How safe is investing on Compound Finance?
Hi folks! Not sure this is the right forum but thought I’d try. Has anyone dug deeper into Compound Finance? I came across a DeFi app - Donut that provides pretty good saving rates, by converting dollars into crypto and lending on Compound. I’m not very familiar with crypto so would appreciate any advice. Would you put your money in Donut?
stay away from crypto
Don’t use the app unless it’s been audited and you trust the devs. Compound isn’t a scam or anything but there is some risk. Recommend you research the protocol a bit more and make your own decision. These interest rates are falling and will likely continue to fall. Biggest barrier to entry is gas fees on etheruem. Also you can use Compound directly. You don’t need to go through an app. Maybe they pay for gas?
Yea - that’s a good point. I’ll check. I just used donut because it came up in the a16z newsletter, and is pretty easy to use. They say it’s also FDIC insured and the risk you take is on Compund.
DeFi has way better returns than BlockFi with similar risks.
My understanding is that BlockFi is just an exchange on DeFi (decentralized finance)like how Robinhood is an exchange on centralized finance
Saw this too, by their own writing... interest is “2-10% roughly”. They make no guarantees, it can lose value. You have a better chance at buying vanguard index funds
2-10% is still higher than any savings rate I could find!
It definitely is, but it’s not guaranteed so how is this different than an index fund with years of data backing the return percentage