Investors are seemingly throwing money at decentralized finance (DeFi) projects. It is apparently the cool kid on the block..chain. There is currently, (supposedly) around $40 billion locked into DeFi projects. So what could possibly go wrong?

Fees, that’s what. Ethereum’s surge in fees has caused a lot of frustrated users. This comes down to the greater demand placed on the Ethereum network. The more traffic, the busier the miners, the greater the fees they can command.

Hold the gas

Ethereum, the blockchain project allowing developers to build decentralized apps, otherwise known as dapps, which use Smart Contracts, has seen its fees gain almost 400% since January 1st 2021. This price hike has pushed traders to suffer greater costs on each of their transactions. Additionally, it has resulted in debates over how much potential Ethereum can possibly have for mass adoption. 

According to Glassnode’s status, Ethereum transaction fees have hit a new all-time high of $898,000 for one single day. It is currently around $18 per transaction and growing fast.

Gas fees, which measure how much a transaction costs, are in constant flux. The price gains, as the amount of usage of the Ethereum network increases. While these fees show that Ethereum is facing heightened demand, it also means they make it more expensive to transact and therefore potentially untenable.

DeFi Prime, which is a website that tracks the De-Fi sector has counted over 230 related projects offering everything from prediction markets to lending and borrowing. It’s a huge choice of projects offering very similar services. So how do you choose?

What about YFI?

YFI token has become one of the most popular and potentially talked about tokens and projects on the Ethereum network. That is because, as the native crypto of the Yearn.finance protocol, it focuses on automated yield farming strategies, or ways to automatically get money from your money. What’s not to love?

Well, for one it has so many projects in its ecosystem that it’s quite confusing, and for two, it has many copycat projects. 

YFI tokens have gained massively  in value though, and even passed $25,000 at one point. The platform Yearn Finance is very similar to plenty of other yield farming platforms, where a user can deposit any ERC20 stablecoin and get an equal amount of its own tokenized stablecoins. This stablecoin can then be lent out to developers and other projects for a yield. The beauty of a product like this is that it looks for the highest yield to help the user capitalize on his credit. Users must pay a small fee for this.

What are vaults?

Yearn Finance like many of the other projects that have copied YFI use Vaults  to temporarily hold stakeholders profits. 

How about Compound?

Compound is an algorithmic protocol which allows users to earn interest on their lended crypto, or enables them to borrow assets against collateral, for instance for building new projects. 

The smart money goes to Rocket

The smart money though is already shifting to Rocket Vault Finance, an impressive project which has managed to break away from the cookie-cutter of De-Fi projects. This particular vault lending project is different. It has machine learning AI at its core. The more it is used, the smarter it gets at building strategies and bringing yield to its users. It reports returns of 100+% APY consistently delivered in both bull and bear markets. And perhaps best of all, it is free to retail investors. Not too shoddy.

And what’s more, users funds are insured in their vaults using centralized exchanges like Binance. Plus, their strategies integrate with the most liquid & established centralized and decentralized exchanges, including names like Binance and Bitfinex.

Here’s what retail investors get for free: 

• Investors can deposit funds in Rocket Vault

• There is no KYC if users deposit up to $10,000

• Rewards compounded automatically

Institutional investors are well-served too, and as you’d expect fees are commensurate with deposit and performance.