By now we know that DeFi started as a way to bring more financial services to more people. And do it in a centralized way so there is no one person or entity (your bank or Paypal, or your merchant processor) that can get in the way of 2 people that want to transact.
That’s our ideal setup. And many protocols follow this. And others don’t.
For a great intro to automated market makers (AMMs) and 3 important DeFi protocols Uniswap, Curve, and Balancer, we go to this nice long thread from one of the research analysts at Galaxy Digital.
It’s long but well worth the read. This is an excellent primer for beginning investors to learn many of the popular and necessary terms you will need like:
AMM
LP
Impermanent Loss
Spot price
and more
And while you read, you learn about how you can buy and sell directly on Uniswap, form your own pool of up to 8 tokens on Balancer, or use Curve to exchange and earn on your stablecoins. Seeing the math behind where prices and returns come from helps us figure out which interest rate offerings are sustainable and which (like Anchor) are not.
State of the Crypto Market
While we maintain a DeFi focus, DeFi affects other parts of the market and other parts affect DeFi. This thread from Jason Choi, former GP and one of Asia’s biggest crypto investment funds details just how bad it is right now.
DeFi got hit the hardest thanks to LUNA and UST but no one was immune from down-trending markets. DEXes (decentralized exchanges) did the worst and have been in a down market for over a year, 400 days. But it is a great time to pick up some quality projects at a bargain.
Choi shows that centralized exchanges (CEX) have been more resilient mostly because they are earning fees both when people buy and when they sell. For those that like to follow particular Layer 1 chains like Solana or Cosmos, there’s some good analysis here in this thread for you too.
Farm/Investment of the Week
Fantom is a blockchain many are not familiar with but they present some nice DeFi yields options including this one.
Remember this is not financial advice.
Spookyswap is the biggest DeFi protocol on Fantom other than Curve, according to DefiLlama, with $203 million in TVL.
This opportunity uses Fantom’s native FTN token and a stablecoin, USDC. With almost $45 million in TVL in this pool, it’s one of the biggest pools in the Fantom ecosystem.
And if you already have a FTM-compatible wallet like their fWallet, Metamask, or the Coinbase wallet, you likely already have the FTM token. And we know you have stablecoins while waiting to make your next buy. So you can earn up to 18.37% on this pair while you wait.