Part 4/8:
When evaluating our DeFi investments, it is crucial to benchmark performance not just by the dollar amounts invested or obtained upon liquidating positions, but against our potential earnings if we were merely holding our assets. This method provides a more holistic view of performance. In recent volatility, such as Ethereum's price shifting significantly within a week, understanding profitability amidst these fluctuations is vital.
Assessing Position Over Time
For instance, comparing the Ethereum and D-sycn liquidity pool strategies shows that, despite the turbulent market, I am still $592 ahead versus simply holding assets. By actively participating in liquidity pools and making strategic adjustments, my earnings surpass what would have been achieved through HODLing alone.