Villy Enters DeFi
The secret world that a crypto wallet unlocks
Villy (the retail voice of Foot Guns) has entered the DeFi space This is his experience. This may or not be right for you. Consult your risk management team before starting to DeFi. Pregnant women and women who are nursing should not take DeFi, nor should anyone with Bitcoin Maxi Disorder (BMD). Call your financial advisor immediately if you experience these side effects: a desire to spend 24/7 on discord, buy jpgs on Opensea, or have nightmares of high network fees. In clinical trials, side effects of DeFi were mild: hitting the refresh page on coingecko and spending long hours researching animal and food based crypto tokens.
Hi, I am Villy and I am a retail investor.
Until recently, my experience with crypto was limited to the offerings of Robinhood. I purchased BTC and ETH and became a HODLer. Though I was unsure what exactly I was HODLing for. I kept seeing the price rise and fall. It feels like I am missing something. If I don’t know anything about these tokens how do I know if they are valued at the right price? This is where Foot Guns comes in.
I was able to use the Foot Guns cheat sheet to find a good exit point in my BTC trade at the end of July. I only sat on the profits for a week before I reinvested some of them back into Bitcoin because it had an 8% correction and the Foot Guns cheat sheet showed me a support level to buy at. Now I have more Bitcoin and more dirty fiat!
This still feels boring and like I’m missing something. I get that BTC and ETH move around a lot so you can make money trading the swings, but how is this different than trading stocks? I feel like I’m buying things that I don’t fully understand and the purpose is to sell right? I buy stocks with the hopes of earning dividends or to sell the shares in the future at a higher price. It just feels like a lot of extra risk taking and how will HODL generate future returns for me?
I asked these questions to Hal and he ran off to start writing a “How To Defi” series. He told me, “I’m going to teach you how to use crypto and then you can judge it for yourself”.
And he did.
I was able to get my first crypto wallet and take custody of my ETH. This is explained in How to DeFi - Part 1.
I was then able to swap my ETH for FTT. FTT is the token launched by the FTX exchange. Hal told me it would act like a stock and increase in value as FTX’s valuation increases. This is explained in How To DeFi #2 : Swaps.
I could see the power here. The ability to transfer your digital assets to anyone in the world and swap them out into any other digital form. But the FEES. Holy! The Ethereum network fees are crazy! $100 worth of ETH is needed during a busy weekday to swap $200 worth of assets. That just doesn’t work.
There you have it. My first experience in the DeFi space and I already identified a FootGun : ETH fees scale when the network is busy. Hal told me this already, but experiencing it myself really made it sink it. These are great new technologies, but they have a lot of room to grow. So, I get it now. That’s why they are going to increase in value. Because they aren’t ready in their current form. More development is needed, more growth. Something to invest in that will be worth more in the future because of a use case. Not just because everyone is HODLing.
I am not a HODLR. I am a DEFIER!
Look out for our part 3 of our How To DeFi series where Hal will explain how to “stake” your crypto tokens to earn passive yield.
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