You personally know many crypto enthusiasts who just buy cheap alts and memecoins without any plan. While it can be fun throwing dirt at the wall to see what sticks, a serious crypto investor must adhere to a system and have a good grasp on how to build a balanced composition of assets capable of delivering excellent results in the long run. Tools like automated portfolio rebalancing and AI advisors make it easier for newcomers to stay safe while investing.
Cryptocurrencies can be used as hedging instruments in a typical portfolio as shown by the uptick of institutional investors including them in their holdings (over 71% of surveyed managers according to Ripple). Unfortunately, the average retail investor is behind the curve.
DeFi portfolio management is slowly turning into an extremely important area of expertise. Many practices are used by professionals may seem uncomplicated but the vast majority of crypto enthusiasts forget to adjust asset compositions, assess risks, and update their trading routines to ensure that their portfolios perform optimally.
Thanks to the rapid expansion and technological evolution of the DeFi sector, individual investors have access to exceptional tools. MorningStar reports that over 60% of all crypto owners are working with financial advisors. According to Business Wire, the number of experts who are willing to allocate capital to cryptocurrencies is also growing with up to 56% of all advisors saying that they are planning to add crypto positions to their holdings and over 22% of active managers already having significant positions in the market.
However, you don’t have to rely on the word of a professional in the world of finance if you don’t like the idea of working with advisors. Many blockchain investment tools are designed to simplify decision-making by automating some processes and providing sufficient information to users. In the decentralized finance ecosystem, you can find a variety of useful tools.
Many of them can be categorized as follows:
Using these instruments is a good idea if you want to stay in control of your finances and not mist something crucial. While you do not need expert-level knowledge of the crypto industry and investments in general, it is hugely important to dedicate a meaningful portion of your daily life to learning and monitoring the market.
Before exploring instrumental components of contemporary DeFi investment strategies, we want to give several tips to beginners without any prior exposure to cryptocurrencies or financial markets.
If you are at the starting line of your investment journey, do the following:
Newcomers must pay extra attention to risk management in crypto and avoid working with unfamiliar or novel DeFi apps until they gain sufficient experience and confidence. With over 60% of crypto owners not understanding the fundamental aspects of cryptocurrencies and blockchain technology, the best piece of advice we can give to newcomers is to get some experience asap.
Now, let’s talk about some of the instruments that you may find useful while trying to build an efficient DeFi strategy.
You can find a variety of centralized and decentralized platforms offering various asset management tools. Finding the right instruments in the sea of options can be difficult even for seasoned veterans who have seen it all. We will give you several interesting options that will either improve your holdings or help you manage assets easier.
This platform offers a user-friendly wallet that has all the necessary functionality to easily interact with a variety of decentralized protocols. However, the best thing about Rivo is the variety of investment options accessible in just a couple of clicks. You can track all positions in the wallet, swap tokens, and earn additional crypto using a plethora of options. For instance, it is possible to invest in the Base Yield Index for 22.7% APY instead of picking individual projects.
If you want to keep your hand on the pulse of the sector, using this app is a great idea. It is a solid source of data and a leaderboard where you can always find the most searched, discussed, well-performing, and promising protocol. While it is not as detailed as DeFiLlama, the information here is presented in a compressed form to quickly give you only the most crucial bits of data for informed decision-making.
Dune Analytics is a data aggregator that has a variety of interesting ways to provide on-chain analysis for EVM-compatible projects. You can find a variety of custom graphs, tables, and raw numbers. Unfortunately, you won’t find much information about other blockchain networks but Ethereum is the biggest DeFi network so many investors don’t need anything more from their analytical tools. Combine it with efficient decentralized asset tracking and you will have a great source of insights.
The tools mentioned above are only examples of various applications, websites, and protocols that you can use to efficiently manage digital assets and DeFi positions. Do your own research, experiment, and do not be afraid to go out of your comfort zone.
Product updates, DeFi tutorials and insights from our community
