I just want to share my recent experience with defi and my thoughts before,during and after.
Disclaimer: This isn’t meant in any way to disparage the various services I used in the entire process. My aim is to share this experience with you, and perhaps provoke some reflection about the state of defi and cryptocurrency in general.
Like everyone else, I was intrigued by yield farming. The ability to get bonuses for using a defi service seems like a good deal. But I did not get in straightaway. I wanted to watch and wait for a while, just in case there was some glitch in the code, or worse, a hack that happened.
So I eventually settled on supplying WBTC into compound.finance, and earn interest plus the COMP token.
How am i going to convert my BTC into WBTC ? Googling it gives me a list of explanations on what WBTC is, but no explicit instructions. Eventually came across wbtc.cafe, which is created by the REN protocol team. However, it has a scary disclaimer at the top and when you connect your wallet:
If you read that disclaimer, would you still consider going ahead? That site has nothing : no support, no ‘help!’ link, not even a link saying that this site has at least been audited by third party experts.
So I fearfully went ahead.
Second step: The conversion.
The steps involved isn’t the problem. Afterall, the website is simple enough. But look at the gas costs involved.
And look at how long it took me. At every step of the way I feared what happened. Why is it taking so long? What was it stuck at 3/6 confirmations for so long? What if it got stuck?
Messages to the Ren protocol telegram went unanswered.
I HATE BTC; it is bloody slow!
Third step: Getting my WBTC into compound.finance.
Finally got my WBTC. Now, I just want to lend my WBTC and call it a day. What?! Extra costs to ‘enable’ lending on compound.finance? I have to PAY to lend my money to a service? Yes, its gas costs, and yes, it goes to the miners who are absolutely delighted at the high gas fees going to them, but really, this just plain sucks.
You could argue that I might have saved a bit more by using a lower gas fee. But take the risk of dropped transactions, wait even longer, and face more uncertainty in the whole process? I hate this, but at this point I just want it to be over.
Fourth step: Lending my WBTC
So I finally lent my WBTC. Am I earning COMP? Yes. Was it a lot? No. Why? Because I acted too slowly and the interest rate went down. Proposals were made to prevent greedy yield farmers from gaming the system.
Additional point :
GOING BACK TO BTC.
The process is even worse. Now there’s no feedback whatsoever!
Wbtc.cafe does not show any progress at all in converting my WBTC to BTC!
When I tried asking for help on Ren telegram again, two scammers immediately DMed me to try to cheat me.
Total gas costs - more than 10 dollars.
Seriously. This really sucks.
How can anyone new to cryptocurrency hope to be able to use cryptocurrencies or interface with defi, if they face such uncertainty, costs, and the hoops that they have to jump through?
The man in the street would not face any problems in depositing his money into the bank; it is a matter of seconds to hand over the money to the bank teller, and he knows that his money will earn interest.
Does he care about themes like decentralization, security, ‘not your keys, not your crypto/money’ ? Would he bother to do so, even if you have explained it to him?
Compare the speed, familiarity and ease of use of the conventional financial world, and the experience and costs I just went through: I wouldn’t be surprised if many people just decide to pass over the opportunities that blockchain and cryptocurrencies have to offer.
*additional point: Yes, there will be people who would point me to ‘sponsored’ wallets like Argent, and cite their user friendly interfaces. I absolutely agree. I have an Argent wallet, in fact. Do I use it? No. Why? Pay more gas fees to transfer my funds over to another wallet just to store it there? No thank you.
This post isn’t meant to discourage anyone from participating in cryptocurrencies, blockchain, and defi. It’s meant to show the realities. Yeah, you would probably earn a lot if you have a lot of crypto to start with, but it’s probably not worth it if you aren’t rich to begin with. You might end up paying more.
Ethereum has been a great blockchain, and I still think it’s going to get better when ETH 2.0 comes around. I just can’t justify the costs right now to participate in anything defi related because the gas costs are going to bleed you dry.