How do I start using DeFi?

Get started…

There are three main things you'll need:

1. (Crypto)currency

It's not finance without money, and it's not DeFi without crypto. Fortunately, getting your hands on some crypto is easier than ever nowadays.

As DeFi mainly runs on Ethereum, we recommend first getting some Ether (ETH), as you can use this to trade, invest, and pay for transactions.

Most people buying crypto will either use an exchange, or a payment processor (like Moonpay or Sendwyre). For either, if you are making large purchases you'll need to do KYC (Know Your Customer), which involves some simple ID checks.

2. A wallet

You can think of your crypto wallet like the banking app on your phone. A good wallet should let you easily and securely store, send, earn interest and invest.

When choosing a wallet you should check whether it is custodial, or non-custodial. With a non-custodial wallet you have full control over your assets.

Another choice is between hardware wallets (basically a memory stick-type device) or software. The original mobile wallets were prone to hacks and poor UX, so some people preferred to buy a hardware wallet to secure their crypto. Fortunately, with the rise of a new generation of wallets, such as Argent, that are built on smart contracts, you can combine top tier security with the convenience of an app.

Argent uses features such as daily transfer limits, recovery without a seed phrase and easy locking to help protect you. You can read more on our security model here.

3. A little knowledge

We're dealing with the future of finance here, after all. Although you don't need to be an expert, it helps to understand the basic terms and to do your own research on the risks (and opportunities).

Fortunately, you can keep learning about DeFi right here! Here's an article on 'What is DeFi?' to get you started.

Also, you should see this as an ongoing process, so don't hold off just because you're still learning new things.

...then, explore!

Once you have a wallet, some crypto and a bit of understanding, you're ready to try out some investment options. At Argent we've integrated several options to help you get started, including Uniswap, Compound, Lido and Aave.

To make DeFi tangible, we'll spotlight Compound.

Compound

Compound is a decentralized finance (DeFi) project that lets people earn interest on their crypto assets. The interest comes from others paying to borrow. In contrast to traditional bank savings accounts and loans, Compound is entirely autonomous and open source. There are no middle-men.

Because there are no credit scores, loans are based on over-collateralisation.

For a guide on using Compound in Argent, see here.

When you invest with Compound, you will also immediately start earning the COMP governance token as well. This is a great opportunity to learn more about what governance tokens are. Read our guide to COMP here.