Cheapest Way to Onboard onto DeFi
Whether you are trying to buy crypto on centralized exchanges (CEXs) or go straight to DeFi, you can get hit pretty hard with substantial fees. I thought I was doing a good job on Coinbase until I realized I was paying ~5% in fees every month.
This is how Coinbase gets you:
Let’s say I want to get $1,000 of ETH onto DeFi. First, I have to buy ETH on Coinbase using funds from my bank account. Here, Coinbase charges $18.40 in fees as shown below.
What they don’t show you is that there is also a 1% spread…. You will see this only when you are buying crypto from Coinbase’s mobile app seen below on the right. The spread is 1%. You can check this easily by looking at what Coinbase is telling you ETH is worth ($3,719.33) and what Uniswap is saying ($3,685).
Quick tip —
Or you can just look at what Coinbase is saying in the same window:
This is how CEX’s make their money so it’s the similar on others (Binance, Kraken, KuCoin).
How about I just skip the CEXs? If you think you are going to onboard straight into DeFi through MetaMask then guess again. Onboarding with a Credit Card, Paypal, ACH, or any other payment method, those are usually always worse than just paying the 5% on CEXs.
So how do I onboard without getting screwed?
Most of the CEX’s will let you buy stablecoins (e.g. USDC, USDT) with no fees/spread. It’s pretty hard to hide spreads when it’s 1:1.
Once you get full value for your $$$, do not convert to other crypto coins!!!
You will still get hit with similar fees / spreads. Instead, move those stablecoins onto DeFi and swap there.
Woola! You have saved yourself 5%! But one more piece of advice on swapping coins on DeFi.
Regardless of what coins you are swapping, you should always look at multiple protocols to see which will give you the best swap. Uniswap is usually at the top but not always.
-Just Another Crypto Analyst
Doing this for fun but if you want to leave a tip:
Ethereum: 0xa33aE4207466cD866D13fA587067B1F824C06d4A
Solana: 6bYE5H4qXW5oa8Y1Jxk7zXZXSaJGHGhcrV3UUPCejzXF
Cosmos: cosmos1uv0cu8mcmpdcfdemt28aej6zxw8vrr4kmdd5gr
