Another two months since my last report and perhaps the two busiest and most profitable months in my life. Which on the flipside is why this site has been sadly neglected.

When lockdown started I went on a search for new opportunities and landed on trying to replicate some of my successes as a professional gambler over into cryptocurrency. Well, I’m pleased to say that since the end of June that has been working out very well. It’s also been my sole focus and so the story I will tell in this post.

Please bear with me! I won’t be saying exactly what I’m up to because I don’t want to give up my edge. But hopefully, this will give a general idea.

Defi And The Rise of Yield Farming

If you have an interest in cryptocurrency you will probably have heard of Defi (decentralised finance). A niche of cryptocurrency that has been exploding in popularity due to the huge yields on yields on offer and the rapidity of new tokens being launched.

Graph from DefiPulse.com

Decentralised finance is the name given to financial services built on a blockchain without any centralized control. Think everything banking (lending, saving, insurance, investments), but without the banks. Currently, Defi is mainly built on the Ethereum network.

In late June, when the token COMP launched, I shifted focus from algo trading to Defi. A governance token from Compound Finance. The launch of COMP, although not the first governance token, was the birth of yield farming.

Yield farming refers to the act of farming governance tokens for profit.

Here is a post about one of the more simple yield farming techniques.

By lending or borrowing money on Compound you earn COMP tokens. Which you can currently sell for a higher profit than the cost of borrowing. Which leads to a crazy situation where you can borrow and lend the same currency and earn huge returns. The strategy above has maintained about a 50% APR since July.

Since I may have lost you, just think of yield farming as this:

You deposit your money into a platform. That platform pays you a token it has created out of thin air in proportion to the amount you have deposited. You can sell that token and earn profits.

Yield Farming Inception

But that was just the beginning. Since then there has been an arms race of new platforms being created very quickly that offer new tokens with higher and higher yields. Often returns will be in 10,000% apr plus that lasts just a few days. Before the farmers jump to the next platform.

Why would anyone buy these governance tokens? Well, a new term has been created to describe it. Ponzimonics. Everyone knows these tokens will soon be worthless. But before becoming worthless they will rise in price (as the platform will reward people for holding the token with more tokens) so people believe that if they can get in and out early they will make money.

Ponzinomics comes from ponzi scheme. No wealth is being generated, old participants are simply paid out from new participants money until eventually new money dries up and it all comes crashing down.

So there is a class of crypto trader who try and buy these tokens cheap from yield farmers. Ride the wave up. And sell before the token crashes. I really don’t recommend holding any of these tokens or trying to play that game. Yield farming is relatively safe if you know what you’re doing. Buying these ponzinomic tokens is not.

Arbing The Farmers

But while I am doing some yield farming, it is not my focus. The main thing I have been doing is arbing these new platforms and tokens. Where in a single transaction I will buy and then instantly sell these tokens netting a risk-free profit.

I have been very lucky to get in when I did. At the current rate, new platforms and marketplaces are opening up quicker than the big algo trading firms can keep up. Which means that a small two-man team like my business partner and I can find ourselves a niche.

Every week lots of new platforms and tokens appear. And so the last two months have been a blur of monitoring new token and exchange releases while frantically trying to skill up my Ethereum coding skills.

It’s all very exciting! If you’re interested in hearing more details then keep track of my series on opportunities in crypto. Two posts out so far:

Everything Else

And that’s what I’ve been up to. Here is a few other updates on outstanding stuff that long term readers might be interested in.

P2P Lending

I have quite a lot of money tied up in Ratesetter and Assetz Capital. I still have not got my money out from these platforms. They have struggled ever since Covid hit as withdrawal requests have far outstripped deposits. I tried to withdraw all my money on 13 March and so far have got about 1/2th out.

Weirdly I am starting to think that there is now an opportunity to get into peer-2-peer lending again. Assetz Capital have created a secondary marketplace to sell your loans to other investors, and currently the discounts are huge. Around 9-10%. The means you can lend out your funds and get an instant 9% (on paper return). I think that is probably good value. There is certainly a risk of defaults or having your money tied up for a long time. But 9% seems a good deal.

Having said that returns are too good in Defi yield farming for me to divert money back into p2p lending.

Property

I am currently waiting to exchange on a property that we’re buying in the UK. There are no new updates since I last spoke about it.

Table Tennis Business

My table tennis Amazon FBA businesses have really suffered in the last couple of months. March and April were very good, but since then things have slowed down and we are only doing about 2/3rds of the turnover of this time last year.

Hopefully it will pick up again soon!

This Blog

This blog is doing very well and has a lot of traffic. Which is remarkable as it has been so neglected for the last few months. It is earning as well but I haven’t been keeping track of exact numbers. I think it is making 2-3k a month at the moment.

I do plan on spending more time on it. But it really depends on what opportunities I find. Silence from me means my businesses are keeping me busy!

Conclusion

Well a bit of different report this time. And late as well. But I hope you understand. If anything this blog is about finding opportunities and then making the most of them. “Serendipity – how to be in the right place at the right time” is the unofficial motto of this blog. And I hope this post shows how I put that into practice.

Until next time!