Where to Start Building Your DeFi Strategy?
What assets to buy for your portfolio and how to place them in DeFi instruments?
What are the first steps to see initial results?
It’s quite simple:
- If you don’t know what to buy, purchase BTC and ETH weekly/monthly for a certain amount.
Don’t try to catch the bottom to grab BTC or ETH at the best price. The winner is the one who is in the market, not the one trying to catch the perfect moment to enter and exit.
Systematic purchasing of BTC and ETH will start forming your portfolio, which can then be used in DeFi.
But don’t forget about stablecoins in your portfolio, which you should always have ready.
They can be immediately directed into DeFi instruments to earn profits. You will use these stablecoins in case of a significant market downturn to buy assets into your portfolio.
- After doing your own research, not just watching YouTube videos titled “These Altcoins Will Make You a Billionaire,” you can add a few top altcoins to your portfolio.
Allocate a small portion of your portfolio to altcoins and think through how you will use them in DeFi.
A portfolio of 20+ coins is an unsuccessful attempt to diversify risks and hope that 2-3 coins from the portfolio will skyrocket.
Your strategy should be based on a system and long-term investments, not on hope and emotions.
- Definitely put your purchased ETH into liquid staking through Lido Finance (https://stake.lido.fi/) and deposit it on AAVE.
This way, you’ll earn returns from staking and can use ETH as collateral on AAVE.
You can also deposit BTC on AAVE as collateral.
After all, you don’t want to sell an asset that has huge growth prospects over a 10-year span?
And yes, you can take out loans against your BTC and ETH collateral. For example, in the form of the stablecoin USDC.
- Take out a loan in USDC at an average annual rate of 5% – this is the average loan rate per year on AAVE.
Direct the obtained stablecoins into DeFi instruments where the yield percentage is higher than the interest rate on your loan.
This is the simplest and most reliable option.
For example:
- Deposit stablecoins as liquidity on Gains Trade
- Put them in a liquidity pool on Pendle Finance
- Deposit in a USDC/USDT pool on the TraderJoe exchange
These are just basic strategies and options for using stablecoins in DeFi, but there are many more.
However, these steps will put you on track where you earn income from the growth of assets in your portfolio + earn on stablecoins.