Risk-Return of DeFi Investments

Welcome to our article analyzing many of the popular investments in DeFi.

Aug 10, 2021
Risk-Return of DeFi Investments

Welcome to our article analyzing many of the popular investments in DeFi.

Key Takeaways

  • There are three main ways to earn staking returns in DeFi: 1) platform fees (i.e. transaction fees), 2) interest by lending assets, or 3) inflationary token rewards;
  • In addition to price volatility on holding the tokens themselves, there is also volatility on the interest and fees received from protocols;
  • Many DeFi investments do not offer sufficient returns for their level of risk, but there are a few that do;
  • DeFi provides for an alternative way to earn passive income in lieu of services offered by centralized exchanges such as Crypto.com Earn;
  • Although the returns from investing in the DeFi space can be attractive, there are significant risks in addition to token volatility. Since DeFi is relatively new, there are risks that were previously unknown such as price oracle manipulation and attacks. Beware when deploying any funds and make sure to do ample due diligence!

Read the full PDF version of the DeFi Returns Report here.

Tags

crypto research

DeFi

investments

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