5 Ethereum DeFi Apps Revolutionizing Saving

Will Brealey
Jan 16 · 6 min read

Interest rates around the world are woeful, and the global forecast is bleak. In the UK, outgoing Bank of England Chief Mark Carney warned the main rate of 0.75% could be lowered to just 0.50% as early as this month.

What many haven’t yet realized is that thanks to a huge number of new Ethereum apps known as DeFi (decentralized finance), you can earn as much as ten times what traditional institutions are offering today. These apps are very easy to use, and new users can get set up in just a few minutes.

The best part? Saving is just one application of this new technology. Today we’re going to look at five radical new things you can do with Ethereum’s dollar-pegged stablecoin Dai.

tl;dr:
1: Start Earning 6% In Just 3 Taps using Argent and Compound
2: Watch Your 6% Interest Increase by the Second With Maker’s Oasis
3. Participate in a Weekly No Cost Lottery with PoolTogether
4. Directly Donate Your 6% Interest to Plant Trees with rTrees
5. Use DeFiZap to Earn Interest on Dai Without Losing Ether Exposure

What are DeFi apps?

DeFi (DEE-FI) is an umbrella term for a large and growing number of apps built on Ethereum. Key features include:

  • open-source, (anyone can check the and contribute to the codebase)
  • inclusive (anyone can use them, regardless of race/age/gender/nationality/sexual orientation)
  • non-custodial (you have ownership of your funds at all times, you do not need to trust a third party)

DeFi exploded onto the cryptocurrency scene and is currently seeing huge growth. There’s $764m worth of funds being used on DeFi projects today, a number that grew $30m since yesterday. You can keep up to speed with this rapidly evolving scene at DefiPulse.

Many of these apps are loaded from a web browser, and you’re going to need the MetaMask browser extension to interface with them. Guide available here.

1: Start Earning 6% Interest in Just 3 Taps using Argent and Compound

With the Argent wallet you can easily buy and earn interest on Dai while keeping control of your funds the at all times. You’ll also get a free ENS name, a human-friendly Ethereum address (activism.xyz.eth), and Argent lets users send funds over the Ethereum network for free.

Your interest is earned with Compound, which currently earns slightly less than 6%, coming in at 5.8%. Right now Argent only allows US customers to buy cryptocurrency directly, but support for European customers coming this month.

Steps:

  1. Download Argent wallet on Android or iOS
  2. Buy Dai directly with your local currency.
  3. Navigate to finances and press ‘Grow Your Holdings’.

2: Watch Your 6% Interest Increase by the Second With Maker’s Oasis

Maker (the organisation that produced and maintains the Dai stablecoin) also provide a suite of tools with their Oasis app. It’s simple to use, but there are a couple more steps involved than using Argent’s mobile app. You will need to download the MetaMask chrome browser extension, and send Dai to your address, as well as some Ether to cover gas costs.

There’s something incredibly satisfying about seeing your interest roll in in real time.

Steps:

  • Navigate to https://oasis.app/
  • Connect your MetaMask wallet
  • Hit ‘Save’, ‘deploy proxy’, and confirm the MetaMask popup.
  • Select how much to deposit and sign the MetaMask transaction

Bonus: If you would like the benefits of Maker’s system without going through the process yourself, Chai is a token that increases in value at the same rate as Oasis’ Dai Saving Rate. Just holding it gives you exposure to the current 6% interest. You can buy Chai directly, or swap your Ether or other tokens for it on Uniswap.

3. Participate in a Weekly No Cost Lottery with PoolTogether

With Compound and Oasis you can lock your Dai up and pocket 6% interest. With PoolTogether users pool all the interest they gather and give it to one winner every week. Each Dai you deposit gives you one ticket, with the chance to win $410 every single week at the time of writing. Currently there’s $316,599 deposited, and the weekly prize keeps increasing as more users get involved.

Steps:

4. Directly Donate Your Interest to Plant Trees with rTrees

Instead of pocketing the 6% interest, you can now directly put that money to good use thanks to rDai. The Dai is sent to Trees For The Future, a charitable organisation that has planted over 43 million trees in Africa over the last thirty years. The program transforms local communities and directly combats climate change, you can learn about their work here.

Steps:

5. Use DeFiZap to Earn Interest on Dai Without Losing Ether Exposure

What exactly is going on here? To gain interest with DeFi you usually have to own Dai. Owning Dai is great, but that’s money you could have otherwise have invested in Ether. If Ether goes up, you’ll miss out on potential gains far outweighing 6% interest. To give some perspective, Ether is down 90% from its all-time-high.

DefiZap’s Leveraged Liquidity Pool solves this problem. It sets aside a portion of your balance to earn interest on Uniswap providing liquidity for users. The rest is used to open a leveraged long position using Fulcrum, giving you 2x exposure to Ether.

Combining both, you can get the benefits of a return on Dai without missing out if Ether goes up. You maintain almost 100% Ether exposure.

Thanks to DeFiZap, you can get this complex system setup with just a couple of clicks, saving you an estimated 8 minutes.

Warning. A leveraged position means that if Ether goes down, you could be liquidated and lose a portion of your Ether. This is a risky bet, and only for those who are confident Ether’s near-term outlook. If you’re not familiar with leveraged trading, it’s best to spend some serious time understanding the risks before getting started.

DefiTutorials did a great explainer on using this Zap.

Steps:

Conclusion

DeFi is growing at an exponential rate, with projects launching on a weekly basis. What’s so exciting is just how easy these apps are to use. With a MetaMask wallet and some Ether, anyone anywhere can participate in this emergent revolutionary technology with just a couple of clicks or taps.

But while it’s easier than ever to use the boundless possibilities of Ethereum, it’s important for new users to fully understand the risks.

  • When using DeFi and cryptocurrencies in general you are entirely responsible for your money. If you make a mistake, for example by sending your money to the wrong address, nobody can help you recover it. Check, check, and check again.
  • If you lose the key to your wallet, you have also lost your funds. Back up and use multiple devices.
  • This is very new and experimental technology. We can’t completely rule out an unforeseen bug or vulnerability that could cause you to lose your funds, even after code has been audited. Be aware of this risk before participating.

That’s it for today. If you’d like further details or to correct a mistake feel free to reach out to me on Twitter @w_brealey, and as always you can support me by sending funds to activism.eth or my Gitcoin grant.

Will Brealey

Written by

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