Fast DeFi Tutorial
A Very Complete And Concise List Of Things To Do In The DeFi Space
Our thanks to @tomuky at FastDeFiTutorial.com for putting together this fine DeFi tutorial
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The Fastest DeFi Tutorial on Earth
Overview
List of steps straight to DeFi
- First thing to try
- What is DeFi
- The must-knows
- First: Get a wallet
- Check gas prices
- Earn interest on Compound
- Swap tokens on Uniswap
- Track your DeFi portfolio
- Play a no-loss lottery
- Earn fees on Uniswap
- Track liquidity on APY.Vision
- Get started with Polygon
- Save with mStable
- Save with Curve
- Earn interest on Aave
- Cheap swaps on Quickswap
- Earn fees on Quickswap
- Earn fees on Balancer
- Invest in a DeFi index: DPI
- Get BTC
onto Ethereum ⟠
- Bring DOGE
to DeFi
- Earn on BTC
& ETH ⟠ in pools
- Cheap swaps on Loopring
- Onchain leverage with Aave
What is DeFi ![🤔](https://s.w.org/images/core/emoji/13.1.0/svg/1f914.svg)
- Short for Decentralized Finance
- Financial products and services built as immutable verifiable code
- Most of DeFi is built on the Ethereum blockchain
- No intermediaries or middle-men
- Available to anyone in the world with an internet connection
The must-knows ![💡](https://s.w.org/images/core/emoji/13.1.0/svg/1f4a1.svg)
- Always try things with small amounts of money before using larger amounts
- You need ether (ETH) to pay for gas to transact on the Ethereum network
- There are gas fees on transactions that will negate any positive yield in DeFi when using small amounts of money, but it is a safe way to learn before using larger amounts of money
- Make sure network gas prices aren’t too high for trying things
- Never share your seed phrase or store them on your phone or computer. Write it down on paper!
- Only send ether to an ether address, bitcoin to a bitcoin addresses, etc!
- However, you can send and receive ERC20 tokens with an Ethereum address since they are programmed on the Ethereum network
- Ether (ETH) is the asset and Ethereum is the network
First: Get a wallet ![💰](https://s.w.org/images/core/emoji/13.1.0/svg/1f4b0.svg)
Start here. You need a wallet to interact with DeFi protocols.
- Get a Coinbase account
- Connect your checking account
- Buy maybe $10-$50 worth of ETH (may take some days for funds to clear bank)
- Download MetaMask mobile app (DeFi on mobile)
- Choose Create a new wallet
- Follow on-screen instructions, write down seed phrase on paper
- Download MetaMask Google Chrome extension (DeFi on desktop)
- Choose restore wallet from seed phrase (same one from MetaMask mobile)
- Once ETH is cleared to send off Coinbase, send to your wallet address
- To get address: touch Add Funds on mobile or click account name in Chrome extension
Now you are ready to try things.
Check gas prices ![⛽](https://s.w.org/images/core/emoji/13.1.0/svg/26fd.svg)
The network can be busy and cost too much to try things with small amounts
- Go to gas.blocknative.com
- This shows gas prices for how fast you want your transactions to be confirmed
- If the Base Fee is above 40, perhaps wait for another time when the network is less busy
- You can set up an email alert when gas is low. Go to 9000.hal.xyz and sign in using MetaMask
- Now go to 9000.hal.xyz/recipes/chainlink-track-gas-price to create a trigger
- Type in 40 to be notified when gas is less than 40
- Enable Send Email and type in your email and a subject for the emails
- Name this trigger at bottom left, then click Create
- Now you’ll get an email when gas is lower so you know when to come back to try things
Try: Earn interest on Compound ![📈](https://s.w.org/images/core/emoji/13.1.0/svg/1f4c8.svg)
Supply assets to the protocol and earn interest. No minimum. Withdraw anytime.
- Go to app.compound.finance in Chrome (with MetaMask extension ready)
- Click to use MetaMask wallet, approve popup
- Notice the Supply Markets APY for lending particular assets
- Take special notice of stablecoin markets such as USDC, DAI, and USDT
- Stablecoins are designed to always be worth $1 so you can consider them US Dollars in crypto
- Click on an asset to supply (perhaps you need to swap for the one you want to supply)
- Type in amount you wish to supply
- You may have to click Enable for that asset first, confirm that transaction
- Click Supply and then confirm the transaction
- Done. Read about how compound.finance works
- Or take a short lesson and earn $10 of $COMP tokens from Coinbase
Try: Swap tokens on Uniswap ![🦄](https://s.w.org/images/core/emoji/13.1.0/svg/1f984.svg)
Swap a token for another token straight from your wallet
- Go to app.uniswap.org/#/swap in Chrome (with MetaMask extension ready to go)
- Click connect wallet, choose MetaMask wallet, click connect
- Select ETH as the from token
- Select DAI, or any token you’d like, as the to token
- Type in amount of ETH (perhaps 0.01)
- Click to approve new tokens (one time approval per token)
- Click swap and approve transaction
- When transaction is complete, token will be in your wallet
Try: Track your DeFi portfolio ![📊](https://s.w.org/images/core/emoji/13.1.0/svg/1f4ca.svg)
All you need is your public Ethereum address and they map it all out for you
- Get your address by clicking MetaMask extension and click Account to copy public address
- There are a few options:
- zapper.fi then click to connect wallet or paste in address
- zerion.io then click to connect wallet or click Addresses to paste in your address
- debank.com then paste in your address
Try: Play a no-loss lottery ![🎟](https://s.w.org/images/core/emoji/13.1.0/svg/1f39f.svg)
Enter to win all the interest earned on the pool
- Go to app.pooltogether.com in Chrome (with MetaMask)
- Click Account, click Connect Wallet, click Meta Mask, confirm any popups
- Click Pools and click Get tickets
- Enter number of tickets. (Need DAI? Swap for some on Uniswap) Click continue.
- Here are 2 transactions to confirm: Allow DAI and then Deposit
- All set! Weekly drawings are Friday evenings. Good luck!
Try: Supply liquidity and earn fees on Uniswap ![🦄](https://s.w.org/images/core/emoji/13.1.0/svg/1f984.svg)
Supply liquidity to a trading pool and earn the fees from people paying to swap
- Understand what
Impermanent Loss
is first
- We will put 2 tokens of equal total USD value into a 50/50 pool for others to swap between
- A good resource to see which pools are earning the most fees: info.uniswap.org/pairs
- A good pool that earns decent APY from fees is the USDC-ETH pool
- If you have, for example, $50 of USDC and $50 of ETH, you can try the next step
- Go to app.uniswap.org/add
- Enter $50 for USDC and ETH should prefill with $50 worth of ETH
- Click to Approve (for USDC), then click Supply. Done!
- If you don’t have 2 tokens to supply, you can swap for what you need first on Uniswap
- Track your liquidity position on Zapper.fi
and APY.Vision
Try: Track impermanent loss on APY.Vision ![👀](https://s.w.org/images/core/emoji/13.1.0/svg/1f440.svg)
Connect or enter your wallet address to get info on your liquidity positions
- Go to APY.Vision
- Scroll to find and click Connect Wallet
- Choose Meta Mask, confirm popup
- You should now see all your liquidity positions from popular protocols
- “Liquidity Pool Gains” is your $ loss/gain from asset allocation changes being in the pool
Try: Start using Polygon Network
Send extremely cheap transactions on the Polygon Network (formerly Matic)
Polygon is a sidechain that does periodic checkpoints on Ethereum
- Go to wallet.matic.network
- For USDC, search for it and click Deposit (for ETH do Ether (PoS-WETH))
- Type amount to deposit from Ethereum, click Deposit to Matic (~8 mins)
- This is an Ethereum transaction so need to pay gas
to confirm
- Next go to Quickswap and click Switch to Matic (might say Polygon)
- MetaMask will prompt to add Polygon (formerly Matic) as a network, click to Approve and connect
- Need Matic tokens to pay for txs, go to matic.supply to claim free Matic
- Now you can try things on the Polygon network!
- A couple of notes
- Toggle between Ethereum and Matic networks in Metamask dropdown
- Pay for transactions with MATIC on Polygon Network
- Your Polygon address = your Ethereum address
Never send tokens to Polygon from an exchange wallet, like Coinbase
- Polygon is extremely cheap transactions
- Learn more about the Polygon Network
Try: Save with mStable ![🧮](https://s.w.org/images/core/emoji/13.1.0/svg/1f9ee.svg)
Deposit stablecoins into mStable’s high-interest savings contract
Withdraw anytime. Supply any amount of value to try.
- Check current APY on app.mStable.org/musd/save
- Buy some USDC in the amount you want to save on Coinbase (no fees!)
- Send the USDC to your Ethereum address (need some ETH too)
- Now send the USDC to the Polygon (formerly Matic) Network
- Go to app.mStable.org/musd/save, click connect wallet
- Choose Polygon in top dropdown and change network in MetaMask to Polygon (formerly Matic)
- Enter USDC amount to deposit, click Mint & Save
- Might have to click to approve exact amount, confirm tx
- Done! You now hold imUSD tokens which are interest-bearing mUSD (mUSD = USDC)
- Explore the numbers behind the APY on app.mStable.org/musd/stats
Try: Save with Curve ![🔴](https://s.w.org/images/core/emoji/13.1.0/svg/1f534.svg)
Deposit stablecoins into Curve’s efficient stablecoin market
Withdraw anytime. Supply any amount of value to try.
- Check current APY on polygon.curve.fi
- Buy some USDC in the amount you want to save on Coinbase (no fees!)
- Send the USDC to your MetaMask Ethereum address (need some ETH too)
- Now send the USDC to the Polygon (formerly Matic) Network
- Go to polygon.curve.fi/aave/deposit and click to connect wallet
- Might have to change network in your MetaMask to Polygon (formerly Matic)
- Enter amount of USDC to deposit, click Deposit & stake in gauge, confirm txs
- Done! You deposit to earn trading fees and you stake in gauge to earn additional rewards
- To see your deposit, go to polygon.curve.fi and click My Dashboard
- Deposit will also show on zapper.fi
Try: Earn interest on Aave ![👻](https://s.w.org/images/core/emoji/13.1.0/svg/1f47b.svg)
Supply tokens to Aave’s Polygon Market with cheap transactions
Withdraw anytime. Supply any amount of value to try.
- Check app.aave.com/markets and select Polygon Market to see current rates
- Get the tokens you want to deposit in your Polygon (formerly Matic) wallet
- Go back to the Aave Polygon Market and click the token you want to deposit
- Click the Deposit button, enter amount, then Continue
- For tokens other than ETH, you’ll need to Approve first time (near $0.00 cost)
- Once transaction is complete, now click Deposit and confirm transaction
- Done! Go to My Dashboard to see your deposit earning interest
- A couple of notes
- You’ll receive amTokens (amDAI for depositing DAI) representing your deposit
- Follow same steps for Aave’s Ethereum Layer 1 Markets, txs cost more
Try: Swap tokens with extremely cheap gas on Quickswap ![🐉](https://s.w.org/images/core/emoji/13.1.0/svg/1f409.svg)
Quickswap on Matic Network lets you swap tokens with extremely cheap gas
- Send tokens to your Layer 2 Matic Wallet
- Recommended to send USDC or DAI to swap with
- Connect Metamask to Matic Network and go to Quickswap.exchange
- Need MATIC to pay for txs. Need some? Click MATIC top right to claim free MATIC
- Click to choose token to swap, might have to “Select a list” and choose Quickswap’s
- Now choose token to swap, then choose token to receive (maybe ETH)
- May have to Approve Token first, then click Swap
- Done! Notice how small the cost of gas was. Less than $0.001!
- A couple of notes
- Yes, Quickswap UI is a clone of Uniswap UI
- Quickswap is growing in liquidity to make it more useful
- Until then be weary of slippage and price impacts on trades
- Not many tokens available yet
- Ethereum tokens need mapped to Matic. See the list here
Try: Earn fees by providing liquidity to Quickswap ![🐉](https://s.w.org/images/core/emoji/13.1.0/svg/1f409.svg)
Become a market maker and earn fees from people swapping tokens
Assets will continuously rebalance to 50/50 in value
- Check the current top pools and note APY’s (based on last 24 hrs of fees)
- Send USDC from your Ethereum wallet to your Matic wallet (one-time configuration)
- Get free MATIC tokens to pay for txs by clicking MATIC on top of Quickswap page
- Swap on Quickswap to get 50/50 in tokens of the pool you want (ex: $400 to ETH and $400 to wBTC)
- Click the pool on info.quickswap.exchange/pairs and click Add Liquidity
- Enter the 2 tokens to add in equal values, click Supply
- Done! You’re now earning swap fees as a market maker
- A couple of notes
- Be aware of
Impermanent Loss
- Monitor your position using apy.vision
- Bonus: choose a pool that is currently earning QUICK rewards, deposit the pool tokens you receive after supplying liquidity
- Be aware of
Try: Earn fees on Balancer ![⚖️](https://s.w.org/images/core/emoji/13.1.0/svg/2696.svg)
Automated portfolio manager and trading platform
Dynamic weights beyond just 50/50 pools like Uniswap
Earn fees when others rebalance your pool with swaps
- Go to app.balancer.fi and choose Polygon on top left
- Click to Connect Wallet. Might have to accept switch to Polygon Network
- Scroll to see available pools and APY’s. Try this 33/33/33 pool: ETH/BTC/USDC
- Send needed tokens to your Polygon Wallet (you could deposit a single token into the pool and it will swap into the other tokens for you. Example: deposit $90 of USDC and it will convert to $30 USDC, $30 BTC, and $30 ETH)
- Go to ETH/BTC/USDC and type amount to deposit
- Click to approve each token and click to confirm deposit
- Done! Now you own a portion of the 30/30/30 ETH/BTC/USDC pool earning fees
- For this particular pool, you also earn BAL tokens automatically!
- A couple of notes
- Be aware of
Impermanent Loss
- As prices change, balances will adjust to meet the weights
- Monitor your position with apy.vision
- See your deposit on zapper.fi
- Be aware of
Try: Invest in DeFi with a single token – DPI ![💲](https://s.w.org/images/core/emoji/13.1.0/svg/1f4b2.svg)
DeFi Pulse Index (DPI) is a capitalization-weighted index that tracks top DeFi tokens
- Go to Coinbase and buy dollar amount of ETH you want of DPI (add $2-$5 for gas)
- Once the ETH is available to send off Coinbase, send it to your wallet
- Go to Uniswap
to swap the ETH for DPI
- Enter amount of ETH to swap for DPI, click swap, confirm transaction
- Done. DPI will be in your wallet once transaction is confirmed
- Information on the DPI token: TokenSets.com/portfolio/dpi
Try: Get your BTC
onto Ethereum
Wrap your bitcoin onto the Ethereum network and unlock yield possibilities
- Coinbase offers BTC
wBTC conversion for a tiny fee. Go to Coinbase and look for Convert
- If your BTC is not on Coinbase, you could send your BTC to Coinbase
- Send wBTC to your Ethereum address. Network fee could be high so check gas prices
- Your BTC (as wrapped BTC, or wBTC) is now ready to use in DeFi on Ethereum
Try: Earn yield on your BTC
& ETH ⟠ in a pool ![💧](https://s.w.org/images/core/emoji/13.1.0/svg/1f4a7.svg)
Supply BTC and ETH to a 50/50 pool and earn fees as a market maker
Your BTC and ETH will automatically rebalance to stay 50/50 in dollar value
- Get 50/50 ETH and wBTC (wrapped BTC) in your wallet (ex: $400 in ETH and $400 in wBTC)
- Note: this should not include the ETH in your wallet to pay for transactions
- If gas prices
are okay, go to the Uniswap
ETH/wBTC pool
- Make sure your wallet is connected at top right of page
- Enter amount of wBTC (or click your balance) and Uniswap will fill in the ETH
- Click to Approve wBTC and confirm transaction, then click Supply and confirm transaction
- Finished! You are now a market maker earning fees
- A couple of notes
- Be aware of what
Impermanent Loss
is
- You will receive back a UNI-V2 token that represents your share of the pool. Keep it!
- Your amount of ETH and wBTC will rebalance over time to stay 50/50 in dollar value
- You earn fees from people swapping between the 2, paid in ETH and wBTC
- Fees are paid into the pool growing the liquidity which you own a share of
- Check your APY (based on 24hr fees) at info.uniswap.org/pairs
- Track the performance of the pool
- Be aware of what
Try: Swap with cheap gas on Loopring ![🌀](https://s.w.org/images/core/emoji/13.1.0/svg/1f300.svg)
Activate your address on Loopring’s Layer 2 and swap with very cheap txs
- Check which pairs are available on loopring.io/swap
- Get the amount you want to swap with in ETH in your wallet
- Go to loopring.io/swap and click your address at top right
- Click Activate Layer-2 and read. Enter amount in ETH you want to use to swap with
- Click Deposit To Activate Layer-2 and confirm tx (this will essentially be the only gas spent)
- Few minutes later, you’ll see your deposit on loopring.io/account
- Once your ETH shows up, you can now swap on loopring.io/swap
- For buying DeFi Pulse Index, choose From ETH and To DPI, and enter amount of ETH
- Click Swap. Done! Your DPI will show up in your Loopring Layer 2 account
- A couple of notes
- The one tx to deposit ETH to Loopring’s Layer 2 is cheaper than just swapping on Layer 1
Never send tokens to Loopring from an exchange wallet, like Coinbase
- With cheap swaps, you could even dollar cost average instead of a lump-sum buy
- Explore other available tokens to swap by clicking the dropdown on loopring.io/swap
- Coming back to Loopring after awhile, you’ll need to click to unlock your address (no gas)
- You can withdraw from Loopring’s Layer 2 back to Layer 1
Try: Open on-chain leverage on ETH with Aave ![👻](https://s.w.org/images/core/emoji/13.1.0/svg/1f47b.svg)
Get more exposure to price movements without buying more
Supply ETH, borrow DAI, buy ETH with DAI, repeat
- Get ETH onto your Polygon (formerly Matic) wallet
- Go to app.aave.com/markets and select Polygon Market, choose WETH
- Click Deposit, type in amount, click Continue, click Approve, then Deposit
- Go to My Dashboard to make sure WETH is enabled as collateral
- Go back to Markets and choose DAI, then click Borrow
- Borrow amount to achieve Health Factor of around 2.0, click Continue
- Pick Variable or Stable APR (note the interest you’ll be paying), click Continue, then Borrow
- You’ve borrowed DAI to do whatever you want with!
- Go to quickswap.exchange/swap and swap for ETH
- Take that ETH, repeat the process: supply ETH, borrow DAI, swap for ETH
- A couple of notes
If your Health Factor falls below 1.00, you could get liquidated! Ex: Health Factor of 2.00 would be in danger of being liquidated with a 50% price drop in ETH.
- Use My Dashboard to see your position
- When supplying Tokens to Aave’s Polygon market, you get amTokens in return representing your deposit. Whoever holds the amTokens, owns the deposit.
- To repay borrowed tokens, go to My Dashboard and look for Repay
- Same process is available with Aave Ethereum Market but txs cost much more
Try: Bring DOGE
to DeFi
Bridge assets like DOGE between blockchains to use in DeFi
- Have an Ethereum MetaMask wallet
- Set up your wallet with Polygon (if already set up, toggle MetaMask network to Polygon)
- Go to bridge.renproject.io/mint
- Select DOGE to send to Polygon, then click Connect wallet, then Next
- Enter amount of DOGE to send to calculate fees
- Have at least 1 MATIC token in the destination wallet (check the box)
- Click View Gateway Address, read warning, click Continue
- Send DOGE to this provided address from your DOGE wallet
- After a few minutes you have to click to claim the DOGE (now renDOGE) on Polygon
- A couple of notes
Try with a small amount of DOGE for your first attempt
- Now try adding it to the renDOGE/ETH Quickswap pool to earn fees
- Bonus: you can stake your renDOGE/ETH position to earn QUICK rewards
Coming soon: Onramp money direclty onto Polygon with Transak
More coming soon
Fast DeFi Tutorial
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