For myself I was introduced to DeFi when it first released. However for myself I always found it too complicated to dive into and I kind of kick myself in the butt for that often. Whenever something is new and hard that's exactly when you should be committing time to learning it as many others will drop out and not learn it either. This often causes record breaking APRs and very real possibilities for massive income. First movers advantage call it, but with that of course comes great risks and is why I always tell people don't invest it unless you're ok with losing it all.
I feel like I've taken that to heart now and from a investment stand point I've been treating liquidity much different than what most others do. Is it right? Is it wrong? Who's to say?
At some point the SEC is going to heavily crack down on exchanges. We are already starting to see this and many suspected this would start happening 3 years ago during the last rally. The thing is governments work slow and often times if not all the time the "real world" is way ahead of the government.
I feel an example of this right now is what we are seeing today. Governments targeting and attacking exchanges but for the most part many have already moved to DEX and DEFI. These more decentralize solutions of course come with risks and honestly high risks as they will be riff with scams, people looking to take advantage, hacks from untested system etc. It's critical to understand that you understand crypto is high risk. If you lose your funds count on never getting them back so don't put all your eggs in one basic, remain in control of your funds in your own wallets and start off of exchanges.
Right now the crypto markets are facing a huge liquidity issue. This is the aftermath of a hard sell off, scams, poorly developed and heavily invested in projects like LUNA, stable coins not being so stable and so on. This has caused major liquidity issues and with that comes great possibilities for those who can provide it.
The way I look at liquidity investments now is I'm ok if I lose it all. These are extra funds from my core funds and in that I reduce my risk. However liquidity on these platforms is now offering up 50%+ and in some cases over 100% APRs when before when things were red hot only offered up about 10% APR.
Hive suffers from liquidity issues just like any other blockchain right now and Ethereum I fear is headed towards a MAJOR liquidity issue if it changes to proof of stake in mid September. For myself however Hive and LEO are opening up huge possibilities and also the possibility for many others to start getting involved with hive. This is due to both CubDefi and PolyCub which I've been starting to provide liquid assets to on a more regular basis from rewards earned. Liquid hive is pretty hard to get your hands on from payouts however currently posts a 56% APR compared to the 8% - 11% you would earn on locking it up for 13 weeks and curating with it. That's pretty much a 40% increase in gains by providing liquidity on CubDeFi. Now HBD on the other hand is a bit easier to get your hands on and while it does pay out a hefty 20% APR along with a short lock up window it still could be possibly used for cub which now offers a 47% APR or 27% higher APR.
For me I use extra funds will still stacking hive and HBD in my own wallet. It's because I want to expose some of my assets to a higher risk for a higher reward.
For me this liquidity I provide is a VERY Long term hold. I personally have always put liquidity into a platform expecting not to touch it again for months if not years. What are you plans and thoughts on providing liquidity?
