DeFi – Sacrifice Immediate Gratification

It’s Always A Dark Time

Bear markets have a way of absolutely crushing everything, especially DeFi, and this bear market is no different. Look at the beloved CAKE, which was trading at approximately $44 at the peak. It has been as low as approximately $4, which means that if you were relying upon it as a form of income, you would have had to take a 90% drop in “salary”. That’s pretty harsh by any standards. PancakeSwap is however one of the more established and widely utilized projects. Many DeFi projects have taken a much harder knock. It’s extremely unsettling selling a token at 10% of what it’s worth compared to when “things are going well”. Therefore, I completely understand @niallon11, and the point he made in a recent article. The long and the short of it is, he would rather supplement his Crypto income than sell assets at these prices.

Rather Hibernate With The Bears

This is one instance where it’s literally better to forget about your DeFi investments and begin focusing on other endeavors. There is a lot that one can do within the Crypto space. You don’t necessarily have to look outside of the space in order to find an alternative. In this way, you can compound and grow your holdings, rather than have to settle for “poor rewards”. When you compare what you can earn now with the potential earnings at a later stage, it makes a lot of sense to rather put off immediate gratification. There are numerous benefits to adopting this approach.

  • The working capital (staked allocation) increases
  • Rewards are increased substantially over the long-term
  • Existing holdings are “preserved” through a reduction of supply

Not only is this approach beneficial for investors, but also for the market. A reduction in sellers ultimately helps to provide additional support for the price. Projects that “collapse” are in essence void of support. In other words, the sellers far outweigh the buyers. This dynamic was exemplified during the LUNA collapse. As issuance increased and hit the market, there were simply no buyers to match the sudden acceleration of issuance. There is obviously a lot more to this story, but you get the idea. Compounding during a bear market helps you, the market, and the project in question.

A Luxury For Some

Now, some are heavily reliant upon their DeFi income, and unfortunately, must settle for a lot less from this current market. Long-term investors, on the other hand, are in a position where, if they so choose, can rather strengthen their positions. This is the far superior approach, in my opinion. For the simple reason that it benefits everyone. Everyone is a winner in this scenario unless the project in question completely collapses.


When you consider that you are likely to have a lot more capital at your disposal by utilizing this approach, you begin to realize that you will simultaneously be able to expand your exposure. This will enable you to create and add more mechanisms into your “economy” and continue the journey of “compound and grow”. This can literally be a game-changer, as your working capital will be substantially higher. Having capital at hand is extremely powerful. Oftentimes there are events in the market that only offer a very limited window of opportunity. Having cash or assets at your immediate disposal gives you an upper hand and advantage over much of the market.

Final Thoughts

One must consider the unique factors and dynamics at play, as everyone is in a unique position financially. What can work for one, may not necessarily work for another. However, unless you “take stock” and begin brainstorming, you are unlikely to do anything differently. It is often the simple adjustments and tweaks to an existing strategy that make all the difference.

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