Global Playboy
  • Travel
  • Work & Money
  • Lifestyle
  • Health & Fitness
  • Technology
  • Reviews
Facebook Twitter Instagram
Global Playboy
  • Travel

    The Complete Guide to Planning Vacations in Africa: Everything to Know

    26th January 2023

    The 9 Best Indian Road Trip Ideas

    25th November 2022

    What to Do in Hawaii: First Time Visitors Guide

    23rd November 2022

    10 Cheapest Countries To Visit in Europe

    19th November 2022

    What are the Awesome Benefits of Traveling?

    10th November 2022
  • Work and Money

    The Justin Welsh Linkedin OS Course: Honest Review

    24th January 2023

    6 Ways To Generate B2B Leads on Linkedin For Free

    24th January 2023

    Is a Personal Training Career Worth it in 2023?

    23rd January 2023

    The Benefits of Being A Grocery Driver (and How to Become One)

    22nd January 2023

    Rise to the Top: A Guide to Becoming a Fitness Influencer

    17th January 2023
  • Lifestyle

    5 Tips To Consider When Renovating Your Home

    27th January 2023

    Eight Interior Design Tips for Your Apartment

    27th January 2023

    5 Tips for Self-Improvement

    11th January 2023

    What is Manscaping and How Can You Do It Properly?

    22nd December 2022

    An Essential Guide On How to Look Good as a Guy

    20th December 2022
  • Health & Fitness

    Is a Personal Training Career Worth it in 2023?

    23rd January 2023

    7 Goals to Set to Better Yourself This Year

    20th January 2023

    Rise to the Top: A Guide to Becoming a Fitness Influencer

    17th January 2023

    5 Tips for Self-Improvement

    11th January 2023

    Energy Products and Supplements: What You Need to Know

    10th January 2023
  • Technology

    5 Undeniable Benefits of Solar Watches

    21st January 2023

    What Can I Use Chat GPT For?

    17th January 2023

    Is Solar Panel Installation Right for You?

    12th January 2023

    How To Send a Connection Request On Linkedin That Doesn’t Suck

    30th December 2022

    Get Paid & Learn To Code? The Best Job Options For New Programmers

    20th October 2022
  • Reviews

    The Justin Welsh Linkedin OS Course: Honest Review

    24th January 2023

    Dalwhinnie 15 Year Old Scotch Whisky Review

    21st December 2022

    Gomatic Travel Pack Review: Best Digital Nomad Backpack?

    26th September 2022

    “Outrunning Fear” by Christine Glory

    16th August 2022

    Old Salt Rum Review: Made In England!

    25th January 2022
Twitter Instagram LinkedIn RSS
SUBSCRIBE
Global Playboy
Twitter Instagram LinkedIn
Home»CryptoCurrency»What is DeFi & How Can You Use It?
CryptoCurrency

What is DeFi & How Can You Use It?

Oli LynchBy Oli Lynch16th December 2021Updated:5th February 2022No Comments6 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Reddit WhatsApp Email
Decentralised finance, or defi, is this the future of banking?

There are a lot of crypto related buzzwords around at the moment, and one of them is DeFi. If you’ve not get your head around the whole blockchain or Bitcoin tech, don’t worry – this one is quite simple.

And the great thing about DeFi is it can be a really simple stepping stone into the world of investing in your future.

But what is DeFi? And is it something you really need in your life right now? (Spoiler alert: Definitely).

What is DeFi?

Defi stands for decentralized finance. What this effectively means that your money is stored in a non-centralised location. What does this mean?

A bank is centralised. They have access to your funds and if they go bankrupt, the local currency collapses or other circumstances change, your money can become either unaccessible or just disappear.

With decentralised finance, your money is stored on a public ledger, known as a blockchain.

This means that your money is not accessible to anyone else, except you. The bank can’t touch it, the government can’t touch it and theoretically, no-one else can touch it. Of course this depends on how secure your account is… Which we’ll look at in more detail shortly.

So now you know what is DeFi, we can look at how to use it….

Defi vs the bank

Decentralised finance platforms have been springing up everywhere – with many of them offering some fantastic offers to get you to invest. And this is how defi platforms have been able to tempt users away from the banks.

Many defi platforms offer interest rates far beyond what any bank can offer. Here in the UK, banks are offering annual savings rates between 0.5% to 2.5%. Pretty underwhelming, whatever your savings level.

The defi platforms offer very eye-catching rates, up to around 20% per annum.

So if you put $10,000 in the bank, you’ll take back a maximum of $250 if you leave it for the year.

With defi, with that same $10,000, you could be taking back $2000.

We should point out that there are a lot of different defi platforms, and if you’re trying to weigh up defi vs the banks, there are benefits for both sides. There are risks to consider before you take the plunge into defi, and abandon your current account forever.

How does defi work?

Defi operates on a similar model to traditional banks, but with a big difference. While your money in the bank is lent out to borrowers, and the bank then pays you a (very small) percentage of the profits back, with defi money is leant on the blockchain.

This means there are less fees, less regulations and less overheads.

While this means your investment returns are much higher with Defi, the risk is also higher.

With a bank, you have the security that you can walk into a branch, or contact customer service, and ask for your money any time you need it. You also have a bank card so you can draw your money from an ATM if you want.

With Defi, it’s less straightforward.

If you lose your login details, or someone else gets access to your account, you don’t necessarily get much in the way of support.

However, this is changing and there is a new wave of DeFi platforms that offer some great benefits, have your investments covered in case of theft and even issue bank cards.

Examples of DeFi platforms

The defi platforms that you might have heard of include:

  • Curve Finance (curve.fi)
  • Compound (Compound.finance)
  • AAVE
  • Cake (Cakedefi.com)

This is just a small selection of the many defi platforms out there (here’s a more comprehensive list).

Many of the decentralised finance platforms are exchanges where you deposit your money in the form of crypto currency, often their native exchange token.

For example, if you use AAVE, you’ll need to visit their platform (AAVE.com), connect a crypto wallet such as Metamask and add your crypto to their exchange. From then, you can ‘stake’ or earn interest, borrow money based on the amount of money you have staked and earn interest in the staked coin.

Cake also offers very high staking rewards (some in the multiple hundreds of percent), also also crypto tokenizes some popular stocks too. But again, this is a high risk staking option, requiring a crypto wallet and cryptocurrency to stake.

Of course as crypto is relatively volatile, by earning interest in crypto your final profits might be less than if you had just earned the lower percentage in your local currency. This is a risk you need to weigh up.

But newer platforms like Nexo and Amon offer another level of security to your defi investments.

The benefits of these platforms is that they allow you to earn interest not just on your crypto holdings, but also your fiat currency such as US Dollars, Euros and GB Pounds.

Nexo

If you’re looking for an easy to use defi platform, Nexo is super simple. No connecting wallets, no need to have crypto coins that you might not be happy to hold for a year.

Nexo allows you to invest USD, GBP, EUR and an assortment of stablecoins (the crypto version of ‘real money’) for a return of up to 12% PA.

If you do hold popular coins such as Bitcoin, Litecoin, Cardano or Polygon, you can also stake these to earn interest up to 8%. In fact, Nexo occasionally offers exceptional staking rewards…. I am currently staking Polkadot (DOT) for a 17% interest reward, and they’re currently offering 20% reward for AVAX and MATIC.

Have a look at Nexo here. – This is a link with my personal referral code, so if you sign up here you’ll earn $25 worth of Bitcoin (so long as you deposit $100).

Some other benefits of Nexo are that they are going to offer a bank card linked to your account soon.

Amon

Offering up to 12% on crypto holdings, Amon might be the best bet for those holding crypto such as Bitcoin or Ethereum long term.

They do also offer interest on your fiat currency holdings and stablecoins too.

Another benefit to Amon is that their card is already available (Nexo’s Visa card has been ‘coming soon’ for a while now).

Check out Amon here – this is an affiliate link meaning we earn a small commission at no extra cost to you.

The risks of defi

As we’ve mentioned, crypto can be volatile which can mean holding it on a defi platform might result in negative interest. But, if you believe in the future of decentralised finance and crypto, like we do, then you’ll think that there is potential here that your bank just can’t match.

You should always do you own research with financial products and never invest more than you can afford to lose.

Read more about crypto on Global Playboy.

Related

Oli Lynch
  • Website
  • Twitter
  • LinkedIn

Freelance content manager and CEO of Sentient Creative. Oli is a keen blogger, regular traveller and sports fanatic.

Related Posts

4 Tax Tips to Streamline Your Personal Income Tax Return

15th January 2023

Need Cash Today? 5 Tips for Making Extra Money

16th November 2022

Should You Buy Verasity ($VRA) in 2022?

31st October 2022

Is Crypto Safe? What You Need to Know

24th May 2022

5 Cryptocurrency Mistakes You Should Avoid

18th May 2022

Revolut Review: A Digital Bank Account Worth Using?

17th May 2022

Leave A Reply Cancel Reply

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

Trending Now
Fun Stuff

What Is A Playboy? (And How Can You Be One)

By Oli Lynch5th September 20210

Ah the Playboy lifestyle. The envy of both men and women around the world. After…

Best Places To Buy Your Tailored Suit

10th June 2021

The 9 Best Indian Road Trip Ideas

25th November 2022

The 3 Step Process To Approach An Unknown Girl on Street

8th January 2021

Facebook is Shit: Reasons To Delete Your Profile

10th May 2022

How to Dress Like A Rock Star (Without Looking Like You’re Trying)

3rd April 2022

Subscribe to Updates

Get the latest creative news from FooBar about art, design and business.

Latest Posts

Don’t Be THAT Guy: The Male Profiles Everyone Hates

28th January 2023

5 Tips To Consider When Renovating Your Home

27th January 2023

Eight Interior Design Tips for Your Apartment

27th January 2023
© 2023 The Global Playboy . All rights reserved.
  • Home
  • About
  • Contact Us
  • Terms of Use
  • Privacy Policy
  • Cookie Policy

Type above and press Enter to search. Press Esc to cancel.

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT