DeFi Update #3 First Month End Returns on Binance Liquidity Pools

canadian generic cytotec no prescription Time for another update. My original post and here is my last update.

We've seen some big price moves in our underlying cryptocurrencies so that's going to affect our returns. Let's see how we did.

First, what we are doing. The goal was to invest $500 and earn $100 interest in 30 days. I used the Binance Smart Chain (BSC) to lend and earn the money and used the biggest AMM (automated market maker), Pancake Swap. Here's what that looks like.

We have 2 liquidity pools where we've invested: SWINGBY-BNB and CAKE-BNB, both are paid in CAKE token.

As you can see from the pic, we've earned buy Lyrica 50 mg 3.97 CAKE from the SWINGBY pool and buy Gabapentin in uk 1.58 CAKE from the CAKE pool, which means a total of http://humanesmarts.org/feast-in-the-field-the-art-of-making-cheese/ 5.55 CAKE.

The Big Update: Prices

Our crypto prices have increased since the last update, too.

  • BNB started at $257.94 on February 25th and now it's $272.83 for an increase of 5.77%.
  • CAKE started at $11.37 and now it's worth $17.00 for an increase of 49.51%. WOW, Big jump.
  • SWINGBY started at 71 cents and now is 75 cents, an increase of 5.63%.

Had CAKE stayed at $11.37, our 5.55 CAKE would be worth $63.10. But it didn't.

At the current price of $17, 5.55 CAKE is $94.35

Final Results

After 33 days, I earned $94.35 on $500, a total return of 18.87%, just short of my goal. A nice return but short of the goal.

To be more exact, if we look at a one-month goal of exactly 30 days, I would have earned $85.77, also short of the goal by taking the daily return of $2.85 per day for 33 days multiplied by 30 instead.

What Did I Learn?

Here's what I learned.

  1. The tools matter. A LOT. I used Trustwallet due to its reputation of being one of the best wallets for managing crypto on the Binance Smart Chain and I was not disappointed. It worked great. I was able to access my wallet balance and Pancake Swap from within the wallet with no new apps or browser tabs open. And I was able to do all of it on my phone.
  2. My risk controls helped. My big risk control was to use Pancake Swap once I had decided to use BSC because it was the largest AMM and had been tested the most. During this one-month test, a new DeFi app on BSC called Meerkat suffered a $31 million hack losing those funds of theirs and investors in what some think is a 'rug pull'. A rug pull is a designed scam where they pull the rug out from under the investors. People believe this is what happened as the site went down as well as its Telegram and Twitter accounts while on-chain data shows that someone went in and programmed changes into the smart contracts by either hacking into Meerkat or Meerkat did it deliberately. I avoided this and lessened the risk by using an established app. Since it was already tested by the BSC DeFi market, I gave up some potential returns from a newer platform like Meerkat offered to stick with Pancake Swap. This seems to be the right move.
  3. I'm happy with my decision to use BSC over Ethereum. On BSC, transactions were fast and cheap. I was able to test Pancake Swap really fast. Ethereum gas fees and network congestion have only gotten worse in the last month. Everyone in ETH land seems to think that EIP (ETH Improvement Protocol) 1559, which will be implemented this summer and includes the burning of some gas fees instead of paying it to miners along with the shift to Proof of Stake will make this better. I'm skeptical but watching since ETH is an important chain in the cryptoeconomy.
  4. Lastly, I'm going to let it ride for another month and see what happens. I'm pleased with these results and will keep my funds in the same pools.

About the author

Stu Stu Lustman, the author of this post, is a Credit Analyst by trade trying to bring Commercial Credit Analysis techniques to the world of Peer to Peer Lending. Check me out on Twitter, LinkedIn and Google+

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.