Excerpts from CareYourPresent website

Crypto DeFi Farming

Crypto DeFi farming or staking can be very rewarding if you know when to enter and exit at the right time.

For those who invests in stocks, funds, etf, typical dividend yield is usually 1-5%. Those that gives you 8% – 12% are rare, or highly leverage, or something fishy about it that should warrant further investigation.

If one is interested to invest in Crypto DeFi farming,  you will see the yield (APY) to be commonly at least 20% and above, with some even hit few hundreds or few thousands %.

For those who are long enough in Crypto, you should have remembered this Lamborghini calculator narrative story in OHM, Wonderland Time!

For example, 80000+% APY will give you 80x return to your capital in a year. Putting in a capital of $900 will give you $800,000 in a year! 3 Lamborghini! WOW! Why bother to invest in stocks anymore? Let’s just farm CRYPTO!

Huge risks in Crypto DeFi farming

However the truth is often otherwise.

For those who are long enough in Crypto, you will realized that high APR/APY (be it 1000% 10000% etc) only sounds good on the surface. Most important is still the underlying crypto coin.

If the underlying rewards token price crash, no amount of high APR/APY can save you. Look at the legendary example of Wonderland, OHM. What happen to your capital? Even with the high APR/APY, one will still lose badly.

Investing in Blue Chip Crypto

Hence the key is to preserve your capital, buy good coins and survive the bear. Once that’s happens , profit will come automatically!

Remember do your due diligence, only buy coins which you have conviction to hold even in bear and not just listen to “Guru” shilling of coins. You can even stake or farm good coins too and earn much higher yield.

Losses farming in Defi Kingdom

Recent coin that can make into history is Jewel and Crystal which drop 90% from ATH. Remember 4000% APY of Crystal in early April with price of $40 per Crystal. Current price is $2 is Anyone suffer from it?

Price chart of Jewel token

Conclusion

There are huge risks in DeFi farming and may result in total loss of your capital especially if there is a Crypto rug pull. However, if one do a due diligence and invest and exit at the correct time, it can be very rewarding. You can find the full article here

About the author augustine16

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