February 2024
Intermediate to advanced
224 pages
7h 13m
English
Content preview from Understanding DeFi
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Chapter 5. Making Money with DeFi
This is the big kahuna, the one everyone is asking about: how to make money. In fact, I’ll bet a decent percentage of you reading right now just skipped directly to this chapter. Good. My kind of people.
Investing with a DeFi Protocol on Blockchain
A word of warning: the current incarnation of DeFi does not really reflect the potential of DeFi, or what it will be in the future (we hope). That version of DeFi we’ll discuss in Chapter 6, and you will see that it will involve significantly less risk than the current type of DeFi and will be more along the lines of secured peer-to-peer finance, or lending directly between individuals and/or companies without using banks, secured by some sort of asset as collateral.1
Right now, it’s basically a very speculative set of ungoverned, noncompliant DApps that offer great potential gain—but with commensurate risk. There is no real risk mitigation in DeFi currently, despite what anyone claims. Most of crypto is collateralized with other crypto, which tends to move in a pack in the market, not opposite one another. Crypto is viewed as one category of risk-on (or high-risk) asset, and there aren’t other asset classes yet within crypto to offset that risk. So, unless fiat or another asset class (like a real-world asset) is involved, there is no real risk mitigation.
Now that you understand that a lot of risk is involved in the current selection of DeFi DApps, let’s get started on how to use these DApps!
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I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.Amir M.
I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.