... invested more in crypto a while ago. Then I could have watched it all crash and then start a recovery today. Except today, there's seemingly a lot more functionality out there. I'm liking a lot of the DeFi ideas coming out. The only downside? Fees.
Holy shit, DeFi is expensive to experiment with on a small account. I think know I spent far more in Gas fees than earnings when I put crypto into Compound
I think I spent more than $30 USD in ETH opening a deposit account, borrowing crypto, paying the borrowed amount off and then closing out my position (account size just slighty above $350. Had I left my money in Compound, it would have taken years to earn back the fees I paid.
I like the trustless, no-custody idea around the DeFi space. But if you're just driving by, testing waters, a lot of this boom is going to turn to bust for the small wallets. Many of these projects are packaged up complexity being sold as simplicity. I'd venture a guess that 99% of people don't understand the underlying contracts in detail enough (I sure as hell don't). And unless you have a lot of truly disposable income or investments you don't mind losing, it isn't really a space that is meaningfully ready for the mainstream.
I think AAVE has the right idea with offering fixed borrow rates. This allows borrowers to have a fixed expectation of what needs to be repaid without worrying because a liquidity pool spikes the rates and you end up having your account liquidated.
What monetary economists should be happy about is you have a mega fuck ton of interest in their neck of the woods. You have people going out and experimenting with various systems and methods - bearing the risk - while not pushing it onto the larger society. Some may see it as re-inventing some wheels. But the interest alone means people are really looking to be involved in overhauling a marketplace (banking, finance and monetary policy) without depending on the existing, lethargic banking systems already in place.