$30k to $1 million passively challenge: Update 1

$30k to $1 million passively challenge: Update 1

By MadMaxx | Crypto Fondue | 24 Jan 2021


Hi everyone. Welcome to another article.

First off, allow me to thank you all for the wonderful reception you gave the introductory post! Over 4k views and counting. Amazing!

If you haven't read that post, then this one won't make much sense. So check it out here, and show it some love!

That aside, let's get into the meat of the matter today.

I decided to add two new earning options, all passive but a bit higher risk. In addition to explaining these, I will equally explain the risk involved with the previous methods.

Here are the new additions:

  • Yearn Finance Vaults
  • Statera Phoenix Fund

I was browsing through some coins today when I saw that Yearn moved up in price a bit. I had never really paid attention to what YFI was until today, and I figured out that it's actually a yield aggregator! This means it's basically a gold mine for this project.

So I have added it to my list as well.

In addition, I also have Statera's Phoenix Fund. I've talked about Statera in the past, and how they have these awesome index funds that outclass the market consistently. I can't believe I forget about them in the first draft, but they're here now. I chose the Phoenix fund because of the ratio of the flagship assets over the Stanos fund. However, if you're following me on this journey, feel free to use the Stanos Fund. This is just my personal preference.

Now let's talk risks.

Risks with providing liquidity on Uniswap

  • Impermanent loss: The ratio of the amount gotten by providing Liquidity to the amount you'd have had if you had just HODLed. It really doesn't affect me much because I'm providing liquidity in ETH/USDT mostly, so APY would trump daily movement most probably.
  • Rug pulls: These occur when an attacker drains funds of an unlocked liquidity pool. Again, not bothered because the ETH/USDT pool is flagship and has liquidity locked forever.

 

Risks with supplying assets to Compound and Aave

  • Liquidation: Most people supply liquidity and then use that as an avenue to borrow. This can however lead to liquidation. Therefore I'll avoid this.
  • Hacking: The pools can be hacked by attackers and drained. In this situation, there isn't any insurance, so that could lead to a partial or total loss of funds. There's no practical solution to this, so I'll just hope for the best.

 

Risks with using a trading bot

  • There's the obvious risk of the whale being wrong. This doesn't happen a lot, but if it does, I'll be ready.
  • The bot could go haywire: It is a beta after all, so I would allocate the smallest position to it.

 

Risks with using Yearn Finance

  • Not many inherent risks here, except that there is now a huge 20% withdrawal fee on withdrawals in V2. This really, really sucks, cause 20% is a huge number. However, we'll be earning YFI which historically has done well in price, so that should at least do some counteracting.

 

Risks with using the Statera Phoenix Fund

This is the one I can say doesn't really have any risks. The fund is pretty stable, and that's the entire point. To yield money without large losses. There might be one small problem, which would be rebalancing that causes impermanent loss. But the APY on the pool is super high, so it counteracts the Impermanent loss. (Take that impermanent loss)

 

Now, allocations. I didn't speak of this in my old post, so I'll do it here. 

 

STARTING AMOUNT: $30,000

TARGET AMOUNT: $1,000,000

EARNING METHODS:

  • Uniswap liquidity provision
  • Balancer liquidity mining
  • Supplying assets to compound and Aave
  • Statera index fund
  • Yearn Finance vaults
  • Whale copy bot

 

Allocations:

  • Uniswap liquidity provision: $5,000
  • Balancer liquidity mining: $5,000
  • Supplying assets to compound and Aave: $7,000
  • Statera Index Fund: $10,000
  • Yearn Finance Vaults: $2500
  • Whale copy bot: $500

These are the planned allocations. If you'd notice, I allocated the most to supplying assets on compound, because that is the lowest risk method with a decent earning potential. Plus it gives you free COMP anyway.

The whale copy bot has the least, because the point of the bot is to grow a small amount to a large amount.

That's my first update! I haven't started investing yet because of gas fees, but once they lower (hopefully tomorrow), I'll throw in the cash and watch the gains grow!

Also, I've switched from Zerion to Zapper.fi. Zerion had painfully slow updates and the UI isn't the nicest. For example, I sent the challenge money to the ETH address I connected to Zerion, and it showed up about 30 minutes after I had sent it. Not very cool.

Zapper has a beautiful UI and instantaneous updates to wallet status. So that's bye-bye zerion and hello Zapper.

Equally, I will be monitoring my Index Fund performance from the Statera dashboard. It's pretty clean and minimal, but very detailed.

That's it from me for today. Come back tomorrow for news on my first yields when I finally invest. 

Thanks for reading! If you enjoyed the post and like this idea, please leave a thumbs up and tip. Equally, comment if you're trying these methods out and following me step by step. It'd really give me a boost!

Thanks for stopping by.


MadMaxx
MadMaxx

In the eternal quest for crypto fulfilment. I'm an obese frog on the internet, what I say most definitely isn't financial advice.


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