DeFi: $1 Billion to $100 Billion in 1 Year

Decentralized finance, or DeFi, is made possible by cutting-edge blockchain technologies … and it is revolutionizing finance.

DeFi is not only an exploding sector of the crypto sphere but also one of the biggest wealth-generating trends in the world.

•  In just over a year, the sector grew from $1 billion to well over $100 billion.

Weiss Ratings Financial News Anchor Jessica Borg has more … you can watch the video segment or continue reading for the full transcript. 

Jessica Borg (narration): He’s the host of Weiss Crypto’s Sunday Special,

interviewing some of the smartest minds in the crypto sphere … like

Marija Matic, editor of Undiscovered Cryptos, and Juan Villaverde, editor of Weiss Crypto Portfolio and Weiss Crypto Investor.

JB: Chris, I’m interviewing the interviewer! Tell us about the Sunday Special.

Chris Coney: So, the goal of the Sunday Special is to take all of the intel and resources at Weiss Ratings and our guests that are coming in, and give people a macro-level view — how do you make money in crypto?

JB (narration): Decentralized finance, or DeFi, is the broad answer to that question. It’s the fastest growing sector in the crypto space.

CC: Because there are 10,000 crypto assets, it’s starting to segment into lots of different categories. You could say cryptocurrencies is one category — that would be the coins you actually use to spend.

Bitcoin and Litecoin and stablecoins are definitely currency in the truest sense.

But then you’ve got the DeFi sector; you’ve got the metaverse sector.

Even in non-fungible tokens (NFTs), you’ve got artwork and in-game items.

JB: How would you define decentralized finance, and how does it differ from centralized finance or traditional banking?

CC: DeFi is now really a segment of crypto that relates to financial services that are run by autonomous smart contracts.

The key difference is the custody of the asset is with the individual in crypto, but not in the old financial system.

They don’t have is the ability for me as an individual investor to have possession of my assets. It’s all title that’s held by a broker, or a bank, or this or that.

JB (narration): In DeFi there’s no middleman. You can move your money, or tokens, around different platforms on the blockchain — many of which are vying for you to use them and providing incentive.

CC: Now all of the service providers have to court your business. They would offer you a yield because you have custody of your asset. You can rip it out of one transaction and put it with another service provider.

And that’s what we’re finding with these yield farms that offer yields on stablecoins and other crypto assets. Because it’s two clicks to move your money, competition is rife.

JB (narration): The trend of yield farming can lead to what we call digital super yields.

CC: Yield farming is kind of like crop rotation in the sense that you have the seed — capital, let’s call it that — and then you plant it wherever it’s going to give you the best yield.

Because you’ve got sovereignty of your assets and it’s two clicks to move it, you can move your crops from one soil to the next to the next to the next … whichever is the most fertile.

And again, because competition is rife, there are so many choices, which leads to higher and higher yields to try to court that capital into this app or that.

JB (narration): Some of these apps offer double-digit yields on stablecoins, which are pegged to the U.S. dollar and designed to have little to no volatility. 

Stablecoins are crypto dollars and can be transferred within seconds to anyone around the world with a digital wallet.

CC: It gives this cutting-edge financial infrastructure to everybody that can afford a $20 smartphone and is in range of a WiFi hotspot.

Now, that’s global finance. Truly.

JB (narration): Aside from earning potential, some DeFi networks give investors  rewards just for using their platforms — like free bonus tokens.

Very soon Chris is releasing a special training video that’ll guide investors on how to access these types of apps.

He currently shows folks everything from how set up crypto accounts to how to navigate the most popular DeFi protocols.

CC: I want the training video to look as close to your experience as possible, so I start with a brand-new Ethereum wallet just as you would when you’re going through the course.

I buy some actual Ethereum with my own money.

JB: His mission is to take the mystery out of crypto and simplify how to see gains.

CC: There are only two ways of making money in the financial sector. There’s capital gain, where you buy something low and sell it for a higher price, or you take an asset and lend it to someone else and they pay you interest on it. That’s it. 

Do you want capital gains or do you want income?

And if you keep it that simple — you’re in one or the other — you go, “Oh, this isn’t complex at all.”

JB:  Should people just getting into crypto — or maybe they’re a little seasoned actually, as well — should they be looking to trade and be looking for profit potential on the trades, or should they be looking for yield farming, or both?

CC: A young person that has a little bit of capital needs to accumulate more capital. And because you’re young, you’ve got time. You can take bigger risks.

So those people are better off with the more speculative assets — NFTs, the metaverse.

This is like super cutting-edge, undervalued, massive upside potential, but very hard to pick winners.

The people with already-established capital, you’re better off with the income strategy — stablecoins, some of it in crypto, and then putting all of that on deposit, so that your Bitcoin and Ethereum and your dollars would earn yields.

JB (narration): And withstep-by-step instructions on how to do that, the name of the game is just to explore the DeFi world.

JB: Chris Coney, educator and DeFi expert, I really appreciate your time today. Great speaking with you.

CC: Appreciate it as well, thank you.

Best wishes,

The Weiss Ratings Team