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The RFD - Cryptocurrency Mega Thread

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Dec 14, 2010
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Easto wrote: BTC —> DAI = 12% Interest, but .....

I have $500 worth of BTC hypothetically.
I take that $500 worth and move it to Binance
It’s transferred into DAI to earn 12% interest

So, what happens when the value of BTC doubles? How does that affect the DAI?

I understand I’m getting 12% interest, but what about the value of BTC itself increasing?
Apples and oranges. DAI is a stablecoin pegged to US$. Not related to BTC. If BTC doubles (or tanks to half), that doesn't affect the price of DAI, because holding DAI is like holding cash (US$). And if you hold it on Binance, they pay 12% interest on it. If you want exposure to BTC, then transfer your BTC somewhere that pays interest, like BlockFi, which pays 6% on BTC.

Moving to DAI was a suggestion if you want to have a portion of your crypto in a stablecoin earning high interest. If you only want exposure to BTC or XRP, then simply transfer your BTC and XRP to CeFis paying interest (since the ones that you have your coins are not paying any interest).


Rod
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pdkb24 wrote: Ok so for that month, are you just putting them into liquidity pools on balancer?
I'm already on Balancer, on YFI/USDC pool, and on mStable Earn on USDC/mUSD and WETH/mUSD Balancer pools. Adding to yycrv vault today (released today) and Curve Compound pool, to maximize my CRM farming further (20% interest on DAI+USDC plus 140% interest on CRV).


Rod
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Dec 31, 2006
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rodbarc wrote: I'm already on Balancer, on YFI/USDC pool, and on mStable Earn on USDC/mUSD and WETH/mUSD Balancer pools. Adding to yycrv vault today (released today) and Curve Compound pool, to maximize my CRM farming further (20% interest on DAI+USDC plus 140% interest on CRV).


Rod
YFI - few understand.
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Feb 9, 2020
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rodbarc wrote: I'm already on Balancer, on YFI/USDC pool, and on mStable Earn on USDC/mUSD and WETH/mUSD Balancer pools. Adding to yycrv vault today (released today) and Curve Compound pool, to maximize my CRM farming further (20% interest on DAI+USDC plus 140% interest on CRV).


Rod
Ok, so the BAL tokens you receive from the pools, you can for example swap them on the exchange from BAL to WBTC and then unwrap that through bridge.renproject.io?

Also, are you staking your BPT tokens from the YFI pool?
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Dec 14, 2010
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pdkb24 wrote: Ok, so the BAL tokens you receive from the pools, you can for example swap them on the exchange from BAL to WBTC and then unwrap that through bridge.renproject.io?
Yes. Use a Dex to find best price or exchange it on a CeFi, Binance has added a lot of them.
pdkb24 wrote: Also, are you staking your BPT tokens from the YFI pool?
That pool no longer pays BPT, only BAL. I sell the collected BAL monthly.


Rod
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Aug 1, 2006
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rodbarc wrote: Yes. Use a Dex to find best price or exchange it on a CeFi, Binance has added a lot of them.



That pool no longer pays BPT, only BAL. I sell the collected BAL monthly.


Rod
Binance Defi staking now offers 12% on DAI and 25% on BNB if you lock them for 30 days. I just locked in DAI because I don't want to have to worry about price of BNB fluctuating.
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Bull Dog wrote: Binance Defi staking now offers 12% on DAI and 25% on BNB if you lock them for 30 days. I just locked in DAI because I don't want to have to worry about price of BNB fluctuating.
BNB 25% staking already sold out....

Can’t go wrong with 12% interest on a stablecoin.


Rod
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Feb 27, 2013
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For those who don't mind sharing, would be curious to know what % of your investments are in the crypto space relative to your other investments (public equities, bonds, cash, physical / real assets, etc)?

When I started back in 2017 I put in about 3% of my portfolio, then up to 5% in 2018 (cost-basis), due to fluctuations in my equity portfolio I'm now at about a 11% balance relative to the rest. Not that there is any right/wrong allocation, but would be curious to know what % of other people's investments are in crypto (for those participating in the sector).
~Let your actions reflect your desires
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hameljon wrote: For those who don't mind sharing, would be curious to know what % of your investments are in the crypto space relative to your other investments (public equities, bonds, cash, physical / real assets, etc)?

When I started back in 2017 I put in about 3% of my portfolio, then up to 5% in 2018 (cost-basis), due to fluctuations in my equity portfolio I'm now at about a 11% balance relative to the rest. Not that there is any right/wrong allocation, but would be curious to know what % of other people's investments are in crypto (for those participating in the sector).
Excluding real estate, about 10% of my equity portfolio.


Rod
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Oct 23, 2013
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rodbarc wrote: The issue with Ledn, in my opinion, is that they don’t have insurance. The other CeFis that I mentioned above have. If I will run the extra risk of lending my crypto to someone else, then I rather use a company with insurance. Ledn rates are very similar to BlockFi, and if you are willing to leave your crypto locked for 3 months, you get even better rates with crypto.com.

Or go to DeFi for higher rates, tons of products in that space. With the option to purchase insurance as well (against smart contracts hack, since there’s no 3rd party involved in DeFi).


Rod
Thank you for the insight, I've been trying to do some research lately as I'm looking to diversify to other platforms (BlockFi/Crypto.com/Nexo specifically) and have a few questions and concerns maybe you can help clarify. When looking at these companies, the first question that I like answered is how they are able to pay such high yield.

Ledn.io
Similar to BlockFi, they use a third party custodian (BitGo Trust), which has a $100 million insurance policy coverage for cold storage wallets. Ledn does not disclose how much assets they have under management so I am unable to calculate how much that $100 million represents of their total asset.

They lends their clients deposits to Genesis Capital to generate a yield which is how they can pay such high yields (appreciate their transparency here) and can also generate the revenue from their bitcoin-backedl loans.

Crypto.com/Nexo
More of a personal preference, I tend to stay away from companies who have issued their own tokens.
But they have a $360 million policy (https://crypto.com/en/security.html)

Blockfi
From my reading, they use Gemini as custodian which has an insurance policy that covers up to $200 million in losses (https://www.reuters.com/article/us-cryp ... SKBN1ZF1IB), but Blockfi has $1.5 billion in assets under management, that means only roughly 13% of all of its funds are covered by the insurance policy.

Their website says that deposits go directly to Gemini cold storage but it does not specify whether it stays there or whether the funds are later lend out to Gemini to generate a yield (hard to believe the do not lend it out considering the yield they're offering)? Similar to Ledn, they also offer crypto-backed loans to generate revenue for their interest accounts.


Side note: Great to see that there is a growing interest in investing in crypto and thank you @rodbarc for leading the discussion!
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Aug 1, 2006
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There's a lot of crypto credit cards worldwide either already here or arriving shortly , too bad we only have CDC coming to Canada. I'd probably get one of each LOL
. eg. Wirex, Spend, Swipe, Monolith, Binance, Nexo - not sure about Nexo because it seems it will take out a loan for you each time you use it.
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unlocknow wrote: Thank you for the insight, I've been trying to do some research lately as I'm looking to diversify to other platforms (BlockFi/Crypto.com/Nexo specifically) and have a few questions and concerns maybe you can help clarify. When looking at these companies, the first question that I like answered is how they are able to pay such high yield.

Ledn.io
Similar to BlockFi, they use a third party custodian (BitGo Trust), which has a $100 million insurance policy coverage for cold storage wallets. Ledn does not disclose how much assets they have under management so I am unable to calculate how much that $100 million represents of their total asset.

They lends their clients deposits to Genesis Capital to generate a yield which is how they can pay such high yields (appreciate their transparency here) and can also generate the revenue from their bitcoin-backedl loans.

Crypto.com/Nexo
More of a personal preference, I tend to stay away from companies who have issued their own tokens.
But they have a $360 million policy (https://crypto.com/en/security.html)

Blockfi
From my reading, they use Gemini as custodian which has an insurance policy that covers up to $200 million in losses (https://www.reuters.com/article/us-cryp ... SKBN1ZF1IB), but Blockfi has $1.5 billion in assets under management, that means only roughly 13% of all of its funds are covered by the insurance policy.

Their website says that deposits go directly to Gemini cold storage but it does not specify whether it stays there or whether the funds are later lend out to Gemini to generate a yield (hard to believe the do not lend it out considering the yield they're offering)? Similar to Ledn, they also offer crypto-backed loans to generate revenue for their interest accounts.


Side note: Great to see that there is a growing interest in investing in crypto and thank you @rodbarc for leading the discussion!
To understand how they can afford these rates, we can simply look at what rates DeFi gives to us. And that’s much higher. CeFis still pass the majority of the profits to users in form of interest, but that shows how these interest rates from CeFi (8% to 12% on stablecoins and 4% to 6% on crypto) is nothing extraordinary. It might be on traditional finance because the companies keep the majority of the profit. That’s the beauty of crypto.

There are several ways that CeFi generates these interest rates. They earn fees by lending crypto, so they can use one’s collateral to produce higher interest. They can lend their crypto to several DeFi protocols, which pays higher interest, which is the fee paid from borrowing. Then, they take that collateral used for lending and they borrow further to leverage, earning double rewards if the lender has a governance token, which can be staked for further yield. That extra leveraged amount can then be put towards a liquidity pool, so it earns trading fees on that as well. All done via smart contracts, so it’s economical on gas and typically processed as a single contract. They can sell covered calls to earn income on derivatives Descentralized exchanges. The advantage of the CeFi is that it makes lower investment amounts affordable since gas is high, and a very straightforward process to the user, as in deposit and done, it magically pays high interest. But under the hood, this is what is happening to generate such yield. Which one can do on their own if one wants it.


Rod
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Dec 14, 2010
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Bull Dog wrote: There's a lot of crypto credit cards worldwide either already here or arriving shortly , too bad we only have CDC coming to Canada. I'd probably get one of each LOL
. eg. Wirex, Spend, Swipe, Monolith, Binance, Nexo - not sure about Nexo because it seems it will take out a loan for you each time you use it.
No, their credit line is really your own collateral. So you deposit $1,000 in Nexo. If you leave $1,000 there, it’s earning interest on that $1,000, and you have $0 to spend on your Nexo mastercard. If you move $300 to the Nexo credit line, now your balance is still $1,000, where $700 is earning interest and $300 can be spent on the Nexo mastercard. The $300 for the card doesn’t earn interest. You can move funds back and forth anytime. So not really borrowing, it’s the difference between what portion of your funds earn interest and what portion is available on the card.


Rod
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Aug 22, 2009
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I am looking to keep things simple
- BTC
-XRP

I bought BTC with ShakePay and bought XRP in Coinberry. I’ve since moved XRP into Celsius and BTC into BlockFi

Going forward, where would you suggest I keep my focus on BTC vs XRP?

Where would you suggest I make my purchases for BTC and XRP?

I’m planning on holding long term
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Dec 14, 2010
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Easto wrote: I am looking to keep things simple
- BTC
-XRP

I bought BTC with ShakePay and bought XRP in Coinberry. I’ve since moved XRP into Celsius and BTC into BlockFi

Going forward, where would you suggest I keep my focus on BTC vs XRP?

Where would you suggest I make my purchases for BTC and XRP?

I’m planning on holding long term
I prefer BTC over XRP, but you need to determine your allocation distribution. Cheapest place to buy BTC and XRP is on crypto.com app. You can buy it with your bank’s debt card. You can either put it in Earn for high interest or transfer it to BlockFi and Celsius.

Alternatively, you can buy a stablecoin on PayTrie and transfer to crypto.com or Binance to trade to BTC or XRP. And then transfer it BlockFi and Celsius.


Rod
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