Cryptocurrency is gaining more momentum as an alternative form of investment in the recent years. That momentum was even made more apparent when the pandemic hit and Bitcoin has grew to as high as $67,000.
Many projects have come up since crypto became popular: NFTs, yield farming, crypto games, and most recently, talks about the Metaverse.
But the thing that really interests me right now is in how to create passive income from my crypto holdings.
You know me, I love talking about Passive Income in any way I can.
This is why in August, I tried Cake DeFi, a platform that puts my cryptocurrencies to work and generate cashflow passively.
It’s been 3 months now since I started, so it’s time to look at the results of my experiment with Cake DeFi.
Correcting Myself…
First, I’d like to correct myself from my last Cake DeFi video because I thought I invested $300 initially in the platform.
I checked the price of BTC for August 5th and it was around $41,000, and I sent 0.006 BTC to Cake DeFi. That roughly translates to around $250.
With that corrected, after trying it out for 1 month, my Cake DeFi portfolio grew by $130 from my $250 investment. This is from the price appreciation of the BTC and DFI tokens (mostly from BTC) and the signup bonuses I received as well.
To be honest, it’s kind of hard to track down the real growth of my investment in Cake DeFi because the platform is not as organized when it comes to showing its users how their assets are performing.
I really want to look at how much my portfolio has grown without the price appreciation so that I can see whether or not I’m actually earning from the platform at a quick glance.
Maybe there are trackers out there that can do that, but I don’t know. I had to export all transactions into a spreadsheet just to see the data. But I hope they implement simple but important features to investors in the future.
My Cake DeFi Incident
But moving on, during the 2nd month in Cake DeFi, there weren’t any big changes that happened. Just a small incident.
I haven’t added extra money to this. BTC’s price went down and as a result my portfolio value declined as well. And their APY declined just as you can expect from any platform that offers liquidity mining.
During the 2nd month though, I unintentionally took out all of my BTC-DFI pair, or removed all my liquidity from the pool. It was valued at $235, evenly split between the two.
When I tried to get back in, the amount was lower. It was half of the BTC that got pulled out from the liquidity earlier.
I was stupid because I only used BTC, and did not include DFI. I didn’t realize that you can put them both back in the same pool.
Since I did not know what to do next, I went to the staking page instead because it was “easier” to understand. The remaining DFI were staked and BTC were swapped for extra DFI and staked as well.
This is why my staking shares are now worth more than my liquidity.
And now that it’s the 3rd month, I took a look at how my Cake DeFi has performed and I can’t complain at all with the results.
I started with a $250 investment in this platform, and as of this writing, the value is now at $465. The value fluctuates quite a bit, but it’s around that amount.
From liquidity mining, I have made around $30. Prior to the little incident, I’ve averaged about $0.60 to $0.80 per day, but now the average per day is $0.25 to $0.30.
From staking, I have made around $18. Prior, I was averaging about $0.10 to $0.12 per day, but now it’s at $0.20 to $0.26 per day.
From the freezer, I have only made around $0.48 because it’s such a small amount. If I had chosen to freeze more DFI staking shares, then I would’ve gotten more throughout those two months.
If you choose to freeze DFI, they give you your usual staking APY and an additional % for freezing it.
But I didn’t freeze more since I didn’t have enough shares to freeze.
With auto-compounding on, I’m sure that these numbers will grow by the time I make another Cake DeFi update.
Their Lending Services
In my previous Cake DeFi article, I mentioned planning to dive into their lending product. But I chose not to since the APY was just too small compared to the other products.
That decision apparently was a good choice because since October 21, they no longer offer their lending services to United States residents.
You can’t enter new batches anymore, but if you had joined a batch prior to October 21, you will still get rewarded and your balance will be returned to you once the batch ends.
Total Return
In total, I’ve received around $48 in rewards from Cake DeFi in a span of 3 months, or a 19.2% return, and around $167 is attributed to price appreciation. So the paper gain is $215 or a 86% growth in value.
This is the main reason why I started looking into different crypto projects that generate passive income, or what they call yield farming, because it offers a better return than your traditional investment options.
I’m kind of regretting here that these projects I’m looking at have been in my radar for some time, but I never really looked into them and invested.
If I had, those lost months would’ve turned into profitable months.
Granted though, there are risks involved in these projects because we don’t know how long they will last, if people will adopt them and use them, or if the platform is legit at all.
That is something that you will need to take into consideration when looking at these crypto investment platforms. Do your research!
Right now, I am looking at different projects and thinking of trying them so I can share with everybody how they are performing and whether I would add them to my streams of passive income.
Some projects that I’m looking at right now is the famous PancakeSwap, which is similar to Cake DeFi, and another is called the Anchor Protocol, a crypto savings account.
I’m really excited to try different profitable projects so I can share them with you!