a traditional order book with buyers and sellers, instead all funds are put into a pool for better liquidity. All pools are algorithmically controlled with supply and demand leading to interest rates. This Smart Contract lets you redeem and supply at any time. When you supply you get jTokens that accrue interest. When you borrow you get jTokens to use as collateral for a loan and their exchange rate grows as in Compound. All of these tokens are exchangeable and all are shortable. You can put in a jToken get a TRON token, sell it and owe it later at a lower price. Then you repay your loan at will. As a Smart Contract system, you will work though the Smart Contract and will not have to do negotiation for fees and interest. Utilization and kinks are also included in the system, and it is designed to pay interest fast and per block, as in every 3 seconds. Loans are perpetual and allow you to pay or redeem or remint as you go. Interest is based on supply and demand and suppliers can redeem at any time and buyers can repay at any time. This is called convenience and carting to your user base. There is also a reserve factor to prevent defaults. Borrowers’ assets go back into the market and can be resupplied. It still is the Wild Wild West with TRON but some users see this newness as a competitive advantage and thus for some it may be the pace to be!

For those who want predictability over instability.

Curve

Curve Finance started as a novel way to swap stable coins of a similar value. With low slippage and the ability to smooth out volatility Curve provided a sanctuary for popular stable coin holders. Curve offers its own unique token CRV to users, this token brings composability as an ERC 20 token, and can plug into other platforms. As such other markets open up for deeper liquidity. By working with the program, you can see your APY (Annual Percentage Yield) along with CRV emission and your boost potential. Curve is unique as the choice is yours to save your CRV or you can lock it into veCRV for voting escrow CRV to let you vote on proposals and earn a 2.5X boost on CRV emissions. Which unlike greenhouse gas emissions, are capped at a few million a day or 65% of the total supply. Locked veCRV is spread around the system with gauges determining each pools relative share. This is different than other pools that are governed by supply and demand. CRV is governed by democracy and the amount of locked veCRV per pool. Each pool gauge gets a bonus if there is more staked there, as well as a small admin fee. When it comes to voting time your voting weight decreases as it comes closer to your selected maturity date to unlock. Thus, look for large spikes in demand as new votes are on the horizon. So, you can be conservative with your stable coins and easily switch them around and get lucky with new CRV emissions, all for a balanced trading strategy.

In the Curve Finance System, you can create pools and mint stable coins. Curve Finance, being the king of stable coins, remarkably has its own. crvUSD is a stable coin native to the Curve System. Its technology lets anyone create a pool as long as it has an oracle. A pool can have crvUSD as the Collateral, or crvUSD being the Borrowed Asset, simply put, the pool must always have crvUSD included. So, we can mint crvUSD from a Collateral such as ETH. If our ETH drops in value, Curve has a healthy alternative to liquidation. It is called Soft Liquidation where little bits of the collateral are sold for the stable coin to balance the system. Alternatively, you have the choice to resupply crvUSD without damaging your potion or your credit rating and destroying any debt! You also have the choice to supply liquidity as far as you want via bands. The more bands the more spread out your liquidity, less bands will maximize your Loan to Value Rate but will be sold faster in liquidation. What one must also consider is the system tracks the Utilization Ratio and if there is too much collateral there is a lower Utilization Rate and thus a lower APR. So, maximizing efficiency is of upmost importance to the whole protocol! Not only can the protocol help you create a pool, stave off liquidation and provide growth incentives it can also help you trade and secure a wider net of crypto holdings.

Another plus in the fast moving and disruptive Curve Finance space is the ability to swap back and forth between two or more stable coins. It is more imaginative than previous iterations and seeks to bring the market back into parity with itself, instead of continuing on a perpetual path. First, say we have a pool of 1,000 USDC and 1,000 DAI both 1:1 pegged US dollar stable coins. A trader Joe wants to add 100 more USDC so he can get out DAI. There is now more USDC than DAI. The protocol will discount all the excess USDC so arbitrageurs want to buy it. They will put in the needed DAI to get USDC. And voila our pool is back to 1:1 parity! This can go on and on earning Liquidity Providers, fees, tokens and notoriety! We can also increase the number of our underlying assets from one to three. This is known as the 3 Pool in Curve with its own LP tokes and composed of DAI, USDC and USDT. You can add in just 1 token and the protocol will convert to get exposure to all three. It is rare that there will not be use for these currencies as DAI is in the Maker system, USDC is with the centralized exchange CoinBase and Teather (USDT) has interest and uses across the internet. This is also done on the TriCrypto Pool with WBTC, ETH and USDT.

If you want to make pools, one must also be aware of the different types of pools. There are regular pools and MetaPools. MetaPools come from taking an existing pool and building upon it with a second token like a YourOwnDollar. This shields the underlying crypto pool, while being capital efficient and giving access to a new market with new trades. This can be used to get new tokens in touch with old and proven pools! It is a different approach to finance and can bring balance to volatile tokens that may also need discovery and a place to trade. Also, pools need to be ensured, so in the event of instability in the system a pegger can mint or burn crvUSD to bring the system back into alignment and destroy excess crvUSD in a pool.

Curve is quite the ecosystem with what you want in the cryosphere, a simple and easy place to shield and grow your money. If you’re into math you can do some and see how the Stable Swap LLAMMA, Lending Liquidation Automated Market Maker Algorithm works in practice when adding or removing stable coins. It is like the regular AMM with a few added designs. We will now move on to places that you can plug your Curve Finance adventures into, namely Convex and Yearn.

Convex

Convex was created by a secret organization known as c2tp. It promises to boost yields when combined with other protocols like Curve. It is called a second layer and promotes fat in the system. Convex is widely regarded as an extension of Curve and is now on new frontiers as well. CVX is the Convex token, locking it lets you essentially earn Curve Boosts as well as CVX boosts. If you put in CRV it converts it to veCRV for boosts and voting rights. It then mints you cvxCRV that can be staked for CVX or transferred at any time to CRV. Thus, you have two paths to go by, but can always change the road you are on. Convex is also working with Prisma, Frax and Fx protocol. With only 100 million tokens compared to Curves 3 billion it is imaginable a bottle neck will occur pushing up the price and resulting in more interest in CVX and more rewards per token.

Yield App

The Yield App is currently under financial troubles, however we will cover them anyway! The Yield App centers around a wealth of products and their YLD token. The more of the token you have the more opportunities to earn higher APYs (up to 15%) and of course it will get you access to the Angel Launch pad, where new blockchain endeavors are showcased. Also, Yield will repurchase some YLD as time goes on, this old strategy props up the value of the coin and ensures longevity. This is called a Buy Back. Yield also works with its own unique blockchain. This is something different the protocol has done and as of now is delivering rewards to those who choose to use the Haven1 system. This works to secure and expand the network without relying on other expensive blockchains. The Yield App is one of the musketeers for a streamlined User Interface and a plethora of products, let’s explore and earn some rewards from the Haven1 system!

Yield offers the Loyalty Program, the Earn product, the Swap Crypto product, the Buy Crypto product, the Yield Pro suite of products, the Over-The-Counter product and the Reoccurring Buy product.

Yield has its Loyalty Program where you can acquire the YLD token to activate better returns. For the simpletons out there, Yield has the Earn product where you can deposit coins to earn an interest as high as 11% for fully activated USDC. You can lock up your funds for up to a year as a Diamond Member with returns as high a 10% for Bitcoin or 15% for DAI.

The Swap Crypto product allows you to quickly exchange 20+ cryptocurrencies with 80+ dual parings. You do not have to leave the app and all trades are executed with precision and speed and very little slippage. Thus, it becomes easy to diversify your crypto holdings all from one place.

The Buy Crypto product lets you add to your holdings by buying Crypto with GBP or EUR. You can use master card or visa as well as Apple Pay and Google pay with as little as 1 EUR/GBP per transaction. There are zero fees and a simple user experience.

The Yield Pro product covers information we have already learned with a few tweaks. First is the Buy Low option. You start with your initial deposit be it fiat currency or a stable coin. Let us say that is 10,000 USDC. You then choose your interest rate (50%) an expiry date (40 Days) and a strike price less than the current price. Let us say that is 8,000 USDC when BTC is trading at 10,000 USDC. If the BTC market goes to 7,000 USDC the platform or arbitrageurs will buy BTC on the open market for 7,000 USDC and put it to you for 8,000 USDC. You would acquire 10,000 / 8,000 = 1.25 BTC plus interest! You can also set how long this will take. On the other hand, one may set the interest earned if the market goes up over your set period of time! Say you choose 50% interest and 40 days as your term. After 40 days of BTC rising you get 50% Times (40/365) or 5.47%. This is multiplied by your 10,000 for 10,547 USDC. This can be compounded if you try it again. You can also change the idea for a rise, this is called Sell High. We can have 1 BTC at 10,000 USDC. If the market goes above our strike price of 12,000 all the BTC is sold at that price for 12,000 USDC plus our 547 USDC interest for 12,547 USDC. If the market goes down, you keep your 1 BTC and earn your interest of 547 in BTC. A clever trader may set the interest to be greater than the difference between strike price and current price. A clever trader may also compound earnings quickly.

For the whales out there, Yield has the Over-The-Counter Desk. It can quickly onboard customers and get you past AMY/KYC requirements. It is for people who actually care to trade large volumes of cryptocurrency with a centralized exchange. They do offer 24/7 support and cater to traders wanting to trade or exchange in excess of $100,000 in a transaction.

For the practical and pragmatic out there, Yield has the Auto Buy product, whereby you purchase a steady amount of cryptocurrency over a given time period, every so often. It can help declutter the nature of cryptocurrency and buy in the dip and in a bull market. It is for those who don’t want or don’t have a lump sum investment and choose to smooth their investing over a given time. You also can earn interest on the holdings you already have making investing even simpler! You can always turn to Yield support and you should actively hold YLD token to promote the community and grow your income potential as a dedicated member.

Lido

Lido is a champion in the DeFi space and has uncovered, time is money and so is social trading! They allow you to transform ETH into stETH for Staked ETH at a 1:1 ratio. stETH accrues mining fees as regular ETH mining does, however to mine ETH now you must post 32 ETH and can earn 15%, this is beyond most means. Lido gives everyone access to this opportunity, by pooling resources. There is no minimum or maximum staking required and rewards are rolled out daily. Also, you do no need to lock in your stETH it can be put into other protocols like Curve, Aave and UniSwap. Your benefits are compounding so you may start with 1 ETH and turn it into 1 stETH that will accrue ETH mining fees. You can then take your 1.02 stETH and swap it back for 1.02 real ETH acquired through the mining process. You can also further wrap your stETH to wstETH as some exchanges are strict and do not promote a rebasing, increasing token, so wrapping your stETH to wstETH avoids this problem. Thus, you can get 2 levels of income, one from your stETH growth and another for letting it plug and play. A lot goes on behind the scenes to transfer and stake your ETH, and the devil is in the details, yet Lido makes it simple through their User Interface. You might find yourself using this unique value proposition to maximize your DeFi earnings and continue spreading some love through the DeFi ecosystem. So stETH is a transferable, rebasing, utility token made from ETH, however it is not without risks.

As always there is Smart Contract risk associated with any protocol. So, Lidos stETH has been battle tested and bug bounties are available. There is also a risk of low adoption due to complexity; Lido is working on this with a simple user experience and a wealth of knowledge in the community to share. Additionally, there is slashing risk. If too many validator nodes on the network are slashed for malicious behavior, the overall returns to the network will decrease as these nodes go offline. Another risk is the time it takes to withdraw from Lido, currently 1-5 days. Finally, the system also has price risk, where the peg of 1:1 is out of alignment. This did happen briefly! Due to market factors and Terras collapse. However, Lido maintains its structure and integrity. Additionally, Lido aims for more integrations across the DeFi sphere so be sure to check back in with them.

Because Lido’s stETH can be made or bought on exchanges at a 1:1 rate its price should obviously remain stable. If there is a discrepancy, people will buy low and hopefully return the system to balance, or just make some easy money! Lido seeks to grow in the DeFi space. So, what users have been doing is adopting the multiplying strategy. You can take ETH turn it into stETH, then use the stETH as collateral to get more ETH turn it into stETH and so on! You can also go to Curves stETH pool, get CRV, pool fees, and your Lido rewards! The company endeavors to gain the good favor of the people so, of course, it offers its own token LDO.

LDO is a governance token for Lido. It lets users set fees, that currently are 10% of mining rewards. This is paid to validator nodes and the Lido DAO. If Lido gains enough market adoption we can see its token value start to rise!

Instadapp

For those who like to combine many things into one like a delicious dinner, there is InstaDapp. For simplicity it has Instadapp Lite where you can easily see yields for Bitcoin, Ether, USCD and DAI. It gets better however, and one can use the Fluid platform to get liquidity and to smooth out cryptocurrency’s volatility with predictable APYs! You can also borrow and see how many funds are locked into the protocol. You can also use the InstaDapp Pro product to create new Collateralized Debt Positions and lock into new positions on Maker DAO and see the stability fee and the Liquidation Rate. InstaDapp also lets you create positions with Compound, Aaave, Uniswap, Savings Dai, Spark, Curve, Morpho Blue, and the ability to import other positions. By using organization, one has the opportunity to amplify earnings and easily see arbitrage opportunities! This can also be done on DeFi Saver too! It is not exactly a carbon copy, it simply allows you to plug in some test ETH and make a practice account! The are similarities and differences, but to set the stage the battle has both focus on simplicity and organization, but InstaDapp gets you access to liquidity you can use and DeFi Saver offers paper money accounts to do mock trading. This way you can find out the markets aren’t rigged and there is value out there. Many swear crypto has a long way to go, but we take this as a positive sentiment!

The Future

We would like to see deeper liquidity spread through all layers of the DeFi space. We predict companies like Stellar will grow stronger as they link the crypto world, with the world around it. We hope their effective method of transferring value will lead to less fees, the ability to make your own token, and onboarding ramps though out the financial landscape. We hope this will turn into use cases for the poor across the world. We hope dust levels will come down giving access to everyone young, old, rich, poor and technical and non-technical. We hope Smart Contracts will become more transparent and easily adopted in the general populous. There will be platforms where spinning up a Smart Contract can be simple. We hope the regular finance infrastructure will be challenged with programs that are cheaper, less centrally controlled, more efficient, transparent and have the ability to integrate with each other, thus granting access to anyone. Here is a birds eye view.