DeFi is booming, but most investors don’t even know what they’re investing in. Are you buying a token? Staking? Providing liquidity? Using a DEX? Let’s clear it up.
DeFi Investing = 3 Main Things
1️⃣ Buying DeFi Tokens (Governance & Utility)
Think: AAVE, UNI, MKR, CRV
These are ownership + governance tokens of DeFi protocols.
Some (not all) share revenue or give you voting rights.
Example: Holding UNI lets you vote on Uniswap’s future—but doesn’t earn you fees.
2️⃣ Using DeFi Protocols (Yield, Lending, Liquidity)
Instead of just holding tokens, you put assets to work:
✅ Staking ETH on Lido → Earn ETH yield
✅ Providing liquidity on Uniswap → Earn swap fees
✅ Lending on Aave → Earn interest
3️⃣ Trading on Decentralized Exchanges (DEXs)
Unlike Coinbase or Binance, DEXs let you trade crypto without middlemen—everything happens on-chain.
Think: Uniswap, Curve, SushiSwap, Bancor
How to use them:
✅ Connect your wallet (MetaMask, Ledger, etc.)
✅ Swap tokens directly—no KYC (Know Your Customer, identity verification required by centralized exchanges), no centralized control
✅ Provide liquidity & earn a share of trading fees
🔥 DEXs are exploding. In 2024, Bancor launched Carbon DeFi, an advanced decentralized trading platform that reduces slippage and improves security. Balancer V3 also integrated with Aave, making liquidity pools even more efficient.
Other Top Ways to Invest in DeFi (Coming Soon 🚀)
The 3 core strategies above are just the start. More advanced DeFi investments include:
✅ Yield Aggregators & Auto-Compounding → Platforms like Yearn Finance optimize returns.
✅ DeFi Derivatives & Perpetual Trading → Leveraged trading (borrowing funds to increase trading size) on dYdX, Binance Futures and GMX etc.
✅ Stablecoin Lending & Arbitrage → Earning passive yield with USDT, USDC, and DAI.
✅ Real-World Assets (RWAs) → Tokenized Treasury bonds & real estate via Ondo Finance. (Introduced in v8)
We’ll break these down in a future CryptoNuggs deep dive—stay tuned.
The Smart Move?
✅ Buy strong DeFi tokens if you believe in the protocol’s future
✅ Use DeFi platforms to earn real yield & fees
✅ Trade on DEXs to avoid centralized exchange risks
✅ Best strategy? Do all three—own governance tokens, stake for yield, and use DEXs for decentralized trading.
Most DeFi investors are just buying tokens and hoping for a pump. The real money? It’s in using DeFi, not just holding it.
🚀 DeFi isn’t just a market—it’s an economy. Smart investors participate, not just speculate.
Stay ahead,
CryptoNuggs
