How to Invest in DeFi: The Ultimate Guide

“The numbers and pace of adoption speak for themselves.”

We’d be inclined to agree with Do Kwon — Co-Founder and CEO of Terraform Labs, a company that builds financial apps and has developed the cryptocurrency Terra — and his thoughts on the value of DeFi.

After a 20X increase in total value locked (TVL) over the course of 2020 and a user base that’s grown to over 1 million people, it’s safe to say that DeFi is the frontier of choice for those looking to invest in alternative channels.

Are you one of those investors who’s looking to diversify into something like DeFi — but just need a little guidance on how to turn those big dreams into action.

Then this is the article you need to read.

But before we go in head-first, stay tuned for a short debriefing on what it is that makes DeFi such an intriguing and sought-after asset in the financial world.

Learn More About Defi: What It Is and Why It Should Matter to You

We’ll start off slow, but don’t worry things will ramp up quickly.

First of all, “DeFi” stands for “decentralized finance.”

This “class” of digital financial products got its name because they are built on blockchains. Blockchains are decentralized databases that record transactions and aren’t controlled or managed by any central authority. Hence, they’re decentralized and so are the protocols built on them.

And that brings us to protocols. Protocols are what’s known as “smart contracts” — code-based agreements that contain the details of a transaction — that enable people to trade crypto, lend and borrow crypto coins, participate in liquidity pools, and more.

With all the essential terms explained and out of the way, it’s time to talk about why DeFi exists.

In our opinion, this is what makes it especially interesting and valuable.

DeFi sets the stage for a world without traditional brokers.

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Why does that matter?

Without these gatekeepers policing, processing, and charging fees at every turn; financial transactions become faster, more affordable, more transparent, and best of all more accessible.

Imagine being able to invest without having to meet a minimum asset threshold. Imagine taking out a loan without doing any of the paperwork.

DeFi empowers everyday investors to access new asset types, reduce their fees, improve their rates, and all around take more control over crafting their financial future.

Want to investigate DeFi further? Then check out our article “DeFi Coins and Tokens: What Every Investor Should Know.”

How to Invest in Defi: A Step-by-Step Guide

If you’re fascinated by all the opportunities DeFi could afford you, you’re off to a good start. But that’s not really the hard part, is it? The hard part comes now — turning those opportunities into reality.

However, this process can actually be quite achievable when you know which steps to take and which tools to adopt for the job.

So get ready to get started, because we’re going to give you the details for both right now.

1. Prepare a Wallet

Your crypto wallet is a digital entity where you’ll store the crypto coins that you’ll use to participate in DeFi protocols.

Choose any wallet you like. There are lists all over the internet just like this one to help you decide. Just like that article indicates, MetaMask is a popular choice and we’d also recommend it as it includes access to an exchange where you can trade DeFi coins as well as to various DeFi protocols in which you can participate.

2. Purchase Crypto Coins

Just like you need cash to invest in stocks, you need crypto coins to participate in DeFi protocols.

If your wallet is also an exchange, you can purchase crypto there. If not, here is a list of exchanges that make buying crypto pretty simple.

Currently, most protocols are built on Ethereum, so we suggest starting with Ether coins or ERC-20 tokens.

3. Get Started With Protocols

Time to dive into those protocols that make DeFi so popular!

There are protocols that enable investors to lend crypto, trade crypto, stake (or lock up) crypto for a reward, participate in liquidity pools where you’ll receive earnings when trades are made in your pools, engage in yield farming where your participation in a loan earns you interest, and more.

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This list is a good place to start if you’re researching different protocols and ecosystems in which to get involved.

The typical workflow when interacting with a protocol is to visit that protocol’s website or app, connect your wallet so that their platform can access your crypto coins, and follow their instructions to start trading, yield farming, or doing whatever else for which the protocol was built.

4. Track Your DeFi Investments — And Your Entire Portfolio — with Kubera

While you may have technically completed the investment process in the last step, we believe that no modern guide teaching you how to invest in DeFi should stop there.

So, last but not least, there’s just one final step when it comes to DeFi investing: Tracking.

In this section, we’re going to tell — and even show! — you how to track your DeFi investments alongside the rest of your financial portfolio with Kubera. Why Kubera?

Because Kubera is the only all-in-one portfolio tracker where investors can monitor and manage DeFi assets right from the same dashboard as their traditional assets.

Wanna know how?

Let’s dig in.

Create Your Profile(s) in Kubera’s All-in-One Financial Tracker

Navigate to (it’s an easily accessible desktop app), click the Sign Up button in the upper right corner, and follow the simple prompts to create your profile.

That’s all it takes before you’re ready to start tracking your entire stable of assets.

Connect Financial Accounts

This is where the cool features really get started.

Kubera was custom built to integrate with hundreds of banks, brokerages, and almost any other type of financial institution anywhere in the world (many of which you can check out here).

And, the platform automatically stays up to date with all your latest balances. All you have to do is look up a financial institution, input your login details, and watch as your dashboard fills up with all your financial accounts.

Now Add Any Individual Assets (Real Estate, Crypto, Collectibles, Etc.)

Don’t worry, you can still track any assets that weren’t taken care of in that last step.

Kubera partners with several leading asset experts (EstiBot, Zillow, etc.) so that you can track the real-time value of any real estate, vehicle, and domain investments you add to the platform.

To track crypto, all you have to do is search the wallet type and plug in the address. Kubera made this step slightly more hands on in order to remove third-party aggregators from the process and create a more secure, trustworthy, and fast connection to crypto accounts. And then there are the tickers, a unique feature that enables Kubera users to track individual stocks and even crypto coins right next to the rest of your assets.

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For all those odds and ends — family heirlooms, valuable collections, metals, and so on — that were once a bit of an intangible when it came to your wealth and net worth? Those can be monitored and managed too when you manually add their details to Kubera’s easy-to-use dashboard.

Bring Your Holdings Outside

Following user feedback, Kubera built in the capability for users to view their crypto investments in DeFi in the main dashboard and reflected in the financial charts (more on those shortly).

Just use the “Show holdings outside” button above the holdings list to see your crypto holdings as new rows in your financial dashboard.

Define Your Currency

In another impressive development, Kubera automatically displays the value of your assets in whatever preferred currency you define.

Big traveler? Managing several different portfolios under one Kubera profile? Change your default currency to see the true value of your portfolio no matter what changes or where life takes you.

Check Out Your Entire Portfolio — DeFi and All

Finally, Kubera’s modern charts give investors a picture-perfect overview of their assets so they can carefully monitor things like asset allocation, net worth change, and of course overall portfolio performance.

If you’d like to see an even more detailed (and animated) view of Kubera in action, visit the How Kubera Works page.

Or better yet, you can see Kubera in action with your actual DeFi assets when you sign up for an affordable subscription.

When it comes to how to invest in DeFi, Kubera helps take some of the unknown and the risk out of the equation with bank-level security, a promise to protect your data, and a small team that’s laser-focused on making investing not just safe but fun.

But we don’t just make money more fun for investors. If you work with a financial professional, you may be able to access Kubera through them. All they have to do is adopt Kubera’s white-label solution to upgrade and modernize their offerings for younger, more tech-savvy clients.