Investing with Defi in 15 Minutes
A simple Pool by Cake tutorial that earns you a $30 bonus
Defi, short for decentralized finance, is all the rage in the world of cryptocurrencies. It’s a pretty great idea: blockchain and smart contracts provide the trust and management necessary to enable distributed financial services as an alternative to centralized providers like banks.
That makes sense at a high level, right? It’s the same services provided by banks — just without the banks. Instead of putting your money into a savings account, you deposit your crypto into a wallet. Those resources are then used for all the various services that fall under the defi umbrella, like currency exchanges and lending & borrowing.
Today, we’ll look at using Pool by Cake to make money using two different methods. First, there’s the Lapis service, which earns you interest by lending your money. Cake advertises a guaranteed rate of 5% APY with the potential of up to 7.5% depending on the value of the currency. This is a conservative way to earn a decent return while holding onto your tokens.
The other service we’ll explore is liquidity mining, which advertises a mind-boggling rate of 150% — read more about liquidity mining here.
Regardless of which path you choose, you’ll earn a $30 sign-up bonus along the way. You’ll need to deposit $50 and use a referral code to claim the bonus. If you want to earn additional crypto to invest with or experiment with a smaller investment, check out the section at the very end of this article.
Here’s what we’ll cover today:
- Sign up with Cake
- Transfer $60 of BTC
- Allocate $40 toward liquidity mining
- Allocate the remaining funds to the Lapis service
Ready? Let’s go!
Create your Cake account
The first thing you need to do is sign up for an account at Cake. You receive an extra $10 bonus when a referral code is used, so the link above includes my referral code (274734). If you’re skeptical about me making a buck off you, you can skip the referral code and still earn a $20 bonus — it’s just $10 less for you!
Once you sign up, you’ll need to do the usual identity verification steps before being able to deposit funds and start earning. For me, this included uploading a government ID and utility bill. You then have to wait for the folks at Cake to verify your identity, which took less than an hour in my case.
Deposit some funds
Once you’re identity’s verified, you can deposit some funds. You earn the sign-up bonus when you deposit USD 50. It’s unclear if that’s after fees or not, so I’ll deposit $60 in the tutorial here to be safe.
They provide an option to buy BTC directly on the site using a credit card. That seems simple, and I was going to do it for simplicity in this tutorial. It requires you to go through a rather intense checkout process, though. They bounce you to their credit card provider, and it requires you to go through the same ID and address verification steps. And, even after I did all that, the transactions failed with two different credit cards!
Alternatively, you can send money from an existing wallet, like Coinbase. You’re welcome to give the direct credit card purchase a shot, but this feels easier. It just needs to be an amount greater than USD 50 to earn the sign-up bonus. Cake’s documentation states that they pay bonuses on Mondays, in case you’re wondering when you'll receive it. (I was confused about when it would show up.)
To deposit from a wallet, click your profile picture in the corner, select Balances, then click the Deposit button. In my example, I’ll be using Bitcoin.
From here, grab the address and send funds from the wallet of your choice.
Invest in liquidity mining
To participate in liquidity mining, all you need to do is add liquidity. This is done by providing equal amounts of currency pairs to a shared pool. You will receive rewards in the form of both currencies provided.
Today, I’m going to invest in BTC-DFI because it’s currently advertising a 150% APY, and you can’t really go wrong with BTC right now. (And DFI isn’t looking so bad itself!)
To add liquidity, we need both currencies, though. We only have BTC so far, so we need to convert half of what we want to invest into DFI.
Head back over to your wallet balances, and click the BUY button next to DeFi. Now it’s time to do some math! I want to invest $40 of my $60 into liquidity mining. That means I need $20 BTC and $20 DFI, so I have to convert approximately one-third of my BTC balance to DFI.
$60 bought me 0.00133 BTC, so I’ll spend 0.00044 BTC on DFI. Important: Make sure you enable the option “Immediately sell staking shares after swap,” or the DFI tokens will automatically be allocated to staking. With today’s rate, they’ll earn 37% APY — not bad! — but you can’t add them to the liquidity pool while they’re being used for staking.
Now that we have our two currencies, we can add them to the liquidity pool. Use the Liquidity Mining link at the top to access the pools, and click the ADD LIQUIDITY button on the BTC-DFI card.
We want to add all of our DFI, so simply click the MAX button on DFI. This will automatically add all available DFI against an equal amount of BTC. Click the ADD button at the bottom, and you’re done!
Invest in Lapis services
Investing in Lapis services is even easier than investing in liquidity mining because you only need a single currency. You’ll earn a guaranteed return rate with the potential to earn more depending on the performance of the coin being provided.
One thing to note, though, is that your currency will be locked for a four-week period. There are options to choose what happens at the end of the period. You can choose not to automatically enter, re-enter with the original amount (and keep the earnings), or re-enter with the original amount plus earnings (auto-compound).
So, here we go. Visit the Lapis link at the top, and click the ENTER button on the Lapis service card you’d like to join. You can click the available balance in the bottom corner to add funds. Review the re-entry options, and click the ENTER button. You’re in! The Lapis service card tells you when the batch starts and ends, so you can sit back and wait for your returns.
Another cool feature of Pool by Cake is that you can configure it to automatically enter new funds into Lapis batches. This is great for investing money arriving from different sources without coming in and manually doing these steps each time.
I love so many things about Pool by Cake. Their three primary services — liquidity mining, staking, and Lapis — are all easy and offer great returns.
Liquidity mining is advertising APY that’s absolutely bonkers. Staking the DFI token offers 37% APY, compounded every 3 hours. Both of these options are great for earning DFI, which is having its own tremendous growth right now.
Lapis is more conservative, perfect for slow & steady. It has a guaranteed return that’s competitive with other services but offers a variable rate for when the invested coin gains value — a thing that’s been known to happen with BTC recently. I also love that I’m locked in for 4 weeks. It helps me (by force) to resist the urge to touch things while they’re earning.
I’ve had a lot of fun exploring Pool by Cake, and it seems really lucrative — perfect for my small-time hobbyist investing. Speaking of which, you should know that I’m not a financial advisor or professional. I’m just a person that’s exciting about crypto and all the possibilities that come along with it. There are several referral links in the article. They’re mutually beneficial, but thank you for the support they give me.
Bonus! More free crypto!
If you’re new to cryptocurrencies, you can earn about $40 of free crypto from Coinbase. Just sign up and watch some videos.
The videos available today will earn you $31 in a few different coins. They only take about a minute each, and I actually like learning what the different coins do. When you’re done, you can choose to keep the coins or convert them to BTC.
The one caveat is that you earn the $10 BTC sign-up bonus when you buy $100 of crypto. Do the following, though, and you’ll be up to $50 on a $20 investment in about an hour of work, plus it’ll be invested and growing!
Here’s what you do:
- Sign up for Coinbase using a referral code to earn $10 of BTC
- Buy $100 of BTC
- Watch videos to earn different coins to earn free crypto
- Convert the crypto you just earned to BTC
- Send $60 to Pool by Cake (You do remember the rest of this article, right?)
- Withdraw what’s left back to your bank account (or keep it as BTC)