Stake - Compound - Track
Starting out in the world of Decentralised Finance (DeFi)
We have all been there at one point or another. It could be from a YouTube video or some random crypto article that you heard the term DeFi.
Next came the curiousity and the first DeFi platform that you visited online. Once you saw the advertised returns, it didn’t take long before the first deposit of fiat is sent to the exchanges so that you could try it out for yourself.
Since DeFi is still pretty much a wilder west than the traditional crypto that everyone knows, it can be a bit difficult to navigate for someone who hasn’t had someone to help almost every step of the way.
Myself, being a chat moderator at the Telegram group for https://apeswap.finance, we occasionally receive help requests from new users and though we try to help to the best of our abilities, somehow I felt an article like this would be useful for anyone just starting up in DeFi.
I strongly recommend a read-through even though you are a veteran in the DeFi space. There is no perfect or right way to invest and I am always open to listen to different methods employed by others. Information, though free, empowers better decision making and sharing it requires little to no effort. If there is any way methods here can be improved, feel free to share it.
The very first decision that is faced by anyone is actually one of the most important.
“Which platform should I put my money into?”
There are a lot of platforms spread out across the Ethereum, Polygon and Binance Smart Chain amongst others. In my opinion, the crux of this dilemma is only of one factor — security.
No matter how good the APRs or how high the native token prices, all these are moot if the platform or it’s smart contracts are vulnerable. This may lead to funds being pulled out without the users' permission (rugpull) or exploited to have their USD value crashed/dumped (flash loan exploits).
There are, however, DeFi users who swear by these risky platforms with high APRs. They will get in early by staking huge amounts of non-native tokens and dump the rewards as soon as they receive them. When it becomes no longer lucrative, they will leave the platform and the remaining users who have gotten in late will be left trying to rebuild.
But I digress.
Let’s take ApeSwap, which is in my opinion a safe platform to invest in, as an example. In this article, I’ll be sharing the steps on how to go about staking. Staking, for me, is simply the deposit of a single token - in this case, BANANA - in the BANANA pool so that it will generate steady passive income.
All you need to do is to buy/swap for BANANA at the ApeSwap exchange and once you are ready, authorise the Pool above and deposit BANANA.
As you can see, the advertised APR is currently at 127% p.a. This means that for every USD$1000 in value of BANANAs deposited, you should be earning an approximate value of USD$3.50 in BANANAs per day.
Yes, you didn’t read it incorrectly. That’s USD$3.50 a day.
Some people might ask, that is more than double of my initial investment if I leave it there for a year!
They aren’t wrong mathematically. However, in the crypto space, many of us live 3 days at a time. APRs are dynamic, and people change staking pools very often. It’s uncommon to hear of someone expecting to stake for a full year.
Every person who stakes BANANA is also closely watching it’s prices. Everyone dreams of a parabolic climb to experience the adrenalin rush of a fast appreciating asset.
Most times on ApeSwap, the users are just staking and once substantial rewards are generated, they are claimed and restaked for more rewards in the next cycle.
However, that changed recently.
On the 20th May 2021, a group of developers close to the ApeSwap team launched their Yield Aggregator/Optimiser - https://aperocket.finance to allow ApeSwap to earn additional rewards in the form of the SPACE token by staking their BANANAs at ApeRocket instead.
In addition to enjoying more rewards, staking at ApeRocket does not require any manual intervention to claim and restake rewards. The BANANA pool is autocompounding, which means that users can just stake it without checking back so often.
I still recommend logging in once a while or join the ApeRocket Telegram group - https://t.me/ApeRocket to stay up to date on news, especially if it’s news that may affect the pool that you are staking in. There is a rare chance that a new pool will be created and users will be advised to move to the new pool manually.
Another question that we receive very regularly from users is how often should rewards in an autocompounding pool be claimed?
In theory, the funds can be left as it is since it is already being autocompounded by ApeRocket. Peesonally, I would usually claim the rewards once they are in excess of USD$15 (~5 BANANAs at the time of this writing)
That’s because I simply like to restake the SPACE token rewards into the SPACE pool, where I can earn some WBNB which is then used to pay for fees of using the BSC network.
The next section is a contentious one. Investing isn’t just about putting money where it can work for you. A good investor must have tools that are at his or her fingertips to immediately relay information on how the investment is doing.
Though this article focuses on the simple process of staking and compounding, there is a strong value proposition to use trackers, especially if you have staked at multiple platforms. A small list of ApeSwap official partners that have token staking facilities can be seen below under “Farm & Pool Partners”.
As for official ApeSwap tracker apps, ApeBoard, JDIYield and Yieldwatch are official partners.
A brief example above of the ApeBoard UI.
JDIYield example above. It is also good to know that JDIYield provides additional services to users. Upon connecting your wallet, you can actually harvest or claim rewards directly from their site across all supported platforms.
They also have a “Token Approvals” section where you can view all the permissions that you have granted to platforms in the past with regards to withdrawing and spending funds from your wallet.
Permissions can be revoked especially if you have had to allow questionable platforms access to your wallet.
They also have an upcoming PRO plan which requires an amount of JDI tokens kept in wallet in order to access PRO only features.
Ah, my personal favorite of all the trackers. YieldWatch provides an easy and simple view of all your farms and pools for supported platforms.
PRO plan is activated by having WATCH tokens in wallet, staked or in liquidity pools. It loads fast and is perfect for that busy user who wants to grab a quick glance on their DeFi investments as and when needed.
Although this article may not be as comprehensive as it can be, I purposely arranged it in this fashion so that you can help bring in more new users to this space and start them out by sharing this article with them.
As usual, feel free to join me in the ApeSwap Telegram - https://t.me/ape_swap. I am always active during Asian hours trying my best to help with queries to the best that I can.
Monetary contributions are appreciated. It would be great if you could ape in some BANANAs and add a small stake to the pool at ApeSwap.
Thank you once again for spending your precious time to read through.
Derek (JP)
