I Earned $3,471 Without Lifting a Finger… That’s the Power of DeFi

You know that feeling when you slide on a pair of jeans, and you shove your hands in the pockets to straighten them out because the pockets are all bunched up…and you find a $20 bill you didn’t know you had? 

Well, something like that happened to me…except I found several thousand dollars. 

It wasn’t in my jeans, mind you. It was in a cryptocurrency account I hadn’t really checked on much over this past year.  

I am generally a buy-and-hold investor—both for stocks and crypto—and I operate from so many accounts that I’d sort of just put this particular account on auto-pilot.  

Just over a year ago, I’d deposited into that account about $3,195 worth of Ethereum, the world’s #2 cryptocurrency after bitcoin. Next, I “staked” that Ethereum…meaning I put the Ethereum into what is essentially the crypto version of a certificate of deposit, with the interest paid out in more Ethereum. 

Then I went about my merry little 2021.  

And I ended up earning in interest Ethereum worth $3,471…more than the value of my initial stake. (That’s based on Ethereum at $4,000. If the price falls, the value of my Ethereum payments falls. Or, if Ethereum rises, then my $3,471 will be even more.) 

We’ll come back to that. But first… 

The past year might rightly be described in hindsight as The Year of DeFi. 

If you’re not familiar with the term, DeFi, or decentralized finance, refers to saving and borrowing but conducted using cryptocurrencies. And it has exploded in popularity.  

“Total value locked,” a crypto term for how much money has been invested into DeFi, is now around $100 billion. This time last year, we were at $25 billion. And when I started my DeFi adventures in early 2020, total locked value was pushing up against just $10 billion. 

As these numbers show, we are seeing the rise of a new financial order and the slow, unstoppable decline of traditional finance.  

My accidental discovery of several thousand dollars only proves the point. 

When I made my initial deposit of $3,195 worth of Ethereum, I expected I’d pick up a few hundred dollars or so in additional crypto.  

However, Ethereum’s price has soared since I opened the account—from about $750 per token to around $4,000 today—so the principle I deposited skyrocketed and the compounded interest I earned in ETH mushroomed in value, too.  

So, interest included, my $3,195 is now worth more than $20,000…a gain of over 500% in a single year.  

If I’d put that same $3,195 to work at a traditional bank, I would have amassed less than $20 across the year—and that’s in one of those high-yield bank accounts paying 0.6%.  

If I’d stuck it in a basic savings account, I would have earned…$0.32. 

Here’s the thing: Even if Ethereum hadn’t moved in price at all this year, I’d still have earned more at the “crypto-bank” because the interest rate I was getting was far above 0.6%. 

If you’re old enough to remember the Pig in a Poke game on The Price Is Right (Bob Barker edition, of course), you will know the “whomp, whomp, whomp” theme of a loser. Go ahead and mentally insert that sound effect now as you think about your local or online bank… 

We are living in an era now where we no longer have to accept the tiny amount of interest that traditional banks offer us.  

We can head into the DeFi world and find far—far!—better alternatives. And many of them are basically as safe as a savings account. 

In the example above, I was staking Ethereum and, of course, that can be a volatile asset to own. But I have also put to work so-called stablecoins—cryptocurrencies that tightly shadow the U.S. dollar. On any given day, they fluctuate in value by fractions of a penny. 

I am picking up returns of 9% in one account, 10.3% in another, and 10% in a third. Those are all on stablecoins, which again are basically dollars. (Find more details on those in the DeFi report available as part of your subscription.) 

On various other crypto I own, I am pocketing returns of 7%, 8.9%, 8%, and 4.5%. That’s just on basic deposits. 

Some of this can be a tad challenging for a beginner, yes. But, then again, I was a beginner once, too. No one flies into flying. We all learn to crawl and walk first.  

I saw the opportunity emerging. I saw the inevitable end goal for the economy, society, and what the internet will become. I wanted to learn because I know that every new age spawns tremendous wealth for those who embrace it early. 

This is the dawning of that new age. 

That money I found in my digital jeans, that’s just the beginning. Crazy as it sounds, I can see the path that will 500x to 1,000x my money as we go forward. No hype.