Gastronomic and Other Wonders of De-Fi or Mining: Which One Should You Choose?
Tags: Mining Pool, Cryptocurrency, Defi, Ethereum, Mining

The last half of the year was marked by De-Fi projects. What is it: a horn of abundance ready to fill in your wide-open pockets, or a mousetrap that lures adventure seekers? Or maybe hell with him and you only need to focus on investing in mining equipment?

Hotdogs Are Bad Food For the Wallet

The most reliable way to multiply your capital or to zero it is by investing in De-Fi tokens. Sometimes their prices break conceivable and inconceivable records. “Invest?” — the impatient reader will ask. Recall Yearn Finance (YFI) — sorry for rubbing it in — the price of YFI rose more than 130,000% to $44,000, but then dropped to $22,000.

YFI Rate Collapse Graph

The story of YFI’s sharp take-off has put in brave hearts and hot heads the idea that the purchase of tokens should be carried out at the earliest stages, while no one knows about the project. Given the fact that new tokens appear on Uniswap every 5 minutes, choosing something worthwhile and reliable is very difficult. By the way, there is no strict procedure for verifying tokens, which is why scammers are not trading waters: often, those are not even people who add tokens, but special bots. There must be the sinister Skynet involved.

Let us recall the sad history of the HotDog token. It was released on September 2 and went up in price from $5 to $6,200 in a day, and then dropped in price almost to zero within a few minutes. First come, first served, eh?

Pasta, Sushi — As a Gastronomic Bacchanalia

Another great way to part with your hard-earned (that is, earned) money is “Profitable Farming”.

Profitable farming works like this: the user makes a deposit on the platform in a cryptocurrency, for example, Ethereum. A percentage is paid on this deposit, but in another cryptocurrency — in the native tokens of the project.

The success of this venture lies in insane, cosmic, universal deposit rates. At the start, De-Fi platforms offer a yield of thousands of percent per annum. For example, the Spaghetti Money project in the first day of operation allowed its users to receive up to 35,000% per annum in bitcoin. Sushiswap project — over 2,000%. And these are normal numbers for the sector.

“Then let’s do farming?” — I hear a question from the audience. Wait, it’s not that simple.

First, the profitability depends on the number of users. The more there are, the fewer coins for each “farmer”.

Secondly, as soon as users start receiving payments, they sell tokens, and the value of the latter falls. It is logical that this negatively affects the rates on deposits.

Third, the presence of vulnerabilities in the code. There is no story sadder than the story of the Yam project. On the first day of the launch of the project, users contributed more than $500 million in cryptocurrency to the platform. The next day, the project developer reported an error in the code. Within half an hour after that, the price of the Yam token fell from $167 to $1 (sad music pam-pam-pam-paaam).

Fourth, scammers. For example, a very high commission for the withdrawal of a “harvest”, more than $1,000, is added to the code.

Fifth, not only the token can fall in price, but also Ethereum or other cryptocurrency used as a deposit.

I’m No Magician, I’m Just Learning

Now, let’s leave the gastronomic theme and look at the trade with high leverage. This scheme is perfect for the daredevils, lovers of all-in and stuff like that. It works like this:

1. The trader temporarily gives the exchange, say, $1 as collateral and chooses a leverage with a coefficient of 100

2. Receives $100 in return

3. Cryptocurrency is automatically bought on this money.

And then pure magic:

4. If its price rises by 1%, the user receives 100% of the profit. If the asset becomes 1% cheaper, the site closes the deal and takes both the issued funds and the collateral.

So, if you, dear reader, are not a wizard, leave this damned financial Hogwarts with magic wands, take a pickaxe and dig deeper!

Good-Old Boring Mining

It is reliable. Not to impose the opinion, but we are wary of the De-Fi topic. Especially if the activity in the cryptoindustry is a business, even a small one, it must obey your personal plans. It is unlikely that they include being left without a shirt. Mining is something that can bring you planned but stable development. In addition to choosing the right equipment and cheap electricity, you should pay attention to the correct pool and its payment model.

So, for example, we recommend pools with PPLNS only if you have high capacities and have been mining on the pool for a long time. PPS+ is suitable for small miners, but you need to be prepared for the fact that the calculation is often not transparent and payments depend on the luck of the pool. After all, the miner’s reward is calculated based on the commission that was in the block found by the pool.

On the CoinFly pool, we use the most profitable model for miners called FPPS. This is an improved version of PPS+ as we pay for each accepted share, based on the average value of the blockreward in the network.

Let’s consider the following.

Taking into account the current rate, at 50 rigs, this is about 6 gh/s, you can earn $180 per day.

The cost of purchasing such a farm will cost (we assume that we have 250 AMD Radeon RX 480 8 GB cards) $54,000.

The bottom line, at the current Ethereum exchange rate, the farm payback will happen in 12 months.

Doesn’t sound like magic, but your shirt will stay on and there you’ll have no heartburn from low-quality gastronomy. Invest well!