Wild West of DeFi

tl;dr: the riches are appealing, but the bad guys are everywhere.

When you look at the interest rates you are getting in your TradFi bank account, it can become pretty compelling to go over to a place like Origin and get a USD equivalent return of >20%.

If you hold Ether or other crypto assets, a place like Pokket or AlphaHomora is going to be really appealing to you as well, with APYs in the double digits.

Of course, those yields don’t come without risk, which is an easy thing to forget when you’re enjoying the returns.

The risk these days comes in the form of smart contract hacks, which is precisely what happened to both Origin and Alpha Homora as well as Cream and many others.

This is why, I believe, Nexus Mutual is bound to succeed. It’s the ultimate “picks and shovels” play for DeFi. Everyone is going to need insurance.

For now though, like in the Wild West of old, plenty of people are going to get hurt.

That doesn’t mean there’s no riches to be made out west. It just means that it’s going to be a few years before it’s safe for everyone.

Of course, by then, the big yields will be gone.

Caveat emptor.