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Decentralised Finance: What Works, What Doesn’t, and How to Profit in this Wild West of Earning

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Since the invention of Bitcoin in 2009, there have been many other cryptocurrencies have been created. As this technology has evolved, we’ve seen the birth of decentralised finance or defi. DeFi is a term used to describe financial applications that are built on top of decentralised protocols. This can include anything from lending and borrowing to derivatives and prediction markets. In this guide, I want to talk about what works and what doesn’t in DeFi, as well as how you can profit in this rapidly growing space!

This is based on my experiences within the space and is not to be taken as official financial advice, I am also not your financial advisor. Please seek a financial adviser if you would like to learn more about everything I’m speaking about here, and also to find even safer financial investments available to you in the centralised financial sectors. DeFi is still the wild west of investing so even with great returns can come just as much risk.

I’ve been investing in DeFi since 2017, and I’ve learned a lot in that time. One of the most important things to remember is that DeFi is still the wild west of investing. Not everything is fully regulated and whilst there is a lot of room for growth and discovery, there is also a lot of chance to lose all your investment, so practise proper money management with anything you decide to put in the space. You need to also be aware that there are a lot of scams and Ponzi schemes out there, so it’s important to be careful when you’re investing your money.

Many platforms promising extremely large returns, to the point of making you a millionaire in a few short years with a minimum investment of a couple hundred dollars should be viewed with some scrutiny. Be careful of those as they may start paying initially to earn your trust, but then they can take all your profit in a matter of moments when they ‘exit scam’ or ‘rug pull’.

An exit scam is when a project or platform abandons ship and takes all the money with them, often without any notice. A rug pull is when a liquidity provider removes their liquidity from a pool, thereby crashing the price and making the coin or investment worthless. This is often done without any notice as well. These are just some of the dangers you need to be aware of when investing in DeFi.

That being said, I’ve also made some good returns in DeFi. One of the best ways to make money in this space is to invest in derivatives, staking, trading or prediction markets. These types of investments can be risky as well, but if you invest wisely, you can earn a healthy return.

So, if you’re looking to get into DeFi, remember to be careful and do your research before investing. But also don’t be afraid to take some calculated risks, as they can often pay off big time!

What is decentralised finance (DeFi)?

Decentralised finance, or “DeFi,” is a term used to describe financial applications that are built on top of decentralised protocols. This can include anything from lending and borrowing to derivatives and prediction markets. In DeFi, there is no central authority controlling the financial applications. Instead, they are run by the users themselves on decentralised networks such as Ethereum.

This decentralisation brings a lot of benefits to the table. For one, it allows users to control their finances without having to rely on a third party. Additionally, it makes DeFi much more secure than traditional financial applications. Because there is no central authority controlling DeFi applications, they are much less likely to be hacked or shut down.

Finally, DeFi can also provide significant cost savings. Because there is no need for a third party to facilitate transactions, DeFi applications can often be much cheaper than traditional financial applications.

DeFi is a term used to describe financial applications that are built on top of decentralised protocols. This can include anything from lending and borrowing to derivatives and prediction markets. In DeFi, there is no central authority controlling the flow of money. Instead, transactions are processed by a group of computers known as ‘nodes.’ This makes DeFi incredibly secure, as it’s much harder for someone to hack into a network and steal funds.

This also makes DeFi incredibly censorship-resistant. For example, if the Chinese government wanted to block access to a particular DeFi application, they would not be able to do so. This is in stark contrast to the centralised financial system, where governments and banks can easily shut down access to certain services or products.

DeFi has many benefits over the centralised financial system, but there are also some downsides. One of the biggest downsides is that DeFi is still in its early stages and there are not many mature products available yet. This means that it can be difficult to find good investments in this space. However, I believe that this will change shortly as DeFi continues to grow in popularity.

How to get started in DeFi?

The first step in getting started in DeFi is to understand what it is. As I mentioned earlier, DeFi is a term used to describe financial applications that are built on top of decentralised protocols. This can include anything from lending and borrowing to derivatives and prediction markets.

So, if you’re looking to get into DeFi, the first thing you need to do is learn about these different applications and how they work. This can be done by reading articles online or watching videos on YouTube. Once you have a basic understanding of how these applications work, you will be in a much better position to make informed investments. Be mindful of persons who are trying to sell you on single investments without exploring any others. Many times they may be doing this for personal gains, such as a new coin, new platform or new token. This is known as shilling an investment and in the DeFi there are currently no regulations against it.

Another thing to keep in mind is that DeFi is still in its early stages and there are not many mature products available yet. This means that it can be difficult to find good investments in this space. However, I believe that this will change shortly as DeFi continues to grow in popularity.

So, don’t be discouraged if you don’t have a lot of experience with DeFi yet. With a little bit of research, you can get up to speed quickly and start making money in this exciting new space!

What are the risks of investing in DeFi?

The risks of investing in decentralised finance (DeFi) are largely the same as the risks of investing in cryptocurrencies. These include the risk of price volatility and the risk of losing your investment.

DeFi is still a relatively new space, and there is no guarantee that it will be successful in the long run. This means that there is a risk of losing your money if you invest in DeFI projects.

Additionally, cryptocurrencies are known for their high levels of price volatility. This means that the value of your investment could rapidly decline at any time. So, if you’re not prepared to take on this risk, it’s best to stay away from cryptocurrencies altogether.

Before investing in any DeFi project, make sure to do your research and understand the risks involved. This will help you make informed investment decisions and avoid losing money.

What is a DeFi scam?

One of the biggest risks of investing in DeFi is the risk of being scammed. Unfortunately, there are many scams in this space, and it can be difficult to tell the difference between a legitimate project and a scam. 

Some common signs of a DeFi scam include promises of guaranteed returns, unrealistic claims about the project, and pressure to invest quickly. If you see any of these red flags, it’s best to stay away from the project.

Additionally, always be sure to do your own research before investing in any project. This includes reading reviews from other investors, checking out the project’s website and social media accounts, and verifying that the team behind the project is legitimate.

If you take these precautions, you’ll be much less likely to get scammed.

How to spot further red flags of DeFi scams?

So, how can you tell if a DeFi project is a scam? There are several red flags to look out for. One of the most common is projects that promise unrealistic returns. If a project is promising returns that are too good to be true, it’s probably a scam.

Another red flag is projects that are not open source. If the developers of a project are not willing to share their code with the public, it’s probably because they have something to hide. This is another sign that the project may be a scam.

Finally, you should also be wary of projects that have a lot of hype but little substance. If a project is being promoted heavily on social media but there is no evidence that it works, it’s probably a scam.

So, how can you protect yourself from DeFi scams? The best way is to do your research and only invest in projects that you trust. Do your independent research into each project and make sure to read the whitepaper and review the code. If everything looks legitimate, then you can feel safe investing in the project.

However, even if you do your research there is no guarantee that you will avoid all scams. So, always be vigilant and never invest more than you can afford to lose.

What are some good investment options in DeFi?

There are several different investment options in DeFi. Some of the most popular options include decentralised exchanges, stablecoins, and lending platforms.

Decentralised exchanges are a great way to invest in cryptocurrencies. They allow you to trade cryptocurrencies without having to trust a third party with your money. This makes them a safer option than centralised exchanges, which have been known to be hacked in the past.

Stablecoins are another popular investment option in DeFi. They are designed to be stable and less volatile than other cryptocurrencies. This makes them a safer option for investors who are looking for less risk.

Lending platforms are another popular investment option in DeFi. They allow you to lend money to others and earn interest on your loan. This can be a great way to earn passive income and beat inflation.

What are some good choices you’ve found in DeFi investing so far?

Here are some of the choices you have for investing in DeFi

Blockfi

Blockfi is a lending platform that offers competitive interest rates on USD and crypto deposits.

Lending systems like Blockfi, which allow you to loan your crypto out for interest paid out monthly, earn a range of 3% to 10% per year and are recalculated monthly. 

I personally invest in a portfolio of Bitcoin (BTC), Etherium (ETH), Litecoin (LTC), USD Tether (USDT), Binance USD (Binance USD), USD Coin (USDC) and DAI (DAI) and dollar cost average (systematically investing equal amounts of money at regular intervals) within it.

You can check out Blockfi here; You can join now to get a bonus when you fund your account!

Exchange Earning and Staking Systems

You can use earning systems like staking that allow you to lock your coins into a process of governance of a coin system and in return get more coins as a reward. 

You can do this with exchanges, such as KuCoin and Binance, by using their Earn section and putting your coins there. 

You can also use private wallets (which are more secure for your funds). They have less coin options to stake but you can rest assured that your funds remain in your protection.

You can join Binance and Kukoin here and get rewards and check out these private wallets to Earn and Stake your coins for future growth.

Binance (Exchange with Staking and Earning Features)

Kukoin (Exchange with Staking and Earning Features)

Trust wallet (Private Wallet with Staking Features)

Exodus wallet (Private Wallet with Staking and Earning Features)

Important note about Earning systems and Staking outside of the above

Be careful of earning systems, staking systems and liquidity mining systems that link to your wallets and do not have proper documentation or writeups. Especially those introduced to you via messaging apps such as Whatsapp, Discord and Telegram. 

Most of the time these are scams and they can wipe out the funds from the crypto currency that you join and link to them with. 

As a beginner, I would say stay away and do not be fooled by the high returns they promise.

I personally joined some to test, thinking that my principle was safe (that is what they tell you, especially using a technology called ‘Coin Scanning’ to earn more coins, which seems to be all BS talk) only to see the funds completely pulled out of my account without my consent in seconds (even with two factor authentication enabled). Luckily, I used an entirely new wallet to test these systems out, so I was able to discard the compromised wallet. Do not make the mistake of using your main wallet to test these things either. 

So please, avoid these if you don’t personally know the project developers and have no way to properly verify the legitimacy.

Expert Advisors and Trading Bots

Trading bots can be extremely useful to earn in defi as they provide a more passive way of earning, as you can set them and only check on them for certain events (which you will be notified about). The bot will then analyze the markets and make trades for you automatically when it sees an opportunity that meets your pre-determined criteria.

There are many different bots available in the market, and I have used a few with success. One bot that I have had great success with is called Gestalt FX, which you can find here. (These links lead to a Telegram group which will provide you further information).

What I love about this bot is that it has a huge variety of settings that you can tweak to fit your own trading style, whether it be conservative, strong risk taking, and everything in between. It also has a great community of users and administrators who are always happy to help out.

Another great thing about Gestalt FX is that it is constantly updated with the latest information from the markets, so you can be confident that your bot is always working with the most up-to-date data along with notifications on when you pause and continue trading.

You can check out a video on how to get started with Gestalt FX bot below.

More information on the Gestalt FX Trading Bot and the ideology behind it

Signal Trading

Another way to earn through defi is signal trading where you get signals from people who are very skilled in trading in the markets and you set up systems to automatically copy their trades and make money off your capital investment.

Now not every trade is going to be profitable but once you go in with the understanding that over the time of the trades you will see a progressive upward movement, then you can put your emotions aside and make this work for you.

I’ve personally been able to make healthy returns that I withdraw weekly from this setup. 

Once you follow proper risk management (meaning you ensure that there are stop losses enabled if the trade does not go in your favour and you don’t sacrifice more than a few percent points of your account per trade) and maintain realistic expectations (understanding that a 50 USD account is not going to reach 5000 USD overnight, unless you do some seriously risky trading that would quicker blow your account than achieve that) you will see a promising growth with this strategy. 

To set up automated signal trading you would need,

I will go through it one by one with links for you to set up easily.

Telegram

You can download Telegram Messenger here and you can connect on your phone and computer. 

From here you can join free and paid groups and broadcast channels where experts will provide their analysis of different markets and provide signals for you to take for maximum profits.

Telegram Channels and Group for Signals

Here is a list of some of the channels I’ve joined getting promising returns, 

Jack The Golden Riptide

Forex Angel

Felix Golden Fortuna

School of Trades

Keep in mind some of these channels do not allow copy trading directly in their free channel so you’ll have to manually do some of them yourself. They also have paid channels where some of them allow copy trading, off hand, I know Forex Angel allows for that but I cannot confirm for Felix nor School of Trades. 

Copy Trading Software 

Copy Trading Software will allow you to take these signals and place them as a trade in your broker. 

This will give you the ability to take trades even when you are not looking at your computer or phone and even when you are sleeping, which is the ultimate goal for passive or automated income.

My recommendation for Copy Trading Software is Telegram Connector, which takes the signal from the Telegram channel/group you are in and immediately makes the trade with your online broker. I have not had any problems with them and the support has been very helpful. Try them out and see for yourself here.

Choose an Online Broker

You’ll need to join a broker to ensure you can trade the signals provided with your capital, there are regulated and unregulated brokers, usually to be safe you can go with a regulated broker as unregulated brokers do not have anything holding them back from disappearing with your funds, nor any government agencies ensuring they follow best practices. However, unregulated brokers do have the advantage of not having to comply with many requirements of governing bodies, and can allow benefits of lower capital entry to start trading and higher leverages to take on trades. 

Some brokers that I’ve found that accept cryptocurrencies as deposits and withdrawals and have given me a great experience are, 

EagleFX (Unregulated)

OctaFX (Unregulated)

HotForex (Regulated)

I’ll add more verified Brokers in this article as I test them out.

Virtual Private Server (Highly Recommended)

Finally you’ll need a virtual private server (VPS) to automate your trades. Now you can do this on your computers, but what I’ve found has become an issue is when your computer updates or shuts down in the middle of the night, or when there are power outages, you lose all that time that you could have made money copying those signals and trading. I’ve also found that it’s cheaper to get a VPS rather than use the electricity to keep your computer on, and also it saves on the wear and tear of the system. 

A final reason is that great VPS providers tend to be close to the trading markets and your brokers, so this allows them to have an extremely fast response time once the signal comes in. In many cases, this could be the difference between having a trade that goes from being a good one, to being a great one. 

The VPS that I trust and have been using is ForexVPS, in my time using them, they have had no shutdowns, and support has been responsive as ever. In fact, I’ve been through three all day power outages since using them, and I was happy to know I had my VPS churning out profits for me even though there was no power or internet in my area. 

You can check out and get your VPS at ForexVPS here.

Further Assistance 

You can check out some videos to further explain how to get this all set up here.

Setup for Telegram Connector

Installation video for Telegram Connector

How to Set up ForexVPS For Trading

How to set up your first Forex VPS for Trading

As I find and create more videos to assist with setting everything up, I will show it here.

DeFi Investment Groups for Live Updates

If you are interested in getting live updates on new opportunities to check out, then join my DeFi Investment Groups on Whatsapp and Telegram for more information. As always, I test out and research opportunities rigourously first before suggesting them in the group.

Conclusion

I hope that you have found this blog useful to you for ways you can invest in defi and not be scammed again. 

These returns are not as massive as what many platforms may be promising but always remember, if you can become a billionaire with it in a couple of years and with less than a couple hundred dollars, then it surely is not real and everyone would be doing it. 

Making money and being successful in this field takes time, patience, resilience, and persistence. 

Once you understand it is all a learning process but you can learn and earn and it’s an upward trajectory in the long term, you can go far and do well in this space.

Always remember as well to never invest more than you can afford to lose, in any given situation. It’s always good to test, make back your principle, and then withdraw and utilise profits to continue to grow your accounts. 

I will be updating this blog frequently with more information as I find it. 

However, if you ever want to reach out to book a consultation, you can reach me at mikkell@mikkellkhan.com and we can schedule one to help you further on your defi journey. 

Take care, good fortunes and godspeed!


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