RE: Assets Under Protocol (AUP) - The Best Way to Value DeFi Tokens
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So the question is, when I park my smallish stash of Bitcoin at BlockFi.com instead of in a wallet on my computer, am I dabbling in DeFi? I'm weighing the risk to my capital against the 6% return (compounding) and for the kind of small sums I'm looking at, it seems like a very good thing to do with an asset I'd just be HODLing anyway.
Interestingly it was an advert in Brave's new tab screen that made me jump, offering a $15 bonus if I leave a few BTC there for a month at least.
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Of course, if you use BlockFi, you should use my reflink!
But I wouldn't necessarily call it DeFi. Things like Celsius and BlockFi are more inbetween DeFi and TradFi. They sometimes get called CeFi. They're definitely better than our old friends, the Morgans and the Chases. But they're not as liberating as DeFi protocols. BlockFi is definitely a good gateway drug, though. Where else can you put your fiat into a legit 8.6% APY savings account?
Agree with what @shanghaipreneur said. These CeFi or centralized custodial solutions are a good start for DeFi beginners. The user experience is as though you are using a bank but it offers interest on cryptocurrencies.
Also, if you have a small amount, it may not be worth participating in DeFi since the gas fees might cost more than you earn
Yes, the gas fees thing is a relatively new development. For months, I was literally making money for free off my SNX airdrop from 2017. I recently had to stake that SNX on Aave because it didn't make sense to pay $5 in gas to claim $2.50 worth of tokens.
Seems like we have a lot in common when it comes to crypto investments. I am also into SNX. Been staking since 2019. If you got in since 2017, your ROI must be pretty insane