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We Won’t Lie To You. We Had A Milk Road Meltdown Trying to Get Yield Last Night.
Shaan Puri & Ben Levy
March 04, 2022
GM, this is the Milk Road. The email that tells you 1-2 interesting things about crypto every morning.
Prices across the board fell by 4-7% yesterday, most likely because of increasingly aggressive moves by Putin in Ukraine.
In Today’s edition:
🏦 The Milk Road gang tries DeFi
🗒️ Five Nuggets
💰 Funding Friday
🤣 A Meme I loved
The gang tries DeFi
Shaan sent me a text last night:
Challenge accepted.
Today’s email is going to show you step-by-step how I got my money into a 19.34% deposit account in DeFi.
I had never done this before. It was my first hike up Figured It Out Mountain™️
The Gameplan:
Take money out of Wells Fargo
***do some stuff***
Get it into Anchor protocol (offers 19.34% interest on stablecoin deposits)
Visual learner? Here’s the before & after:
How Anchor Works:
Anchor lets you deposit stablecoins (crypto currencies pegged 1:1 to the US dollar)
Anchor gives you a stable 19.34% annual return
Your money is liquid, so you can withdraw at any time
Like all things with rewards, there are risks.
For example, the smart contract could get hacked, or the stablecoin could lose it’s peg. These scenarios are possible, but unlikely.
Sidebar: Crypto is hilarious. If you say “I’m trying to earn 20%”:
Normal people = “how can they offer 20%, must be a scam”
Crypto people = “Just 20%? What is this, a bank for ants?”
But 20% ain’t no joke.
Warren Buffet (aka the goat) averaged a 15% annual return over the last decade. So if I can get 20% as a normal muggle, without researching stocks all day, taking very little risk AND outperform Warren Buffet …?
Sounds too good to be true … Is it legit?
Yes, you can actually get 20% interest.
No, it won’t last forever. Most of these rates are unsustainable (a few months? a year? a few years?). The protocols offer high interest to incentivize people to start using them. Interest goes down over time though.
Yes, there are risks (smart contract risk, stablecoin peg break risk, black swan risk, etc.). DO YOUR OWN HOMEWORK! THIS IS NOT FINANCIAL ADVICE. (my lawyer is giving me the side eye right now).
The downside is that getting money into anchor is pretty painful for a dummy like me.
There are like 20 ways to do it. Here’s the route I chose because I had ETH in my wallet already:
PART 1 - Swap ETH for LUNA
We need to go to a swap exchange for this. There are a bunch. We chose 1inch.io
Quick note - always double check your swapping FROM ETH TO LUNA.
STEP 2 - Bridge LUNA over using Terra Bridge
First off, what’s Terra Bridge? As its name suggests, it's a bridge that allows users to send Terra assets across different blockchains.
In this case, Terra Bridge will allow us to get our newly swapped LUNA from the Ethereum network to the Terra network.
STEP 3 - Swap LUNA for UST using TerraSwap
Now that we have our LUNA on the Terra blockchain, we can swap it for UST.
But first, what is Terraswap and why do we need it?
Terraswap is a decentralized on-chain exchange that will let us swap our LUNA for UST (this is the final token we want).
Quick note - leave a little LUNA for transaction fees.
STEP 4 - Deposit UST in Anchor
Final step. And thankfully the easiest.
Click on the deposit button.
A pop up will ask you to confirm the transaction.
Always one of the most nerve-racking experiences is waiting for that final transaction to go through to make sure you didn’t f*ck anything up.
And voila! It’s official. You’re part of the 19.5% Yield Club and can sit at the cool kids table.
(my face when trying to set this whole thing up)
*like these explainers? Click the feedback button at the bottom of this email to let us know if it’s useful and interesting to you
Five Nuggets 🔍
NYC is the crypto capital of the US: it’s attracted $6.5 billion in crypto startup funding since 2021, 46% of all US fundraising in the space
Users in Iran and Venezuela blocked from OpenSea and Metamask: Users were upset. The companies were just trying to stay compliant, but turns out it was an issue with Infura (their back end provider).
SEC is looking at NFTs that smell like securities: Welp, we all saw that one coming.
Brian Armstrong Coinbase CEO on compliance: A great thread on how he thinks about compliance
Bob Dylan is launching NFTs: Another day, another artist doing NFTs. This time it’s on Solana.
Meme of the day 😂
Funding Friday
You know what time it is - time to check in and see how much funding was dished out in crypto this week.
$320M!
A few highlights:
We invested in a new city (Praxis) along side crazy thinkers like Balaji, Zhu Su, and others. Check out what they are doing. Pretty ambitious to build a new city, check this one out
VALR: A South-African cryptocurrency exchange that connects buyers and sellers of cryptocurrency raised $50M. It’s the largest crypto-related raise ever in Africa. Check it out
Notifi: The self-proclaimed ‘Twilio for Web3’ raised $2.5M. Check it out
Dialect: A Solana-based ‘Smart Messaging’ app that gives you actionable alerts and wallet-to-wallet chat raised $4.1M. Check it out
The Database: Wanna see every co that’s raised in the past 2 months? Click here.
This week's Funding Friday is presented by Free Agency
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You can do it, but let's be real: it’s painful, outdated, and you aren't getting the return you deserve.
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What if you had an agent run your search for you?
Athletes like LeBron and entertainers like Zendaya have teams and agents that manage the "business side of their careers". They get to focus on their craft, while their teams take care of the back end.
That’s what Free Agency does for startup and tech talent. Hollywood-style career management, negotiation, and more for engineers, PMs, designers, marketers, salespeople, etc.
If you’re ready to make a move and want an expert team behind you: click here. (U.S. only for now.)
Catch up on this week's Milk Road daily editions
if you missed an edition this week, we got you covered:
Alright, see ya on Monday!
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