Using the DAI savings rate - Assignment

[KristianR]

@bfleming98

We just did this lots of fun using the Kovan test network. Keep in mind the faucet link does not work. You need to post your Kovan ETH Address in a chat room. You get 6 ETH each 2 days

I tried getting there but i got lost on the way trying to find Parity - since there is no client that you can use or enter.
Im gonna check this section as complete although when I get enough funds Im sure that I will come back to it since Im really interested in savings rate due to giving stabletoken a liquidity. Seems a good way to save money, just put in and let the money raise it self bit by bit and collect interests.
Im currently unable to start experimenting due to home financial situation ( put almost all savings into this academy ) and i have a kid so i cannot give my self comfort to try to put a lot of money into it right now, hopefully that will change as soon as complete programming course and start earning my stakes in academy

Cheers

[jokir]

I think there could be interesting opportunities in automated platforms that are able to take deposits from customers and automatically deposit their money to protocols returning the best yields. Customers could set minimum balances to remain accessible in their accounts as well as set their risk tolerance for interest returns. As this is all pretty new still I think there is a pretty high barrier to entry for most users and having and automated platform that interacts with all of the different defi protocols out there with greatly simplify the user exerience.

[MattWill]

Very interesting projects indeed. Thanks for the link.

[mikeyc5007]

maker is an awesome daap. this could be used for people in unstable economic conditions to be more financially secure against their high inflation currencies .

[cryptochef]

@amadeobrands

Let’s put what we have learned into practice and open a maker CDP mint some DAI tokens then let’s park these DAI tokens into compound, Chai or Oasis or if you just want to test use the kovan Etherum network https://oasis.app/save?network=kovan

When locking Etherum in a Maker DAO CDP and then borrowing you collateral to another protocol do you see any interesting market opportunities? Or do you have any cool ideas of new building blocks that we can build together let’s discuss it in this forum thread.

It was a bit challenging, I got to admit.
As it was all very new for me, here below it’s my ‘proof of work’ on how I did it.
ETH Gas fees were very steep, I got to say. I hope that with ETH 2.0 all of this will be solved.

1. I downloaded and set up my Brave account
2. I set up up my Metamask account and transfer some eth from my coinbase wallet
3. I went to the Compound site and connected my Metamask wallet
4. I then converted my ETH to DAI
5. I wanted to park my DAI into the borrowing pool to open a vault
6. I parked it there and got my collateral ratio

I really like the fact that a quite high percentage of return is possible. I think the opportunities are many and with a deeper knowledge and use, I am sure people will see the enormous differences with the currently available options.
I think a great opportunity lies into the insurance echo-system. Generally speaking, decentralized insurance acts as a safety net for the DeFi ecosystem. From wallet insurance to smart contract insurance, the comfort of knowing that your assets are protected in the case of a bug or a hack creates peace of mind for crypto investors. Legacy insurance is a multi-trillion dollar industry with many shady or unethical players. I think that DeFi could change all that in the future.
It would be great if a sort of car insurance would be possible for example. Or life insurance. Even medical.
I came across this very cool project called Etherisc. Etherisc is building a platform for decentralized insurance applications. The core team developed some common infrastructure, product templates and insurance license-as-a-service that allows anyone to create their own insurance products. With this, the Etherisc community has designed a suite of basic insurance products ranging from flight delay insurance and hurricane protection to crypto wallet and lending collateral protection.

I think that’s the future right there.

[mchoeti]

@amadeobrands i will be in for the Yield Farming / Hacking course !

[mchoeti]

It sounds really simple and it is a cool thing. But to be honest at the moment this is not really a case when i compare it to the GAS fees of Ethereum. In reality i have some DAI left and i am getting a few perfcentage. Not much, but i think at the moment it is about 8% .

But closing that up. From my point of view there are soooooooooooo many interresting projects really. And i really love your course. But to be honest i did that in the past but atm the fees are really high. Maybe we have to wait for ETH 2.0 then there will be staking everywhere.
All the best and thanks for the information
Cheers
Christian

[bfleming98]

Yes - Go here and join their chat system:

https://gitter.im/kovan-testnet/faucet

Then switch your MetaMask network to “Kovan test network”. Get your ETH address and paste it in the chat room. Very strange but that’s how they do it.

You will get 6 ETH for testing. Then try to do what they showed us in the course with your test ETH.

[CharlieMo]

Minted some DAI and parked into compound.Small amount. Will leave it for a few months for the sole purpose of seeing the interest rate through this interesting time in the market.

Definitely interesting to be able to lock up some ETH instead of exchanging it, and at the same time potentially make money on the many trading opportunities presenting themselves recently, especially with successful leveraged trades.

[shaikein11]

When locking Etherum in a Maker DAO CDP and then borrowing you collateral to another protocol do you see any interesting market opportunities?
This is a way to obtain yields over an asset that would be parked in a cold storage otherwise. Let’s consider ETH or WBTC, which are coins that most of users accumulate. Both of them have a collateralization ratio between 130% and 150% in Oasis, as shown in the image.

Let’s assume that I would mint 50% of ETH/WBTC market value in DAI (to remain at a 200% collateralization ratio, in order to lower risks). Then, I may go into Compound, Aave or Oasis save in order to deposit my DAI in order to get yields. I will attach some screenshots to see the yields that we may obtain there.
Oasis

Compound

Aave

As we see, we are able to get up to a 7.35% APY over our deposits. Let’s suppose that I deposit 1 ETH now (current ETH valuation is $1540), and mint 770 DAI. In one year, I would have (almost) 826.6 DAI, earning 56.6 DAI from a resource that would have been idle. Naturally, as we are currently in a bull market, with plenty of volatility, users should keep an eye on their CDPs to avoid getting liquidated.

However, we could also consider another -riskier- scenario. For instance, we can deposit DAI into Aave or Compound, and use it as a collateral to get USDT (considering that I get 7.35% APY over my deposit and I would be charged 3.70% APR over my borrowed USDT). As both of them are stablecoins, we can trade them equally, but as the APY is higher than the APR, we are earning money while getting liquidity at the same time.

In our example, as we have 770 DAI in Aave, we would be able to receive 385 USDT (considering a 200% collateralization ratio). As we said, we will earn 56.6 DAI as yield, but, as we get USDT, we would be paying 14.25 USDT in interests. This way, we reduce our yield to $42.35, however, we would have 385 USDT that we can use to trade.
Of course, I understand that yields may vary, so we can also use those USDT to buy DAI and ETH in order to protect our CDPs from getting liquidated.

[shaikein11]

ps: I read my classmates’ answers, and I should recognize the fact of the gas fees. However, this is an issue from the user’s standpoint, however, as I am a software developer, this is a great opportunity for us to develop solutions that are more efficient in terms of resource consumption (both in terms of Layer 2 technologies, or by aggregating users’ transactions to make them cost-efficient in a certain way, if possible)

[CharlieMo]

So DeFi gives the everyday person access to wealth creation. But of those people and communities in developing countries who need small loans for crucial aspects of their lives? Like urgently treating or replacing live stock, installing or repairing water cleaning system. Even food for the week or school books for their kids. With the massive volume of lending and borrowing going for the sake of making profit, could there be another branch to this system, where Lenders could be more like sponsors of specific borrowers of their choosing?

Example: Joe has loads of ETH. wants to help out. goes to this hypothetical network where borrowers (people or organizations) seek loans for various reasons. Joe choses one person or project, locks his own ETH on behalf of the borrower, giving access to some DAI (for example) to the borrower, who then utilizes it to their needs. The loan has to be paid back in a pre determined amount of time with very low interest rates. If the loan doesn’t get paid back in time, the ETH is liquidated to cover the loan. Joe still gets reward tokens from the hypothetical network for lending. Borrowers would get reward tokens for paying back their loan on time.

I realize that in the conventional world, this could be a platform for malicious intention. But with blockchain, there could a solid verification system in place. It would be easy for lenders to see if their borrowers had previous loans they didn’t pay back. Not sure how all this would be collateralized but thought it was worth putting the idea out there.

What you think? Could something like this ever be possible? If so, how could it work?

[Dianne]

Let’s put what we have learned into practice and open a maker CDP mint some DAI tokens then let’s park these DAI tokens into compound , Chai or Oasis or if you just want to test use the kovan Etherum network https://oasis.app/save?network=kovan

When locking Etherum in a Maker DAO CDP and then borrowing you collateral to another protocol do you see any interesting market opportunities?

[Dianne]

I have to back up and review some of this material.

[technodeedee]

I have to do my own research on this topic. unfortunately nerding around with makeDao and your way of explaining it all, doesn’t really make much sense to me and doesnt make me excited about defi.
I wanted to have a go regardless and try to apply some of the things you mentioned, but Eth gas fees right now are skyhigh and making a whole exercise not very appealing.

[Matt_thetrader]

It’s hard to say if there’s new opportunities because this thread was created in March of '20 and needs to be updated. There’s ALWAYS opportunities if you’re willing to look, it has definitely become an extremely competitive space. So much has evolved so quickly since March of 2020. There’s so many more wallets that provide savings of 8%+ even on bitcoin and etherium just by holding it in their wallet. There’s yield farming and liquidity pools providing 100s or % like on autofarm.network and https://1inch.exchange/#/dao/pools. Maker, Compound, and Curve have grown in and of themselves. I think replicating and innovating has become more opportunistic than inventing. Faster, cheaper, higher yield, etc… Finding ways to accomplish that.

[Matt_thetrader]

One idea I wanted to add that I’ve actually been thinking about is replacing merchant accounts for businesses. We pay thousands in merchant fees every month, and though just having a wallet solves this to an extent, having a protocol through defi that acts the same way as a merchant account could save thousands for businesses. The risk, say if you choose to take bitcoin as payment, is the volatility and bitcoin potentially losing its dollar value. Something like $USDC or $DAI may work better for stability of value, but people are not really familiar with that yet.

[G_Rett]

I was able to get some KETH on the kovan network, but I couldn’t do much after that. I went onto compound and used my ETH as collateral and then borrowed some DAI but couldn’t advance from there. It may be because I did all of this through my cell phone though.

Aside from that, there are so many opportunities out there in the defi world. It’s definitely enticing to see how much better the interest rates are (compared to normal banks) and how much you can earn between different tokens. I feel like this is going to keep booming the more people find out about this.
On the other hand, I see it being a challenge to convince traditional bank users to move into the defi world. There are so many steps to go through and for someone completely new to the field, it could be very overwhelming.
Eventually, it’ll get better and easier though.

[shaikein11]

I really liked your point, in fact, I talked about it in the next assignment.
You can actually implement a crowdfunding platform on Blockchain. With the power of Smart Contracts, you are able to unlock the resources if-and-only-if the amount of required money is achieved at a certain date.
Also, as a chilean, I also have been part of plenty of fund collections, raffles, and benefit football tournaments and so, which were ran to pay for hospital bills, personal debts and learning materials. We are also used to make monthly pools, where everyone puts a certain monthly payment, and each month one of us take the pool. Even if this is good, because it shows people’s solidarity, it also has a downturn, as you are always counting on the same people to join those mechanisms.
That’s where you can make something like PoolTogether, but distributing the money in a different way (say, 80% to pay the bills, 5% for fees and 15% for rewards, while you have the donations in a savings account yielding money)

[jerre]

Is it possible to make an academy test blockchain, the fees are really high.
the APY of some services are apparently lower than stated when a high amount is deposited on some lending platforms, so check for that.

For now DeFi seems only feasable for large wallets.