Introduction

In the world of finance, a revolution is brewing. A revolution that promises to democratize finance, eliminate centralized intermediaries, and provide unprecedented access to financial services. This revolution is known as Decentralized Finance, or DeFi.

According to recent projections by Statista, DeFi is expected to reach a staggering $16,960M in revenue by 2023, with an anticipated compounded annual growth rate of 19.6% between 2023 and 2027. By 2027, the total amount is projected to hit $34,700M.

But what exactly is DeFi, and how can you, as an investor, tap into its potential? This comprehensive guide will walk you through the world of DeFi, providing you with the knowledge and tools you need to start investing.

Here's a quick rundown of what you'll learn in this article:

• Understanding DeFi: The Basics
• Investing in DeFi: A Detailed Step-by-Step Guide
• The Sliver Advantage: A Deeper Look
• Conclusion

Understanding DeFi: The Basics

DeFi, short for "decentralized finance," refers to a class of digital financial products that are built on blockchains. Blockchains are decentralized databases that record transactions and aren't controlled or managed by any central authority. This decentralization is what gives DeFi its name.

DeFi protocols, also known as "smart contracts," are code-based agreements that contain the details of a transaction. These protocols enable people to trade crypto, lend and borrow crypto coins, participate in liquidity pools, and more.

The appeal of DeFi lies in its potential to democratize finance. By eliminating traditional brokers and their associated fees, DeFi makes financial transactions faster, more affordable, more transparent, and more accessible. Imagine being able to invest without having to meet a minimum asset threshold, or taking out a loan without doing any paperwork. DeFi empowers everyday investors to access new asset types, reduce their fees, improve their rates, and take more control over their financial future.

Investing in DeFi: A Detailed Step-by-Step Guide

Investing in DeFi can seem like a daunting task, especially if you're new to the world of digital assets. But don't worry, we're here to guide you every step of the way. Here's a detailed step-by-step guide to help you navigate the process.

Prepare a Wallet

The first step to investing in DeFi is setting up a crypto wallet. This digital entity is where you'll store the crypto coins that you'll use to participate in DeFi protocols.

There are many types of wallets to choose from, including hardware wallets, software wallets, and web wallets. Each type has its own advantages and disadvantages, and the choice ultimately depends on your personal preferences and needs.

• Hardware wallets are physical devices that store your crypto offline. They are considered the most secure type of wallet, as they are immune to online threats. However, they can be expensive and may not be necessary if you're just starting out.
• Software wallets are apps that you can download on your computer or smartphone. They are less secure than hardware wallets, as they are susceptible to online threats. However, they are more user-friendly and are a good choice for beginners.
• Web wallets are online platforms that store your crypto in the cloud. They are the least secure type of wallet, as they are vulnerable to hacking. However, they are the most convenient to use, as you can access your crypto from any device with an internet connection.

If you're new to DeFi, we recommend starting with a wallet that's easy to use and has a strong reputation for security. Our comprehensive guide on Understanding Crypto DeFi Wallets can help you make an informed decision.

Purchase Crypto Coins

Just like you need cash to invest in stocks, you need crypto coins to participate in DeFi protocols. Most protocols are built on Ethereum, so we suggest starting with Ether coins or ERC-20 tokens.

Purchasing crypto coins is a straightforward process. You can buy them on a crypto exchange, which is a platform that allows you to buy and sell crypto coins. There are many exchanges to choose from, and the choice depends on factors like the fees, the user interface, and the security measures.

When choosing an exchange, it's important to consider the fees. Some exchanges charge a flat fee for each transaction, while others charge a percentage of the transaction amount. It's also important to consider the user interface. Some exchanges have a user-friendly interface that makes it easy for beginners to navigate, while others have a more complex interface that may be more suitable for experienced users.

Once you've chosen an exchange and purchased your coins, you can transfer them to your wallet. This is a crucial step, as keeping your coins on an exchange can be risky. Exchanges are a prime target for hackers, and if the exchange gets hacked, you could lose your coins.

Get Started With Protocols

Decentralized finance (DeFi) is a rapidly growing financial ecosystem that allows users to access financial services without the need for a centralized intermediary. These protocols enable investors to lend crypto, trade crypto, stake (or lock up) crypto for a reward, participate in liquidity pools, and more.

DeFi protocols are built on top of blockchain technology, which provides a secure and transparent way to store and transfer value. This makes DeFi attractive to users who are looking for a more decentralized and secure way to manage their finances.

Each protocol has its own set of rules and mechanisms, and it's important to understand these before you start investing. For example, some protocols require you to lock up your coins for a certain period of time, while others allow you to withdraw your coins at any time.

If you are interested in interacting with DeFi protocols, there are a few things you need to do first.

• First, you need to set up a DeFi wallet. This is a software application that allows you to store your DeFi tokens and interact with DeFi protocols.
• Once you have a DeFi wallet, you need to fund it with some cryptocurrency. You can do this by buying cryptocurrency from a centralized exchange (CEX) and then transferring it to your DeFi wallet.
• Once your DeFi wallet is funded, you can start interacting with DeFi protocols. The process for interacting with a DeFi protocol will vary depending on the protocol you choose.

The general steps for interacting with DeFi protocols are as follows:

1. Connect your DeFi wallet to the DeFi protocol's website.
2. Select the cryptocurrency that you want to interact with.
3. Enter the amount of cryptocurrency that you want to interact with.
4. Click "Submit" to complete the transaction.

Let’s go through an example in which we’ll interact with the Aave protocol.

The Aave protocol is a decentralized lending protocol that allows users to lend and borrow cryptocurrencies. To interact with the Aave protocol, you will need to follow these steps:

1. Go to the Aave website: https://app.aave.com/.
2. Connect your DeFi wallet to the Aave website.
3. Select the cryptocurrency that you want to lend or borrow.
4. If you are lending cryptocurrency, enter the amount of cryptocurrency that you want to deposit.
5. If you are borrowing cryptocurrency, enter the amount of cryptocurrency that you want to borrow and the interest rate that you are willing to pay.
6. Click "Lend" or "Borrow" to complete the transaction.

Here are a few additional tips for interacting with DeFi protocols.

• Do your research: Before you interact with any DeFi protocol, it is important to do your research and understand the risks involved. This includes understanding the volatility of cryptocurrency prices and the security of the DeFi protocol.
• Use a secure DeFi wallet: When you are interacting with DeFi protocols, it is important to use a secure DeFi wallet. This means using a wallet that supports 2-factor authentication and that has been audited by a security firm.
• Start small: When you are first starting out with DeFi, it is a good idea to start small. This means depositing a small amount of cryptocurrency and borrowing a small amount of cryptocurrency. This will help you to minimize your risk.
• Be patient: The DeFi market is still relatively new, so it is important to be patient. The prices of cryptocurrencies can be volatile, and there can be delays in transactions.

By following these tips, you can help to mitigate the risks involved in interacting with DeFi protocols.

In addition to the general steps outlined above, there are a few specific things to keep in mind when interacting with the Aave protocol:

• The Aave protocol uses a loan-to-value (LTV) ratio to determine the amount of cryptocurrency that you can borrow. The LTV ratio is the percentage of the value of your collateral that you can borrow. For example, if you have $1000 worth of collateral and your LTV ratio is 50%, you can borrow up to $500.
• The interest rates on the Aave protocol are variable. This means that the interest rates can change over time.
• The Aave protocol is a decentralized protocol. This means that there is no central authority that can guarantee the safety of your funds.

By understanding these risks, you can make informed decisions about whether or not to interact with the Aave protocol, or any other protocol for that matter.

Of course with Sliver, you don’t have to go through any of these steps. All it takes are two taps to deposit into and two to withdraw from any investment opportunity. See Sliver’s features and benefits here.

If you're not sure where to start, our Beginner's Guide to DeFi is a great resource. It provides an overview of different protocols and ecosystems, helping you choose the ones that best fit your investment goals.

Track Your Investments

Once you've made your investments, it's important to track them.

There are several reasons why it is important to track DeFi investments.

• First, it allows you to monitor your portfolio performance. This is important because DeFi markets can be volatile, and it is important to track your investments to make sure that they are performing as expected.
• Second, tracking your DeFi investments allows you to identify opportunities. For example, if you see that one of your investments is performing poorly, you may want to sell it and invest in something else.
• Third, tracking your DeFi investments can help you to stay compliant with regulations. In some jurisdictions, there are specific requirements for tracking DeFi investments. By tracking your investments, you can make sure that you are compliant with the law.

There are a few different ways to track DeFi investments.

• One way is to use a DeFi portfolio tracker. These trackers allow you to connect your DeFi wallets and track your investments in one place.
• Another way to track DeFi investments is to use a spreadsheet. This is a more manual approach, but it can be effective if you only have a few DeFi investments.
• Finally, you can also track your DeFi investments using a centralized exchange (CEX). Many CEXs offer tools that allow you to track your DeFi investments.

Step-by-Step Guide to Tracking DeFi Investments

Here is a step-by-step guide on how to track DeFi investments using a DeFi portfolio tracker:

1. Choose a DeFi portfolio tracker: There are many different DeFi portfolio trackers available, so take some time to compare them and choose one that meets your needs.
2. Connect your DeFi wallets: Once you have chosen a DeFi portfolio tracker, you will need to connect your DeFi wallets. This will allow the tracker to track your investments.
3. Track your investments: Once your DeFi wallets are connected, you will be able to track your investments in one place. The tracker will show you the value of your investments, their performance, and other relevant information.
4. Identify opportunities: By tracking your investments, you will be able to identify opportunities. For example, if you see that one of your investments is performing poorly, you may want to sell it and invest in something else.
5. Stay compliant with regulations: If you are in a jurisdiction that requires you to track your DeFi investments, the tracker will help you to do so.

Best DeFi Portfolio Trackers

There are many different DeFi portfolio trackers available, but some of the best include:

• CoinStats: CoinStats is a popular DeFi portfolio tracker that allows you to track your investments across multiple exchanges and blockchains. It also offers a variety of features, such as price alerts, portfolio analysis, and news aggregation.
• DeFi Llama: DeFi Llama is another popular DeFi portfolio tracker that focuses on DeFi-specific metrics, such as total value locked (TVL) and market capitalization. It also offers a variety of features, such as portfolio analysis and price alerts.
• Zerion: Zerion is a DeFi wallet that also offers a portfolio tracker. Zerion is easy to use and offers a variety of features, such as portfolio tracking, price alerts, and DeFi yield farming.
• Delta: Delta is a popular portfolio tracker that can be used to track DeFi investments. Delta offers a variety of features, such as portfolio tracking, price alerts, and news aggregation.

Nansen has a great article on other trackers as well.

Of course we believe that when Sliver launches, it will be the absolute easiest way for you to track your assets and investments. Secure your early access to not miss out.

Tracking DeFi investments is an important part of managing your DeFi portfolio. By tracking your investments, you can monitor your performance, identify opportunities, and stay compliant with regulations.

The Sliver Advantage: A Deeper Look

Investing in DeFi can be a rewarding but challenging endeavor. The complexity of DeFi protocols, the volatility of the crypto market, and the risks associated with digital assets can make it a daunting task for many investors. That's where Sliver comes in. Our mission is to make decentralized investing in digital assets easy, safe, and accessible to everyone, everywhere.

Simplifying DeFi Investing

One of the biggest challenges of investing in DeFi is the complexity of the protocols. DeFi protocols are built on blockchain technology, and they involve concepts and mechanisms that can be difficult to understand for those who are not familiar with the technology.

At Sliver, we aim to simplify the process of investing in DeFi. We do this by providing an experience that is easy to use and understand. But, we don't just simplify the process, we also provide the tools and resources you need to make informed decisions. Our experience includes Beacon, a comprehensive library of educational content, including articles, guides, and tutorials, that explain the concepts and mechanisms of DeFi in a simple and understandable way.

Ensuring Safety and Security

Another major challenge of investing in DeFi is the risk associated with digital assets. The crypto market is highly volatile, and there are risks of hacking and fraud.

At Sliver, we take the safety and security of our users seriously. We implement robust security measures to protect your assets and your personal information. Our platform uses advanced encryption technologies to secure your transactions and your data. We also have strict protocols in place to prevent fraud and unauthorized access to your account.

To learn more about how Sliver keeps your assets and investments safe, check out our article here.

Making DeFi Accessible

Perhaps the most significant advantage of Sliver is our commitment to making DeFi accessible to everyone, everywhere. We believe that everyone should have the opportunity to invest in digital assets and benefit from the potential of DeFi.

Sliver brings unparalleled ease and convenience to the three key challenges described above.

• Getting Started with Digital Assets: Sliver makes it easy, safe, and secure to get started with digital assets. Creating a fully decentralized wallet takes just a single tap. Managing private keys and seed phrases becomes invisible. Downloading browser extensions or apps becomes a thing of the past.
• Discovering Legitimate Investment Opportunities: Sliver makes it easy, safe, and secure to access battle-tested investment opportunities. Users access investment opportunities curated by Sliver based on a range of technical and non-technical indicators, such as time since inception, total value locked (TVL) over time, return over time (APY or APR), reputation of protocol operators, code audit levels, among others.
• Interacting with Smart Contracts: Sliver makes it easy, safe, and secure to interact with smart contracts to move funds in and out. Depositing funds into and withdrawing funds from investments such as liquidity pools, yield farms, etc, across blockchain networks, DEXs, and dApps takes just 2 taps.

Whether you are looking to invest in the best cryptocurrency to buy, track your crypto portfolio, or invest in DeFi, Sliver has you covered. Sliver makes investing in cryptocurrencies, digital assets, and DeFi, as straightforward as investing in stocks or bonds using your favorite neo-banking apps.

Check out our article on how Sliver Simplifies Decentralized Investing in Digital Assets for All to see how we're making DeFi investing easier, safer, and more accessible.

Conclusion

Investing in DeFi is a journey, and like any journey, it requires preparation, knowledge, and the right tools. With this comprehensive guide, we hope to have provided you with the knowledge and tools you need to start your journey.

Remember, the world of DeFi is vast and ever-changing, and it's important to stay informed and adapt to changes. At Sliver, we're committed to helping you navigate this world and achieve your financial goals. So why wait? Start your journey today, and invest in the inevitable.

Here are five related blogs that provide further insights into the world of DeFi:

1. DeFi Prime: This blog sheds light on how DeFi products are built and how the ecosystem evolves over time. It features interviews with DeFi projects, analytics, and more.
2. DeFipedia: This blog demystifies and explains decentralized finance, how it works, and how to capitalize on its growth potential.
3. DappRadar: This blog provides up-to-date DeFi analysis and decentralized exchanges information, helping you stay ahead of the curve in the golden age of digital finance.
4. Exponential DeFi: Exponential DeFi is on a mission to make decentralized finance accessible to all by building the easiest way to invest in DeFi. Their blog provides insights into their mission and the world of DeFi.
5. De.Fi: Browse this blog to learn more about the world of DeFi, get updates on their suite of tools, and research exciting new projects.