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Unlocking DeFi, and Overcoming Overthinking.

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Web3 Matters
October 04, 2023

First of all, THANK YOU for your tremendous support with the launch of Growth Bytes! The response has been incredible, and we will work even harder to keep the value coming your way.

Today, we’re diving into:

  • 📈Empowered Investor: Unlocking DeFi. A guide to Uniswap V3.

  • 🔧Growth Toolkit: Overcoming Overthinking. ID Rugs with RugDoc.

PLUS: 

  • 💡Community Highlight: Meet Gentle Tornado.

  • 🔊Spaces Alpha: Surviving Struggle and Powering Up.

Web3 Matters

Hire our marketing services and share your vision with the world by building a community.

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📈Empowered Investor

We had our Liquidity Masterclass this week with our special guest Jake Call. Here’s everything you need to know to start investing.

Unlocking DeFi 🚨(8 minute read)

  • TLDR:⏰ 

  • DeFi allows us to maintain ownership of our crypto while pushing the entire DeFi movement forward.

  • Yield farming allows your crypto to make you more crypto.

  • Understanding how Yield Farming works is the first step to take.

  • Know how to mitigate the risks and to protect your crypto from loss.

DeFi vs. Traditional Banks: A New Way Forward☀️

Ever felt like banks have way too much control over YOUR money? Fees, regulations, and let's not even get into those tiny savings account interests.

Why DeFi Changes the Game:

  1. Control is BACK in YOUR Hands:
    In DeFi, there's no central entity manipulating your funds. Your money, your rules.

  2. Fee-nominal Savings:
    Those fees you pay in DeFi? Mostly under 1%. And here's the magic, they go straight back to the community. No middlemen, no corporate giants.

  3. Say Hello to REAL Yield Rates:
    That 0.01% your bank offers? Cute. With DeFi, yields are on another level.

In our Space, we spoke about one specific area of DeFi called Yield Farming. And here’s why you should care👇

“It allows you to put to work the crypto you are already holding, and to use it in a way that supports the ENTIRE Decentralized ecosystem,”

What is Yield Farming?

We take advantage of DeFi protocols to earn a return on our assets. You're essentially lending or staking your crypto to earn more crypto.

What happens with your pooled crypto?

You're typically providing liquidity, which means you're putting up your crypto so others can use or trade with them. This small detail has massive implications, and is what sets DeFi apart from the old way of doing things.

For a deeper look into how this works and how it’s different from traditional finance click here (specific to the DEX Uniswap which we are about to cover). 

How DeFi is different from our current financial system.

So how do we get started with Yield Farming? This is where Uniswap V3 comes in.

Uniswap V3 is a Decentralized Exchange (DEX) on the Ethereum network. It allows us to swap our Ethereum tokens for other ones, and we can also access Liquidity Pools where we can start earning fees as rewards.

Liquidity Pools: The Basics 📈

The first thing to understand, is that we are depositing Trading Pairs into a Liquidity Pool. This means that we are putting in the same amount of two different tokens at once, which vary depending on the pool that we choose.

So… why? Let’s take, for example, an ETH/USDT Pool. This is a pool where investors swap these tokens for one another. It requires both of these tokens to be in balance, to do its job.

Takeaway: Whenever you're looking to jump into a pool, make sure you understand both tokens in the pair, their volatility, and potential use cases.

What happens to our funds when they’re deposited in the pool?

As trades happen in the pool you've contributed to, transaction fees are charged. These fees are distributed back to you based on the percentage of the liquidity pool you've provided.

Here’s a video that sums this up, and goes deeper into everything we’ve covered so far.

Before going any further, let’s discuss some risks.

Impermanent Loss💸

This is an important topic, so let’s spend some time to understand it.


We know that we deposit tokens into a DEX as pairs. As the price of these tokens rise or fall, the balance of these tokens in the pool might shift.

Impermanent loss happens when the price ratio (the difference in price between the two) changes compared to when you deposited them. Why though?

At the heart of impermanent loss is the way Automated Market Makers (AMMs) like Uniswap work. Here's a breakdown:

(if you’re a visual learner like me, check this video out.)

BALANCE BY AUTOMATION: Platforms automatically adjust these token ratios to make sure the pools stay balanced. This process can shift the amount of each token you put in.

PRICE CHANGES: Say you deposit equal values of Tokens A and B. If Token A's price goes up, traders buy it from the pool, reducing its amount. In exchange, the pool gets more of Token B.

MISSED GAINS: If you had just held Token A outside of the pool, you'd fully benefit from its price rise. But inside the pool, you now have less of the risen Token A and more of Token B.

TEMPORARY VALUE DROP: This shift in pool value versus holding separately is "impermanent loss". It's only "permanent" if you withdraw during this time. If prices drops back down to when you first entered, the loss disappears.

In a nutshell, impermanent loss is a potential side-effect of how automated trading platforms balance assets, and it can mean missing out on some gains during big price changes.

It’s important to take this into consideration beforehand by thinking about the profit from fees vs potential impermanent loss.

Don’t worry, here is an amazing tool to do it for you. Huge thanks to Jake Call for creating this.

For a high level deep dive into the math and research behind Uniswaps protocol, click here. 

Here are some other risks you should be aware of, and how you can protect yourself from them.

Know that Uniswap is one of the most trusted and established DEX’s out there, but ALL protocols are vulnerable.

Smart Contract Vulnerabilities

Even though contracts might be audited, there's always a risk of undiscovered bugs or vulnerabilities that hackers could exploit.

SOLUTION: Only invest with thoroughly audited platforms and those with a proven track record.

Rug Pulls

When creators of a new token withdraw all their liquidity from a pool, it leaves you with worthless tokens.

SOLUTION: Stick to well-known tokens with a transparent team and a history of trust. Look out for unusually high returns, they can be a 🚩.

Gas Fees

Especially for us who have only a small amount to invest. Gas fees can eat away any returns you get.

SOLUTION: use platforms (like Uniswap) that have less expensive layer 2 options (like Arbitrum, Polygon etc.) or have gas fee optimization built in.

That was a lot…

Congrats on making it this far! You’re well on your way to becoming a DeFi master! In our next Newsletter we will cover:

  1. Finding the right pool for you.

  2. Concentrated Liquidity, Uniswap V3’s secret weapon to maximize gains.

  3. Tools to guide your research and monitor your investments.

In the meantime, check out Jake Call’s YouTube channel to dig in further. Also, check out BuildrMetrics that he created to make Yield Farming on Uniswap way more accessible!

🔧Growth Toolkit

Weekly tips and resources to grow as a person and as a web3 builder.

The Overthinker's Guide: How to Break the Loop and Trust Yourself Again 🧠 (5 minute read)

  • TLDR:⏰

  • Overthinking kills creativity, wastes time, and breaks confidence.

  • The first step is to identify when this cycle is happening

  • There are many helpful tools to break free, all of them take practice and finding which works best for you.

Ever find yourself in a spiral of thoughts, analyzing every decision, replaying conversations, and predicting imaginary scenarios? You're not alone.

Overthinking is that uninvited guest that overstays its welcome, leaving you exhausted. Today, let’s show it the door.

Overthinking: A Mental Hamster Wheel🧠

I have this problem when I edit videos: I waste days overthinking every detail, and eventually become overwhelmed and frustrated. It kills my creativity. Sound familiar?

Here’s the thing: Overthinking is often born from a place of fear—fear of the unknown, of making mistakes, of not being enough. Recognize this, and you're a step closer to breaking free.

Toolkit to Unwind That Mental Knot:🔧

Tip: Choose one and see how it works for you. If it’s not doing the trick, come back and try another. Number 2 and 3 work best for me.

1. Set Time Limits: Give yourself a set amount of time to think about a decision. Once the time's up, make the best choice you can with the information you have.

2. Journal It Out: Sometimes, physically writing down your thoughts can offer clarity. It’s like having a conversation with yourself on paper. I call this process ‘Brain Dumps’ and it works 90% of the time.

3. Accept Imperfections: Newsflash! No one's perfect. We all mess up. So, why aim for perfection when excellence can be just as rewarding? Check out the 80/20 rule for more tips.

4. Limit Information Intake: Don’t drown in the sea of information. Sometimes, less really is more. On X, lists are your best friend. Create a list with people who align with your work.

5. Break Tasks into Bite-Sized Pieces: Staring at a big task can be daunting. Split it. Take it one step at a time.

6. Meditation & Mindfulness: Remember when I talked about practicing presence? It's golden here. Stay in the moment. Let go of what's past and what’s yet to come.

7. Seek Perspective: Talk to someone you trust. Sometimes, a different viewpoint can make all the difference. X is full of incredible people who want you to succeed. Find your circle and lean in (DM Victor or myself anytime for this).

8. Routine & Structure: Having a daily routine can prevent your mind from wandering into the land of overthinking. Dedicate chunks specifically to focus on tasks. When you’re finished, intentionally clear your mind and shift.

Final Thoughts💚 :

Overcoming overthinking is a journey, not a destination. It's about trust—trusting yourself, your decisions, and accepting that not everything needs dissecting.

Life’s too short, and those imaginary scenarios? Well, they probably won’t happen.

So, the next time your brain decides to go on an overanalyzing marathon, remember: you’re in control. Pause, breathe, and steer your thoughts back to the present.

Action Step: Today, jot down one time you caught yourself overthinking. What triggered it? How did you feel? And most importantly, how did you pull yourself out of it?

DeFi can be Safer with Community Tools: Meet RugDoc 🥼 (4 minute read)

Few people understand DeFi and its risks. But there are powerful online communities that are educating themselves for the future of finance.

RugDoc is helping people avoid losing money to scams or malicious projects by providing risk ratings, reviews, and audits for various DeFi projects across multiple networks.

The idea is to provide tools and information that empower users to take control of their crypto investments by giving them high-quality tools, content, and services that make DeFi safer.

The website of RugDoc also offers a calendar that shows the upcoming farm, token, and NFT launches, as well as a blog that showcases the latest news and updates about DeFi projects.

Notice, this is not the only tool, there are multiple tools you can use to achieve similar goals, but this time we decided to recommend it because of its educational component alongside their community aspect.

Two features that we liked are the risk ratings and the reviews and audits. This is something that every investor and trader should always consider before the deployment of capital.

💡Community Highlight (2 minute read)

Recognition for our Web3 Matters community members who are making a difference.

Meet Gentle Tornado🙏

If you want to tap into a fire for life that is unmatched in this space, you definitely need to connect with GT.

Gentle Tornado has made it is mission to spread positivity and gratitude around the world, and he does it in a way that makes it IMPOSSIBLE not to get energized and motivated to conquer your goals. I’ll let this do the talking 👇

Here’s how deep his conviction runs…

He is running the Hiped Foundation, a not-for-profit organization with a mission of supporting, promoting, and developing mental health awareness, education, and access for at-risk teens and young adults.

GT and his foundation are dedicated to empowering teens to thrive by nurturing emotional intelligence, fuelling positivity, and inspiring growth. One look at any single piece of his content, and it’s clear: this is his true calling.

This hits home on a personal level. I (Trav) am a trauma nurse, and I’ve seen first hand how vulnerable at-risk teens are in my community. It’s heartbreaking and brutal.

A foundation like this has so much power to change the lives of kids who need it the most, and keep them from a life of suffering and crushed self worth.

GT is already changing lives, and with your support, he can change the world. It's an honor to support him and his work.

TheHIPEDFoundation

Revolutionizing the way mental health is approached and addressed among teens and young adults

www.thehipedfoundation.org

Want to be featured in our next newsletter?

Join us for our next episode of Web3 Matters 👇

🔊Spaces Alpha

Every Friday at 3 pm EST / 7 pm UTC. 

This will be an episode all about personal growth.

We will be sharing stories of victories and failures, and the actionable lessons we took away to support YOU on your journey.

These stories will help you harness your mindset to grow as a content creator, founder, solopreneur and to be a better human for your people.

We have the honor of hosting @LuzzoticaLong, a High Performance Coach on a mission to empower solopreneurs with high leverage habits, automations and AI.

We’re about to get real.

Check out the link below and set your reminders ✅

W3M: Growth in the Grind

Our weekly spaces enhance your growth while highlighting the best in Web3.

twitter.com/i/spaces/1OyJAWMEXPnKb?s=20

Finally, we'll be giving away exclusive thank-you gifts to our early supporters, so be sure to invite your friends to subscribe to The Growth Bytes.

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