DeFi - Aave, QuickSwap and AdamantVault on Polygon (Matic Network)

I started DeFi about a month ago and I got addicted to it fast. Haha. As I got more comfortable/familiar with how things work through Binance Smart Chain (BSC), I began to explore other networks that claim to be cheaper and better than BSC. As a result, I now have money in BSC, Polygon, Fantom and Harmony ONE. I am sure you are already aware that the crypto world is full of scams, meme/shit coins but I have finally found a place where I am comfortable putting more money in 5 or even 6 digits. Even when I was in BSC, I have not considered putting more money in because it just didn't feel right/safe given that a lot of the projects are being built/developed by anonymous people.

Introducing Aave - an Open Source and Non-Custodial protocol to earn interest on deposits and borrow assets. Yes, you read that right, one can actually earn interest by borrowing from the protocol. If you looked at the screenshot above, you will see 2 different percentages for both deposit and borrow. The larger font one is the interest one will get in the same asset while the percentage in the smaller font is the yield one will get in the form of WMATIC for participating (both deposit and borrow) in the market. WMATIC is simply wrapped MATIC for usage on other networks which can be easily converted to MATIC which is the currency/fee one has to pay for transacting on the Polygon network. If you are on BSC, MATIC will be the BNB equivalent.

For example, if I were to deposit MATIC, my interest will be 1.83% + 6% = 7.83%. However, if I were to borrow MATIC, the loan interest will be 5.97% but I am also getting paid 15.63% by participating in the borrowing market. Hence, the net return is actually -5.97% + 15.63% = 9.66%. On the other hand, if I were to borrow DAI, you will see that the net return is -0.6%. Pick your battle wisely. lol.

Let me also share why I find Aave to be safer as compared to the other platforms in DeFi. Aave isn't new, it has been around since 2017 on the Ethereum network and is one of the top platforms with US$11 billion locked according to DeFi Pulse. Most importantly, we know who the founders/team members are. In my opinion, if one is genuine in working/building something that works, there is really no reason not to show their face/name and put their reputation on the line. Anyway, Aave launched on Polygon just last month but have already gathered US$4.8 billion in such a short time span which I guess shows a lot on the confidence others have on the platform too.

To get started, simply deposit some of your existing crypto assets. I transferred my ETH from crypto.com to my Metamask wallet address on the Ethereum network before bridging over to Polygon.

This is what I meant when I said the fees are high/expensive on the Ethereum network. One simple transaction/transfer of asset cost US$35.70 (~SG$47.55). Hence, it is not recommended to bridge from the Ethereum network. Instead, try bridging DAI, USDC or USDT from BSC instead using xpollinate.io which will cost less than a dollar. When you bridge over using xpollinate.io, 0.001 MATIC will be sent to your wallet which is more than enough for you to convert your stablecoins to more MATIC. Alternatively, head over to matic.supply to claim the 0.001 MATIC for free too :)

Once you have some deposit, you will be able to borrow because some of your deposit (in fact all except USDT) will act as collateral besides earning interest. Click on "Borrow" on the top.

You will be able to see how much of each asset you can borrow and their relevant interest. 

I decided to borrow MATIC instead of USDT because USDT can't act as collateral which means I will not be able to borrow more using what I have borrowed. lol.

Once I borrowed the MATIC, I have a health factor of 1.83 now. The health factor represents the safety of my loan derived from the proportion of collateral versus the amount borrowed. It has to be kept above 1 to avoid liquidation/margin call.

Look what happens after I deposit the MATIC I borrowed.

My health factor has increased to 2.50. So what's next? Let's borrow more!

It was a lot of trial and error at the start but I have created a spreadsheet to do that now.

Before depositing what I borrowed.

After depositing, the health factor increases again. Not sure if you realized, I have essentially doubled my initial deposit/capital through this process and all of them are earning interest, making my money work doubly hard.

As a result, I have a different strategy now. I have moved US$20k from Celsius Network into Aave because the deposit in Celsius Network can only earn interest (10%) and cannot double up as collateral. In comparison, I can generate 20-30%+ interest with the above strategy and this is our current portfolio. I do plan on putting in more money into Aave as I see huge potential to generate cash flow/passive income with a much lower capital - DeFIRE with DeFi. Anyway, I will blog more on the risk and the spreadsheet I have created in my next article as this is getting slightly long. Meanwhile, you should do your own research if you are planning to try it out.

On a side note, CZM finds DeFi interesting too and has given me SG$3k to farm/invest for her (surprise surprise). Similarly, I have decided to invest her money into a liquidity pool by QuickSwap because it is the biggest DEX in Polygon and the founders/developers are known - not some anonymous food-coin fork. lol. If you are on BSC, QuickSwap is the PancakeSwap equivalent.

In addition, I am using AdamantVault, a yield optimizer that will auto compound the rewards from providing liquidity + their own governance token to further increase the return. The initial plan was to simply farm at QuickSwap but I saw an "endorsement" from QuickSwap so I believe it should be relatively safe to use AdamantVault too.

CZM's capital of SG$3k is now ~SG$3.3k in just a few days as the price of MATIC kept increasing. Huat ah!

Anyway, I have blogged about different ways to leverage crypto to build wealth for people with different risk appetites:

The safer approach using stablecoins

- Earning High Interest Using BlockFi and Celsius Network

- Earning High Interest Using BlockFi and Celsius Network Part 2

- Earning High Interest Using BlockFi and Celsius Network Finale

Risky approach but more hassle-free

- CakeDeFi - The Easy Way to DeFi

- CakeDeFi Freezer + Tracking in StocksCafe

Highest risk and you are on your own

- DeFi apps on Binance Smart Chain (BSC) such as PancakeSwap and PancakeBunny

- DeFIRE with DeFi

- DeFi - Aave, QuickSwap and Adamant on Polygon (Matic Network)

On a side note, Futu's moomoo app attractive sign-up bonus (one free Apple Share besides other benefits) has been extended to 31st May 2021 (1500hr SGT)! Take a look at the latest benefits here.

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)

CakeDeFi Freezer + Tracking in StocksCafe

A few days back, my investment in CakeDeFi grew to SG$6k+ which was a 20% gain in ~1 month. 

However, it has fallen to ~SG$5.5k now which is still a 10% gain.

Anyway, if you cannot take such volatility then crypto is definitely not for you. Today, I wanted to share a bit more on CakeDeFi which I did not mention in my previous article - CakeDeFi - The Easy Way to DeFi.

Besides Liquidity Mining, Staking and Lending, CakeDeFi has a Freezer too. The freezer allows one to freeze/lock up your DFI from 1 month up to 10 years in order to get some rebates on the staking fees. The longer you freeze, the more rebates you get.

If you scroll down further, you will get a view of the number of DFI that have been frozen and for how long. The signup and referral bonuses are frozen by default for 6 months with a defaulted auto-renew freezing after. To be honest, I do not have the conviction to freeze my DFI for 10 years, my guess is those are probably frozen by the founders or employees within CakeDeFi.

What I have been doing is to freeze whatever DFI available whenever I received the US$10 worth of DFI from my referrals/readers for the next 6 months and switch off the auto-renew option. Thanks once again for using our referral link! With such a high interest (90-100%), I am expecting our investment to double in 1 year (with the assumption that the price of the underlying coins does not fall too much) so it does make sense to freeze them for 6 months to get the additional 7% yield.

Currently, it has a TVL of US$357 million and is ranked 52 according to Defi Llama. Depending on the progress/development of the project, I might/might not cash out the capital and leave the profit to compound one year later but that's an article for another day. For now, I really like the simplicity/ease of auto-staking and auto-compounding CakeDeFi is providing as well as the ability to export all the transactions.

Such a basic function but missing in all the robo-advisors (at least for those that I am using - StashAway, Syfe and Endowus). I have found workarounds but still disappointed with them. Anyway, if you do not know, it is now possible to use StocksCafe to track your crypto investment.

For those that are interested in tracking CakeDeFi using StocksCafe, once the transactions are exported, you can head over to my CakeDeFi Liquidity Mining spreadsheet here and paste them into the "_raw" sheet. I have formulas in the cells that will extract those information and format them accordingly to be imported into StocksCafe. You will have to manually modify the "Deposit", "Swapped out/in" transactions to better capture your capital more accurately. Another thing to note is that the tracking does not take into account the impermanent loss suffered from the liquidity mining but it will still give a good enough estimation of your gains/losses. 

Crazy return with an XIRR of 252% that is accompanied by crazy volatility (18%) and drawdown (-18%). lol.

If you are wondering how it is being tracked in StocksCafe, I am assigning $0 to each and every transaction staking/mining rewards because we are getting them at no additional cost. Behind the scene, StocksCafe will then increase the number of coins we have and lower the average cost to capture the profits/losses. 

Next, I will be blogging about my DeFi experience on other networks! My new favourite is Aave on Polygon (Matic Network). Stay tuned!

Anyway, I have blogged about different ways to leverage crypto to build wealth for people with different risk appetites:

The safer approach using stablecoins

- Earning High Interest Using BlockFi and Celsius Network

- Earning High Interest Using BlockFi and Celsius Network Part 2

- Earning High Interest Using BlockFi and Celsius Network Finale

Risky approach but more hassle-free

- CakeDeFi - The Easy Way to DeFi

- CakeDeFi Freezer + Tracking in StocksCafe

Highest risk and you are on your own

- DeFi apps on Binance Smart Chain (BSC) such as PancakeSwap and PancakeBunny

- DeFIRE with DeFi

If you are interested in the platform I am using, do sign up using our referral links for some bonus :)

CakeDeFi - Deposits US$50 or more into your CakeDeFi account, you will earn US$30 in DFI and we will earn US$10 in DFI too.

If you are interested in the smart portfolio tracker (StocksCafe) which I am using as shown above, sign up using my link for a longer trial period :) Refer to our Referrals page for more information.

On a side note, Futu's moomoo app attractive sign-up bonus (one free Apple Share besides other benefits) has been extended to 31st May 2021 (1500hr SGT)! Take a look at the latest benefits here.

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)

Earning High Interest Using BlockFi and Celsius Network Finale

It has been about a month since I blogged/introduced BlockFi and Celsius Network to everyone. I believe many readers are also keen to find out if the interests are really that high and how to transfer the money back to our bank accounts. To be honest, I did not have any plan to do it (convert GUSD back to fiat) so soon because there will be fees involved but after watching this video by Chicken Genius where he threw/burnt $400 to demonstrate how to use options to buy Tesla stock, I thought I should do the same too :)

Let's take a look at the interest for April!

In total, the interest I received was US$224.10 for a US$30k deposit (30,000 x 10% / 365 * 27). Anyway, I chose to receive CEL initially because I was planning to up my loyalty tier (the plan has changed since I discover DeFi but that's a discussion for another day). If you choose to receive the interest in GUSD, it will get auto-compounded weekly!

Let's take a look at the interest I need to pay the bank for borrowing that US$30k.

Hahahaha. It was just US$24.78. That means I am getting a profit of ~US$200 monthly for doing nothing simply by leveraging into a high interest/yield "savings" account. Having said that, it is definitely not risk-free but I would say the risk is minimal - when either Celcius Network or Gemini goes under.

All that is left to do is to transfer and convert the GUSD back to fiat money (USD) to show the complete loop/cycle. As mentioned previously, GUSD is backed by Gemini and as far as I am aware, both BlockFi and Gemini recognizes it 1-1 as USD. However, wiring USD out of BlockFi will incur a US$30 admin fee and requires a minimum withdrawal of US$5,000, hence it is not recommended.

Select "Transfer" followed by "Deposit into Gemini" to reach the above "Transfer Funds" page. Select GUSD and note how it states GUSD will be converted to USD once it has been deposited to your GUSD address. Click "Continue" to get your own address.

I can't emphasize this enough - always make sure you transfer your money/crypto to the correct address!

Withdrawal from Celsius

Withdrawal from BlockFi

Anyway, I initiated the withdrawal/transfer of GUSD 55.03 (the interest I received in the last week of April) to my Gemini wallet as well as GUSD 14.97 from BlockFi (the interest for the few days the fund was in transit).

You can see both the GUSD being deposited into my Gemini account as USD without any fees.

When I tried to initiate a USD withdrawal, I was not able to proceed because my bank account was not verified. To verify my bank account, I would need to deposit money from that particular account. Unfortunately, I screwed up, so it took me so long to get this article out. I wired USD from my overdraft/leverage account directly instead of my Bonus$aver multi-currency account, which was added to the Gemini side so the verification didn't happen for days while I was waiting and waiting. I only realized that I have made a mistake when I clicked around, wondering if they were actually verifying manually. lol. That is why you see a 2 x US$10 wire deposit above.

Anyway, once my bank account has been verified, I could proceed to withdraw the USD from my Gemini account.

To my surprise, I received the full US$90 to my bank account! No fees at all! I checked with my RM, it turns out SC waives inward TT fees (SG$10) for priority customer, discovered another perk today! For those with a DBS account, you can take a look at this article by Suz. If you head over to the DBS website, it states that the inward TT fees will be waived for DBS Treasures customer too.

In summary, for crypto (BTC, ETH, etc.) savings account, use BlockFi:

Gemini --transfer (no fees for 1st 10 withdrawal per calendar month)--> BlockFi

Other places/exchange --transfer (some fees)--> BlockFi

For high interest USD "savings" account, use Celsius Network:

Bank --wire USD (no fee)--> Gemini/BlockFi (receive GUSD) --transfer GUSD (no fee)--> Celsius Network for 10% interest --transfer GUSD (no fee)--> Gemini (USD) --wire (no fee/SG$10)--> Bank

On a side note, I am aware of a local startup Hodlnaut increasing its interest for stablecoins which is a great move but the beauty of the above set up is that I can avoid all/most of the fees. In addition, there is no way to guarantee my capital like 1 USD will be equivalent to 1 USDC/USDT because I would have to convert/exchange them somewhere else.

I find it quite funny when people are still so sceptical or simply treat all crypto as scam/ponzi. I do not take umbrage (lol. can't help it) but such mentality is equivalent to SPH media business model - outdated. Even CZM is finding all these interesting now and even wants to put some money into DeFi!

Anyway, I have blogged about different ways to leverage crypto to build wealth for people with different risk appetites:

The safer approach using stablecoins

- Earning High Interest Using BlockFi and Celsius Network

- Earning High Interest Using BlockFi and Celsius Network Part 2

- Earning High Interest Using BlockFi and Celsius Network Finale

Risky approach but more hassle-free

- CakeDeFi - The Easy Way to DeFi

Highest risk and you are on your own

- DeFi apps on Binance Smart Chain (BSC) such as PancakeSwap and PancakeBunny

- DeFIRE with DeFi

If you are interested in the platform I am using, do sign up using our referral links for some bonus :)
BlockFi: Deposits US$100 or more into your BlockFi Interest Account (BIA), you will earn US$10 in BTC and we will earn US$10 in BTC too.

Celsius Network: Earn US$40 in BTC with your first transfer of US$400 or more and we will earn US$40 in BTC too.

Gemini: We will both receive US$10 of bitcoin after you buy or sell US$100.

CakeDeFi - Deposits US$50 or more into your CakeDeFi account, you will earn US$30 in DFI and we will earn US$10 in DFI too.

On a side note, Futu's moomoo app attractive sign-up bonus (one free Apple Share besides other benefits) has been extended to 31st May 2021 (1500hr SGT)! Take a look at the latest benefits here.

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)