As discusses last week, the focus this week will be the fees of entering my positions. I will split them in two parts: CEFI and DEFI.
CEFI:
I paid close to 0 fees entering my positions in Nexo and Celsius. I read a post on the celsius reddit on how to buy celsius with minimum fees. I figured out that I can use a similar strategy to get my BTC, ETH and Stablecoins into the platforms without any fees.
In short: Transfer your funds into an asset that is cheap to transfer (for example: BUSD, XLM, BCH, DASH) I prefer BUSD and XLM. Move it to FTX and move it back to the asset you want on Nexo/Celsius (BTC or ETH probably). From FTX there are no withdrawal fees.
So say you want to transfer $100 of BTC from Binance to Nexo, the costs of this strategy are:
- 0.1% for BTC -> BUSD (~$0.10),
- $0.04 withdrawal fees for withdrawing BUSD to FTX
- Again ~0.1% for BUSD -> BTC (~$0.10)
- No withdrawal fees for FTX. This totals only $0.24 in transaction costs (plus a small risk of Elon Musk tweeting something in the 20 minutes you are transfering your BUSD from one platform to the other).
DEFI:
My DOT stake was entered just fine, the transaction costs for staking DOT on Beefy.finance through Venus.io are quite high, due to a very complex contract. However, with the current APY it is even worth it for my $50 position. The costs were about 0.03 BNB ($1.20 at the time).
Liquidity providing is new for me and therefore I made some mistakes, in total the transaction costs would be $0.30 for entering the BTCB/BNB liquidity pool and staking my LP tokens. And also about $0.30 for the SPARTA/BNB liquidity pool. However, I wasn't sure how I could check how much my LP tokens are worth after a few days. I mistakenly unstaked the tokens, which meant that I had to pay two extra transaction fees of $0.08 for both Sparta and BTCB and I lost my already earned Sparta for staking the Sparta LP tokens (1.6 sparta was lost)-> A lesson learned for $0.60 in total is a cheap lesson!
Use this site to check how much your LP tokens are worth: Yieldwatch.net and avoid spending $0.60 for nothing like me.
Next week I will give detailed analysis on the returns of the DEFI projects, with a focus on the Liquidity Providing. Is it worth it? If so, I will include it in my strategy with more pairs! An analysis both with and without the transaction fees will be included. And also an overview of my returns after one week! Stay tuned.
