Top Defi Trading Strategies in 2023 - Is Crypto Over
Are you interested in the world of DeFi (decentralized finance) and how it's changing the way we invest and trade? In this article, we'll explore three different DeFi trading strategies in 2023: real yield, DeFi indexes, and DeFi options trading. We'll look at what each of these concepts means, how they work, and what you need to know to get started. Whether you're a seasoned DeFi investor or just getting started, this article has something for you.
So, let's dive in and explore the exciting world of DeFi!
Real Yield
DeFi (Decentralized Finance) Real Yield is a popular yield farming metric in the DeFi space. It functions similarly to a stock dividend, where an investor invests in a DeFi protocol and receives a certain percentage of its revenue. However, what sets real DeFi yield apart is the "real" part, which refers to the calculation of the yield based on actual revenue earned by the protocol, rather than inflated or manipulated numbers.
To find real yield in the DeFi space, careful selection of reputable projects, understanding their yield potential and payout mechanisms, and evaluating their real yield using a formula is necessary. Choosing a DeFi project with a sustainable distribution model is key to earning real yield in the DeFi space.
The real yield of a DeFi project can be calculated by subtracting the rewards distributed to stakers from the total monthly revenue earned by the project. For example, if a project earns $200,000 in monthly revenue and distributes $90,000 to stakers in each of two reward pools, the real yield can be calculated as $200,000 - ($90,000 x 2) = $20,000. This calculation shows that there is a surplus of $20,000, indicating that the yield model is sustainable
DeFi Indexes
DeFi (decentralized finance) indexes are a type of investment vehicle designed to provide exposure to a diversified portfolio of DeFi tokens. According to Zerion, DeFi indexes are similar to traditional ETFs, allowing investors to gain exposure to a diversified portfolio of assets through a single investment vehicle.
Diversification is a key component of portfolio management, and it is no different in the world of DeFi. DeFi indexes can help investors achieve diversification with ease. However, not all DeFi indexes are created equal in terms of diversification.
The DeFi Pulse Index (DPI), for example, was found to be heavily weighted towards just four assets, accounting for 77% of the index's total value. This highlights the importance of carefully researching and selecting the right DeFi index to ensure proper diversification.
The DEFI5 index developed by Indexed Finance. It tracks a basket of DeFi "blue chips" including UNI, CRV, AAVE, COMP, SNX, and MKR.
The Synthetic DeFi Index token supported by the Synthetix protocol called sDeFi tracks a basket of top DeFi tokens to provide investors with exposure to DeFi with low fees and a single asset to manage
Defi Options Trading
DeFi (decentralized finance) options trading is a relatively new form of trading that involves the use of decentralized platforms and protocols to trade options contracts on cryptocurrencies and other digital assets. Options are financial derivatives contracts that give the holder the right, but not the obligation, to buy or sell a specific underlying asset at a predetermined price and time.
To start making money from DeFi options trading, it is essential to have a basic understanding of how options trading works. Beginners can start by learning the basics of options trading, such as understanding the different types of options contracts, including call and put options, and how to execute trades. They can also learn about the risks associated with options trading and how to manage those risks.
One popular DeFi options trading platform is Opyn. Opyn is a capital-efficient DeFi options trading protocol that enables users to buy, sell, and create options on ERC20s. DeFi users and products rely on Opyn's smart contracts and interface to hedge themselves against DeFi risks or take speculative positions on different cryptocurrencies.
Another popular DeFi options trading platform is Hegic. Hegic is an on-chain options trading protocol that enables users to buy or sell call and put options on ETH and WBTC. Users can earn premiums for selling options or hedge their risks by buying options.
To start making money from DeFi options trading, it is recommended to start with small amounts and gradually increase the investment as one gains more experience and knowledge. It is also important to keep up with the latest developments and news in the DeFi space, as this can have a significant impact on the prices of different assets.
Conclusion
In conclusion, DeFi trading has opened up a new world of opportunities for investors and traders. Real yield, DeFi indexes, and DeFi options trading are just a few of the many strategies available to those looking to get involved in DeFi. However, it's important to approach DeFi trading with caution and thoroughly research each strategy before investing. As the DeFi space continues to evolve, new opportunities and strategies are likely to emerge, and staying up-to-date with the latest developments is key to success.