When I was in my university years, I had a friend who told me about Bitcoin and how it's going to disrupt the current financial system. It was 2017, and the Bitcoin prices are still pumping up but haven't reach all time highs. I got super excited by the price movement and FOMO myself into depositing RM500 worth of Bitcoin into Luno just to bet and see how much I could earn. I withdrew RM1500, 3x gains in a matter of weeks, noice.
Then, here's my biggest mistake after that: withdrew it to my bank account and left my money there until the year 2020 when the next halving came.
Over the past 3 years I'd been focusing on getting good grades and working on my first job before I furthered my studies for a Master's degree. Then the pandemic came, lockdowns were imposed, and it got me thinking: Since I'm spending less during a pandemic, what can I do to grow more money? Thus, I bought Bitcoin again 2 months before the halving when the prices were around the $7k mark. Using Luno again, I felt like something was missing: I'm not actually earning any interests holding those coins. That was the moment when I finally learned about DeFi, which stands for Decentralized Finance. Basically DeFi is financial system where the transactions of your funds do not go through third-party entities and utilises blockchain technology to record your transactions in a hackproof and safe manner. After learning how to send Bitcoin to different types of Crypto banks and earn interest, I concluded that DeFi is one of the best alternative options that I can let my money grow far better than the current Malaysia financial systems are offering.
The reason why DeFi is superior to Malaysian banks are definitely the earn interest rates. Search any bank in Malaysia, and you won't find one that is offering more than 4.38% according to Ringgit Plus (That 4.38% rate is from Citibank Malaysia where you can get 4.38% until RM30k and then only giving you 0.5% after that). Most of the banks offer none to 1% interests, some higher but with many complicated conditions, and fixed deposits can only get you up to 4.5% annually. I personally used Affin Bank for my fixed deposits and got a maximum of 4.45%, but due to the pandemic, they reduced the rates to a maximum of 2.75%, which is absurd. I know I couldn't leave most of my money rotting in banks and so I learnt a lot about the stock market and Cryptocurrency and I found the first Cryptobank that I can try to invest in: Crypto.com.
Crypto.com is considered CeFi, which is centralized finance like what you see in normal banks but in the Crypto world where your accounts and wallets are managed by Crypto.com. Any cryptocurrency assets that you bought are technically not fully yours because you don't own your private keys. Private key is a code which has a string of words and only you can know and safe keep those keys to prevent your funds being stolen by hackers. You can learn more about the differences between CeFi and DeFi from this article. The summary is that I use some of my extra money, bought my first CRO at $0.07, Dollar-Cost Averaging it until recently, I have more than double my gains! You can refer to the previous post about my opinions on Crypto.com, where I explained that you can earn up to 18% interest p.a. when you lock your funds with them and are able to enjoy using crypto visa cards to pay your daily bills.
After this, I got even more excited and dedicated myself to learning more about CeFi and the different platforms out there that will suit me long term. I find that I'm not convinced about the management of Crypto.com despite the high rewards and the fact that I need to lock my funds to get those rewards, so currently I'm diversifying my assets into the Celsius network. The main advantage of Celsius over Crypto.com is that I can earn weekly compound interests similar to Crypto.com and they won't lock my funds. You can refer to this post on Celsius.
Overall, DeFi for me is definitely the future of financial banks, just hoping that more of these platforms can be recognized by the Securities Commissions of Malaysia so that more people can fully utilized the rewards behind DeFi.
Meanwhile, here are my referral links if you would like to try out Crypto.com and Celsius.
Crypto.com: https://platinum.crypto.com/r/2zphtgju37 ( referral code: 2zphtgju37 )
Celsius: https://celsiusnetwork.app.link/1587314a52 ( referral code: 1587314a52 )