A little thread on the defi stuff and yield farming. I do think there is a short term opportunity to make money but you really have to know your stuff. If you don't you will get burned fast. Part of the problem is it moves so fast it is hard to get caught up unless you have time
Basically the concept (as most of you know) is to send eth to these platforms where you can lend out or get a loan based upon using your eth (or in some cases other coinsas collateral. You get a small amount for holding eth there plus you get a token payout for using the platform
The token is worth what the market says it is worth. I think the inherent long term value is zero but for the short term it is worth what the market says it is worth. This is why let's say Comp, might be paying out 100% APY. BC the token is worth a decent amount atm.
As the value of comp fluctuates so do your yields. This is why we are seeing a lot of chain hopping. It seems as if YFI basically set up a bot to capture the most yield for you automatically for a small fee. What YFI did is smart. The guy is making bookoo bucks.
I see the chain hopping will probably continue until the market becomes too saturated and the whole thing blows up. So imo make the money while you can but be careful, bc if something sounds too good to be true it probably is.
Another risk is if one of these protocols gets hacked. Each carries an inherent risk and because these are being programmed so fast I don't think they can be properly checked for backdoors. And some are prob outright scams.
So moral of the story is check it out with a small amount of money. It is kind of cool what they are doing, but I don't see much of it as being sustainable in any way. I am def not an expert and if you want to poke holes in my thesis feel free.
Last thing is this. This is all pretty complex. I don't see normies getting into to this at all. So it is mostly old money shuffling around at this point. If you want some exposure to the hype without the risk maybe buy eth.
