Test: Arbitrum DeFi Farming vs. Bitcoin

What is more profitable in the current macro: a diversified yield portfolio of DeFi pools on Arbitrum or HODL Bitcoin or Ethereum?

In the dynamic and evolving world of Decentralized Finance (DeFi), there are exciting opportunities for financial growth. It’s critical, however, to have a clear understanding of how these investments might behave under different market conditions. With this in mind, we’ve conducted a backtest of a DeFi portfolio featuring multiple platforms.

This backtest is not about predicting the future based on the past. Instead, it’s a practical way to evaluate the resilience and potential of various DeFi investment strategies. It’s a window into how DeFi opportunities might compare with the traditional route of merely holding cryptocurrencies like Bitcoin or Ethereum.

We’ve kept this backtest straightforward and beginner-friendly, focusing on four pools from well-known DeFi protocols. The assets involved are limited to established, reliable cryptocurrencies — often referred to as ‘blue chips’ in the crypto world.

Remember, a backtest is not a crystal ball. It doesn’t promise what will happen, but rather, it provides valuable insight into how certain strategies have performed under specific market conditions. In other words, it’s a learning tool, designed to help both new and experienced investors gain a deeper understanding of DeFi’s unique landscape.