I think it is pretty safe to say now that the DeFi boom is over and APY earning much above 4-5% is something to look at cautiously. The DeFi boom opened up a whole new realm of possibilities and for a moment showed what the future could look like. Greed and a lack of transparency really blew that up though as it became apparent that additional value was not really being brought to the blockchain and crypto rather leveraged bets were placed and people did what they could to take advantage of unsustainable yields before those very yields collapsed.
While many different DeFi projects have fallen I do think it is important to highlight those who made it by keeping it simple. Compound (COMP) is probably the best example of a "blue chip" DeFi application out there. It is not alone though as others have maintained themselves in their own right. I have been and continue to be a huge supporter of Harvest Finance but given current conditions, I have pulled my assets out of the dApp and instead have just let my iFARM sit there and continue to grow.
Much like I said a few days ago when I pulled all of my assets off of KuCoin the same is true with DeFi applications. There have been a few exceptions and that is where it would just cost way too much to pull the assets off and so they will remain on the application. Now DeFi has been relatively protected given everything that has occurred in the space this year but again I am moving to make the safer bet rather than push for a few additional APY points.
Where am I finding my yield then? Staking. I first started staking with Tezos over two years ago when it was really one of the only options available. As blockchains and dApps have matured more and more coins and tokens have added functions like this. This means part of my portfolio has been adjusted with cryptos like The Graph, Solana, and an in the future Chiliz growing in position size. Others like Bitcoin and Ethereum I have chosen to continue to accumulate but no longer lend out for any sort of return. There is a single crypto that I have continued to stake on a DeFi platform but that is due to how it functions and that is Harvest Finance's token FARM/iFARM. Since I had been staking continued to stake my FARM and iFARM my balance has grown considerably. With an APY that will vary between 6% and 21%, the 1.4 iFARM in my wallet is over 2.2 iFARM on their platform. Given the limited options I had, I really decided to more or less just let it ride as it is not enough money to make or break me and at the end of the day it continues to produce so I will just let it ride for now.
The importance of staking has grown considerably since the Ethereum move to PoS and the total locked volume has eclipsed $100 billion. Given the protections of blockchains often with a built-in slash method, the blockchains are secure. Is the APY going to be crazy using methods like this? No, not at all some are as low as 4% others can be 8-10% depending on the person you are delegating to. By removing exchanges and DeFi and moving to cold storage or even hot wallets I have complete control over my crypto giving me the option to lend out or stake as I feel is appropriate. Is it perfect? No but does it give me much more peace of mind than what I had previously been doing? 110% yes it does.
Please know I am not a financial advisor and make sure you do your own research! If you enjoyed this article and would like to support me further below are a few referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_
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