10. Putting Your ETH to Work
Crypto has a strong meme culture. There's an acronym in the crypto world that goes by the term HODL, which means to hold an asset in spite of price swings under the hope/belief that it will increase in value over the long term. Now taken to mean "hold on for dear life", it all started from a drunken forum post that resulted in a misspelling of the word HOLD. Since then, we are hodlers not holders. For a lot of coins, the strategy isn't such a bad one seeing as being able to trade successfully is a difficult and potentially traumatic experience.
Ethereum is changing that landscape by it's very nature, this is special because it's providing the whole ecosystem with utility. Sure you can just "hodl ether" but you can just as well put it, and a lot of it's related ERC standard tokens to work. Essentially, you can hodl and yield interest, collect rent, or auto balance your portfolio in a few clicks and often without any identity verification.
It's true I tells ya!
Let's get to it then!
Yield Interest With AAVE (3 lessons in 1)Head over to Aave and click on the Aave market. Connect your metamask wallet. If you're using a mobile, navigate to this site through your metamask browser for a seamless experience.
As beginners, let's focus on the Aaeve market for now
You'll see a bunch of coins with various different rates. We're going to generate yield on a stablecoin as part of a strategy to diversify and avoid volatility. From this list, it looks like True USD (TUSD) has the best offer on the market for now at 4.93%Now, we haven't got to the point of converting to stablecoins yet, so let's get our first extra lesson in. Now we're going to head over to uniswap.
Uniswap is a liquidity pool provider/decentralized exchange. It enables us to swap out ETH or any other ERC standard tokens with one another. You should find yourself set up with the following interface:
The simple interface of the uniswap token swap mechanism
Connect your wallet and select the amount of ETH you want to exhange for TUSD. Then, click on the select token button and search for TUSD.
You can view and set some parameters with the advanced options, but what Uniswap lays out for you will give the transaction the best shot at settling. Also, stablecoins will usually give you just that - a stable parity to the dollar.
Click on swap, make sure you take in the summary before you come to sign the transaction from your metamask wallet.
This is a perfect opportunity to get another quick lesson in. Let's get our head around the ETH fees. When you go through the transaction, there's a couple of windows that will raise questions. The first is the transaction fee in terms of gas price (gwei) and gas limit. It's not recommended to tinker with these at this point, the pre-setting should see your transaction go through. If you do want to know more about them, feel free to go down the rabbit hole and type it into a search engine.
The next screen is always worth some scrutiny, and the edits are easier and more understandable.
Click on edit above the gas fee, and you'll notice you can change the fee in line with estimated confirmation times. This is particularly useful in times of network congestion and according to the urgency of your needs. These fees don't necessarily increase the larger the transaction, meaning you can send or swap a lot of money for a small fee.
Okay, process the transaction for swapping to TUSD and in a short time you should see it appear in your metamask wallet. You can check the progress of your transaction on etherscan. If it goes through and you don't see the token, you will have it in your wallet but you'll have to add the token manually in order to see the balance by finding the "add tokens" button in your wallet.
Now - back to Aaeve! Remember we were here:
Now you have your TUSD you can click on the rate and press the deposit button. Make sure you deposit and not borrow. You have the familiarity with metamask so going through the transaction should be fairly straightforward now.
Once you've done that you can head to your dashboard in Aave and watch your money yield interest in real time.
Tokensets - Automate and Balance Your Investments
It's an understatement to say the crypto markets are volatile, alternating between extreme highs and lows on what sometimes seems like a daily basis. You could attempt to trade it to capitalize and maximize gains, but that's hard, not to mention risky and highly stressful. Although at some point we'll be covering exchanges in a bit more detail, why put yourself in that position when DeFi can do it for you?Next up is Tokensets, and because you can navigate your way through metamask and swap tokens on uniswap thanks to the lesson above, this is going to be a quick tutorial.
Connect with your metamask wallet and then go to explore sets within the tokensets website. You'll notice a few options. What you see may look slightly different if you're on a mobile device.
Play around with the navigation, but it comes down to choosing between a social trading set and a robo set. A social trading set is decided and re-balanced by a trader - real human people. A robo set is automated by rules and code. Which do you trust more? Personally I'm going with the robots.
You can filter by various time frames. Here we're going to filter by 'since inception' and keep our eye out for a consistent performance across the weeks and months. To me the idea of trading ETH back to USD and vice versa upon crossing an average is appealing. This gives me a chance of upping my holdings of ETH over time.
Click on the Set you are interested in. You'll find various information on it's terms. You don't have to buy a full set. Remember, most of the time crypto investments can be fractional. When you're happy, click on buy and go through the transaction process.
If the token doesn't show in your wallet, it will get delivered regardless of whether you can see it, It just means you need to make it visible at some point. You'll probably need to add it as a custom token by getting the set contract address:
Nice one, you executed a strategy!
Now, how do you fancy becoming a landlord?
RealT - Fractional and Frictionless Real Estate Investing
Owning property has long been considered a great investment, but out of reach for the masses. Blockchain and Ethereum are changing that. You can now invest in property and earn rent from your investment. What's more you can sell your stake back at market value in a likely much quicker way than you could via traditional methods as it opens up the market to more buyers and sellers.
Head over to RealT and create an account. Once you're in click on my account and go to ID Verification. RealT is an example of where DeFi meets the centralized world. Because property needs to be handled in the physical realm (at least for now) there is an element of centralization to this process and as such you'll have to provide real life identity and documentation in order to invest.
Once you've done this and your details have been approved, you're ready to buy. In the marketplace you'll see available properties, click on one to see various details about it.
Once you're happy, select the number of tokens you want to buy, then click on purchase tokens.
All you have to do is finalize the process by going through the familiar transaction process with your metamask account.
As with Tokensets, you'll probably need to add the token contract address to your metamask wallet (via your metamask 'add tokens' option) in order to view it. You can do this by viewing it on etherscan and copying the contract address.
You're now a partial property owner and you're rent will be distributed every 3 days in the form of a stablecoin pegged to the US dollar.
Oh it feels good!
You've just unlocked 3 different ways to manage and grow your wealth.
That's Crypto in 10, you went from knowing nothing to owning digital gold and investing on the blockchain.
Yet these are just of the few things crypto can do, this blog will continue to act as a guide, but where you go next is up to you. This is just the start of the journey.
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