BTC Geek

This guide on how to buy DPI, the DeFi index fund will walk you through what DPI is and why it is powerful to get a diversified exposure to DeFi with minimal effort.

DeFi, or decentralized finance, is having a moment on Ethereum. The rise of “blue-chips” like AAVE, SNX, and YFI has been followed by the rise of newer tokens like UNI and SUSHI and then a long-tail of promising projects from there on out.

For a regular crypto investor who isn’t spending 24/7 in Discord channels and Telegram groups, keeping up with everything can be daunting. Even then, buying and rebalancing a DeFi portfolio isn’t trivial due to increasing gas costs.

What is a DeFi Index Fund?

A DeFi index fund is an index that is backed by several other DeFi tokens. This index itself is tokenized and assets held in reserve, i.e. each token of the DeFi index fund can be redeemed for underlying assets and each token can be created by supplying the underlying assets in the specific ratio.

A DeFi Index is an ideal instrument that grants exposure to underlying DeFi tokens and does the rebalancing automatically on behalf of holders. Its value is fully backed by the DeFi tokens backing the index, just like a regular Index Fund in traditional equities.

What is the DPI Index?

The DPI index is maintained by the popular DeFi Pulse team and built using the Set Protocol.

As of this writing, there are 10 components of the DPI. They are as follows:

• AAVE at 25.80%
• UNI at 23.79%
• SNX at 16.31%
• MKR at 9.42%
• COMP at 7.20%
• YFI at 6.50%
• LRC at 3.89%
• REN at 3.67%
• KNC at 1.98%
• BAL at 1.63%

Now of course you may not agree with the weighting here and that’s the whole point of the index. For example, YFI feels underweight in the index at the current valuations, but that’s a personal opinion.

How to Buy DPI Index

In order to buy the DPI index, you can simply need to buy the DPI token from any exchange. However, due to the nature of the index being backed by other tokens, you can also “create” a token of DPI by supplying the underlying assets.

If you want to supply all the assets and get DPI tokens, we refer you to the tokensets page of DPI. This may be a good play for DeFi whales who may get better pricing and even find arbitrage trades in volatile markets and make a profit off of price discrepancies.

If you’re a smaller investor or don’t want to deal with the creation and redemption process, then buying DPI off an exchange is the easiest way to gain exposure to this DeFi index.

To buy DPI, follow these steps:

Step-1: Go to a DeFi aggregator like 1inch to find the best pricing for DPI.

Step-2: Connect your Web3 wallet like MetaMask.

Step-3 (optional): Make sure you have ETH or another ERC20 token in your wallet. If not, you can buy from exchanges like Binance or Coinbase.

Step-4: Select which token you want to convert to DPI, or just stick with ETH.

Step-5: Execute the trade and you should have DPI in your Web3 wallet.

This should route your order through the best DEXes on Ethereum even for pretty complex paths. For example, here is a sample routing to convert from RLC to DPI.

If you are an investor DPI, let us know your thoughts in the comments below and what tokens you would like to see added to DPI.

This is a post on how to buy BAO Token from Bao Finance but also how to farm BAO token instead of buying and why it has been quite attractive for DeFi enthusiasts.

BAO Finance is an interesting DeFi project that describes itself as a synthetic asset and lending platform, kinda like a combination of SNX and Aave. However, more immediately the reason it has caught the imagination of a lot of people and projects is its somewhat unique take on yield farming.

The broader product idea from BAO Finance is to use Uniswap, Sushiswap, and Balancer LP (liquidity provider) tokens to collateralize synthetic positions. Think of this as SNX but instead of SNX being the collateral, the LP tokens will be. To that end, it made sense for BAO Finance to first release a yield farming product.

Per their site,

The BAO token acts as a governance token for the fully community run project. It is also backed by the insurance fund where all Bao fees go.

How to Farm BAO Token

Before you decide to buy BAO, it might make sense to first look at how to farm BAO token instead since this could be more profitable with lower risk. This is especially the case if you have any Uniswap LPs sitting around doing nothing. Instead, you can stake them in BAO Finance and earn some BAO tokens immediately.

The most interesting thing about BAO yield farming is that there are hundreds of LP pairs available to yield farm.

However, one thing to note upfront is that you will only get 5% of the BAO tokens that you farm upfront. The rest will vest over a period of 3 years with a 1 year cliff. Therefore, if you are looking for a short-term farm, make sure to figure out if these numbers work out for you or not.

This is also why the advertised APYs are so high, since only 5% of this is “real” at the moment.

Also, make sure to read the docs, especially around fees and penalties before you start farming. There is both a deposit and withdraw fee.

The good news though is there are hundreds of LP pairs available so there are a lot of options. Check out all the BAO Farms here.

How to Buy BAO Token

BAO token has been one of the top performing DeFi tokens the last few days.

If you want to directly buy BAO token, make sure you buy via 1inch so you can get the best possible price. 1inch will automatically aggregate all of DeFi liquidity sources for you including Uniswap and Sushiswap. Uni and Sushi have the largest BAO pools of liquidity since they are incentivized with BAO farming currently.

You can also easily convert non-ETH ERC20 tokens into BAO via 1inch automatically via the best price execution and by splitting your order the right way.

If you want a more centralized exchange experience especially when gas is high, you can always go to Binance. If you need to buy ETH via USD, Coinbase is best.

You can also find the information on BAO/ETH pairs on Uniswap and Sushiswap. This is the BAO token on Etherscan.

This is a guide on how to buy 1INCH token from the 1inch project. 1inch is an aggregator of decentralized exchanges, but is expanding beyond that into an ecosystem of DeFi products (such as Mooniswap, a DEX by itself). The team launched the 1INCH token on 24th December 2020 which will act as a governance token for the products they build.

The token has just launched is already over $1 billion fully diluted marketcap. This is because the 1inch DEX aggregator does insane volume and the product makes a lot of revenue and is already profitable. Combine that with a technical team that is known to ship top DeFi products, and you have a killer combination that people want.

1inch has become the go to place to buy DeFi tokens without KYC. It has more recently supported private market makers or PMM. This means someone could arbitrage from a centralized exchange but you never need to create an account and risk custody of funds – you just approve your metamask transactions and the trade happens.

How to Buy 1INCH token

First, connect your Metamask (or another Web3 wallet) to check if you already have any 1INCH tokens. This is because the team did an airdrop similar to Uniswap’s UNI. You can sell 1INCH tokens the same way as outlined below.

Buy on 1inch

If you want to buy 1INCH tokens via a DEX in a decentralized way, head over to the 1inch DEX aggregator. Here you can buy 1INCH token via any other token like ETH. Now that 1inch also has its own liquidity pools, this is the best way to buy 1INCH tokens instead of Uniswap.

Buy on Binance

Binance has immediately added support for 1INCH so you can buy and sell 1INCH token on Binance already.

The reason you may want to buy on Binance is because gas prices are pretty high on Ethereum right now, and trade costs can be anywhere from $10-$15 per transaction or higher (edit: now that gas prices for a single trade are hovering around $40-$50, this is unfortunately more of a case of switching to Binance) which is practically free on Binance. If you want to buy 1INCH token in small quantities, this may be your preferred option.

Update: Binance has enabled margin trading up to 5x on 1INCH/ETH pair, which is a nice feature for traders.

Yes, we see the irony in buying the token of a DEX aggregator on a CEX but if the amounts are not large, Binance really could be a more economical options. Just make sure you understand the tradeoffs between DEX and CEX in this case.

This is some more information on 1inch so far from the team:

Resources

Etherscan link to 1inch token

1INCH launch post

Yearn Finance has been on an acquisition spree. The list of YFI acquisitions continues to grow as more and more DeFi projects get acquired or run deep collaborations with the YFI ecosystem.

Before we dive into the list, note the meaning of the word “acquisition” is very differently used than a traditional corporate acquisition. Andre Cronje, the founder of Yearn, explains it as such. Acquisition here could mean any of merger, acquisition, partnership, or collaboration (albeit somewhat deeper collaboration than “crypto-collaborations” which are notoriously unreliable).

Let’s look at the list of YFI collaborations

• Pickle: Pickle has been working on similar projects to yVault via pJars or pickle jars. Therefore, a merger of sorts here was not unsurprising. Pickle moved faster than Yearn but unfortunately already experienced a $20 million hack. The time was right for YFI to swoop in. Pickle developers will now focus on strategies within the Yearn ecosystem – basically, an acquisition of the dev team.
• Cream: Even since the early days, Yearn has been focused on money markets, lending, and yield generating products via the y-tokens. Cream was a natural extension of that. Cream is more of a deep partnership or collaboration and Cream can become the go to protocol for lending for Yearn strategies. We’ll see how this plays with Aave, Compound, and Maker.
• Cover: Similar to Cream, this is more of a deep partnership or collaboration. Insurance has been something the Yearn team has worked on in the past with yInsure. Cover just makes it more robust, scalable, and usable. Read the post here.
• Akro: Akro, the “Greek DeFi” is similar to Pickle in that it is combining developer effort to building out the yield ecosystem. Akro contributes the frontend and users already using their system and contributes investment strategies to Yearn tailored to their userbase. You can read their announcement here.
• Sushi: Announcement here

These are the list of YFI acquisitions, mergers, partnerships, and collaborations to date. Yearn has emerged from the DeFi bear market with guns blazing – time will tell if this translates into higher AUM, higher revenue, and higher YFI value, especially with the v2 vaults launching to the public in a few months.