CeFi Slowly Rendered Useless

avatar

Many people and businesses involved in the cryptocurrency world felt hard the successive waves of hits this young industry has endured during this bear market.

While the expression "not your keys, not your crypto" has been with us for many years already, the majority of people remained with a traditional finance mentality and entrusted their crypto to centralized exchanges and services.

Maybe not surprisingly, they were the hardest hit during this bear market. What was shocking was the lack of safeguards most of these businesses operated under as if we would live in a perpetual bull cycle.

I'm not sure how many of their customers got the message yet, especially the little ones who look for the easiest option available. They're still expecting governments to step in and do their job for them. If that's what they want, they should stay in the fiat world! There are plenty of rules and regulations in that space to make sure they remain slaves until they die and after that (children do inherit their parents' debts as well as assets, after all).

But here I am about to go for a rant when the purpose of this post is different.

Some of the Centralized Finance (CeFi) entities that got hit hard in the crypto space - to the point of declaring bankruptcy - during this bear market, were used by their customers for the easiness to obtain a yield on something like bitcoin, without worrying about impermanent loss or working with wrapped tokens instead of native ones.

It turned out that trusting your bitcoin to such entities was a higher risk than liquidity pools are (unless you went full degen on your choices).

But for anyone with an aversion toward impermanent loss or wrapped tokens, there is now an option to earn a yield on native bitcoin (and not only) using a "permissionless, open-source, decentralized self-custody solution that enables users to earn an in-kind yield on native assets".

For me, this is another step in the right direction of rendering CeFi platforms almost useless.

Where do we find this option? Nope, not on Hive. It's on Thorchain.

I noticed their Savers Vaults feature a couple of days ago. For bitcoin, the yield is currently 4.25% APR (variable).
image.png

Where does the yield come from? From the swap fees and block rewards (1 part savers, 2 parts liquidity providers).

There is a fee to enter and one to exit the position to take into consideration, so if you start saving, you'd better leave it for a while to compensate for that. This fee is higher for higher amounts, so you might want to deposit in multiple transactions if the fee gets reduced this way.

Here's a very good explanatory post for Savers Vaults:
https://medium.com/thorchain/thorchain-savers-vaults-fc3f086b4057

Posted Using LeoFinance Beta

defi-growing savers-vaults thorchain bitcoin proofofbrain cent ctp hive-engine leofinance
0
0
0.000
24 comments
avatar

Disruptions create both adverse effects and learning opportunities. I think to your point people will learn from these hard experiences. Developers will create be experiences in true DeFi and savers/investors will learn to products their keys and coins. Knowing some people regulation will emerge in some form. I like what I'm learning about Thor chain. I'm still in wait and see mode. Good post. Thanks for making me think with you.

0
0
0.000
Reply
avatar

Yeah, I'm sure there will be some regulations at least to protect their "precious" fiat and control over its flow. Although, as Taskmaster remarked, they lost control of the flow of money in the world (various forms of it, like the Eurodollar system) a long time ago.

I agree, hard experiences often force people to learn and adapt.

0
0
0.000
Reply
avatar

I'm an individual user and My portfolio is down 90% from it was 1 and half year ago, the bear is hitting us hard, but there is a hope that bull will play better than bear. what you say ?

0
0
0.000
Reply
avatar

We are all seriously down in dollar terms compared to the peaks. Maybe we aren't in the red if we've been in the market for a long time, but this affects everyone.

Personally, I don't focus on the dollar value of my portfolio or I'll be always depressed. The bear market offers the opportunity to accumulate, and not only through buying, but also through earning. And Hive is great for that.

Bear and bull are the two facets of the big cycle. While bulls may not come out for some time because the economy is keeping them cautious, the market will turn at some point. Most likely not in the first half of 2023 though.

0
0
0.000
Reply
avatar

Hands down, Throchain is the best option to earn yield for people that don't want to get too deep into the DeFi rabbit hole.

I love everything they are building but those unfortunate hacks seem to have slowed down adoption a lot. Probably gonna take a while for people to regain confidence.

Posted Using LeoFinance Beta

0
0
0.000
Reply
avatar

I love everything they are building but those unfortunate hacks seem to have slowed down adoption a lot. Probably gonna take a while for people to regain confidence.

I agree. They were both on their Ethereum pools as far as I remember, right?

0
0
0.000
Reply
avatar

If I remember correctly one was ETH but the other involved a lot of different assets. Can't remember the details though.

Posted Using LeoFinance Beta

0
0
0.000
Reply
avatar

What could go wrong? I’d rather not make any interest and just let bitcoins appreciate overtime organically.

0
0
0.000
Reply
avatar

That's probably the safest option. But even cold wallets have their weaknesses.

0
0
0.000
Reply
avatar

I think many people still don't understand the concept of being financially responsible. It's easy to hand it out to another party to take care of it as we've led to believe since growing up. The reality is different and we have to learn to become financially responsible and be our own bank as it is called in the crypto space.

0
0
0.000
Reply
avatar

Absolutely! People are... lazy. But after they get burned a couple of times some (enough?) will stop taking the easy route and do what's best for them.

0
0
0.000
Reply
avatar

I personally wouldn't allow myself to be burned twice for me to understand the lesson. Only once is enough!

0
0
0.000
Reply
avatar

You're one of the people who learn fast then. Most people aren't like that, and some never (want to) learn.

0
0
0.000
Reply
avatar

We need to ride the storm and come out of this bear market.

0
0
0.000
Reply
avatar

Yes, we do. Not the most pleasant time to be in crypto, but this will pass too.

0
0
0.000
Reply
avatar

My personal opinion is that there should be two business of a human being. Because nobody knows when crypto will happen. The benefit of physical business is that you will continue to run your home comfortably.

0
0
0.000
Reply
avatar

Yes, one should remain active in both worlds, because for now they are (kept) quite separated.

0
0
0.000
Reply
avatar

I still haven't joined Thorchain but I do know that it's one of the best chains that people have promoted. Even while the tokens are in a pool, its still under your control and I think that is far better than Cefi.

Posted Using LeoFinance Beta

0
0
0.000
Reply
avatar

Even while the tokens are in a pool, its still under your control and I think that is far better than Cefi.

I think so too. However, they had some issues with hacks on their Ethereum pools. But who didn't? Apps on Ethereum and its clones were all hacked and continue to be hacked all the time. Not sure though if in Thorchain's case was a deeper problem than that (at the protocol security level). It was a big fuss at the time, but I didn't follow closely because I was not interested in Ethereum.

0
0
0.000
Reply
avatar

There are plenty of rules and regulations in that space . . .

But the regulators want to extend their influence beyond fiat.

In your assessment, how decentralized thorchain is compared to Hive?

Posted Using LeoFinance Beta

0
0
0.000
Reply
avatar
(Edited)

In your assessment, how decentralized thorchain is compared to Hive?

Less decentralized, I believe. But you can't keep native bitcoin on Hive and earn a yield. There are still tradeoffs. They point out the risks in the article I linked.

0
0
0.000
Reply