Hello guys, it’s great to be back again after quitting blogging last week due to some wrong crypto trades I made LoL. I wonder if we would have airplanes today if the Wright brothers did quit early after failing a number of times. Well we in Nigeria would still fly Edo Airways every night hahaha, only Nigerians can relate….
Now back to our topic. DeFi is the rave of the moment in the cryptocurrency and Blockchain industry. Any Blockchain project with DeFi added to it is being oversubscribed by investors as we speak.
Every crypto investor and trader’s dream is to buy a Lamborghini someday if they don’t own one already, but then can DeFi buy you a Lambo? I will address this question with the following points:
1. DeFi is not a get rich quick scheme:
I caught up with the DeFi hype last week and invested in my first DeFi protocols MyBit & Unicrypt. Before then I viewed DeFi as a high risk investment area for those looking to invest in the small DeFi start-ups which is actually the truth. Looking at the number of DeFi projects being added to Uniswap daily with 95% exit scamming or pulling a rug as it’s called.
Majority of self-acclaimed crypto influencers use DeFi as a get rich quick scheme. Their modus operandi are creating a group for investors on telegram, spot a DeFi project early when the market cap is still low then call this project to their members, who would go shill the project on Twitter, 4chan and Reddit immediately after buying it. Imagine when 100s of people are digging it out to buy a DeFi project with let’s say $100,000 market cap this will definitely pump the price.
They simply buy early, shill the project hard, then dump when price rises and move to the next project. With this mode of operation, they make DeFi look like other failed get rich quick crypto schemes like ICOs, IEOs, Bitconnect, PlusToken, Deflationary tokens, etc. But then DeFi is not a get rich quick scheme, please take note. We will talk more on this in our next point.
2. DeFi means Decentralized Finance:
DeFi was created to make financial products and services accessible to everyone but not controlled by anyone. DeFi stands for Decentralized Finance.
Ethereum spearheaded the creation of DeFi through Smart Contracts Technology which means agreements can be reached between two or more parties based on established conditions coded into the smart contract.
Imagine getting a loan with the interest rate, collateral and duration already coded into a smart contract. This is how Smart Contracts powers DeFi. It eliminates the need for an intermediary or central authority.
DeFi means total control and not get rich quick. A lot of people are investing in projects today with DeFi added to it just to flip it for easy gains and not for what DeFi really is.
3. DeFi can make you money:
Looking back at the exponential growth and explosion of DeFi protocols, we can confidently say DeFi can make you good money. Compound Finance for instance made massive gains in June moving from $61.25 to $381 in June 21. This means that anyone that bought let’s say 1 COMP at $61.25 was able to sell it for $381 as at June 21.
Another DeFi protocol, Aave (LEND) pulled more than 100x. Moving from a low of $0.003354 in September 2019 to hit $0.375857 as at this time last month. This means that anyone that invested $100 at around September 2019 and sold within this time last month should have turned a little $100 investment to more than $10,000.
DeFi can definitely make you good money, if you are in it for the long haul and not in for a quick flip. But even the flip can still make you money but you may end up being scammed.
Now can DeFi buy you a Lamborghini?
Based on the following three points, you can clearly see that at the end of the day DeFi can buy you a Lamborghini if you are patient and invested in legit DeFi protocols.
There are loads of them out there you just need to do your own research and find a good entry point. Legit DeFi projects like Aave (LEND), Compound Finance (COMP), Synthetix Network (SNX), SafeHaven (SHA) , Unicrypt (UNC), Akropolis (AKRO), etc…