Learning by doing!
I read a lot to understand Uniswap, Compound, lending, liquidity pools, etc. - last weekend I felt comfortable enough to start actively investing in my first DeFi project.
I decided to try earning interest on my Ethereum through Compound. In my opinion, I learn much faster by actively trying and playing around with those products. All studying won't beat the real-life experience you can get by start joining one of the projects you are interested in.
Compound seems to be a good fit for me as I can confidentially say that I understand their concept. On top, it is currently one of the most used platforms in the DeFi space. Will it provide the best return possible? Time will tell - I tried to make a few predictions based on the estimated annual interest rate but at this stage, I can't tell really how the fees might affect the gross profit.
What did I do?
First, I opened a CDP (Collateralized Debt Position) at Compound (https://cdp.makerdao.com/). I deposited my Ethererum as collateral and draw DAI against the amount of Ethereum deposited. I paid attention to avoid liquidation by keeping the collateralization ratio above 200%.
Now, I supplied my DAI to the compound pool through https://app.compound.finance/
Conclusion
To be honest, it was time-consuming to read about all those different projects and find one to feel comfortable sending money to. Overall, the process itself was really easy once I figured out what those two different platforms are for. I look really forward to compare my investment with other projects from the DeFi space. I am interested in how to figure out what interest rates I can get through other platforms and if I made a good decision. Any comments are much appreciated.
