CakeDefi: My Honest Review — Get An Income From Your Bitcoin With Minimal Effort

4 min readJul 15, 2021

What is CakeDefi?

CakeDefi is a platform that let’s you put your crypto work and takes care of all the technical aspects.

But let’s start at the beginning. The team created a narrow purpose blockchain: the DeFiChain, especially tailored for DeFi (Decentralized Finance, as opposed to traditional Finance we all know from banks & institutions). It intentionally does not allow all kinds of Programming and complex smart contracts like Ethereum does. This comes with a great benefit: simplicity and very low fees. The DeFiChain is open source and the community can vote for proposals.

The Chain can be used without Cake through the Explorer, however, the Cake Platform uses the DeFiChain to provide services:

Staking
Lending
Liquidity Mining
A Freezer Program to lock funds on the chain and grant extra returns

How I used the platform

I started my account beginning of the year and so far I am very happy with the results. After finishing my KYC, I transferred some Bitcoin into the platform and converted some of it to DFI, the native token of the chain.

Then I staked some of the DFI tokens which returns about 100% APY at the moment (this was about 300% APY beginning of the year but will of course go down over time). I also lent out some of my bitcoin, which grants between 5–7.5% APY depending on the price of Bitcoin.

Last but not least I tried out Liquidity Mining with a very small amount of my capital, as I just wanted to test it out. Here you provide 50/50 DFI and Bitcoin and receive trading fees but there is the risk of impermanent loss, as the pool will always have to be balanced. The interface will show you an indicator how risky your investment is but still please do your research first.

They recently announced more lending options (USDC, USDT, ETH) for up to 8% return which I think is also quite nice.

I will continue to invest with the platform, but of course diversify with other platforms as well. Never put all your eggs in one basket.

How to invest with CakeDefi

There are a few options how to get your crypto onto the platform:

For my next investments I will probably buy DFI directly on KuCoin and send it via DeFiChain to the platform. With this approach there are no network fees. On the platform I can trade the DFI for any other currency

Pros

Very easy to use overall
Team is very transparent and invested themselves (Quarterly Transparency reports)
Auto-compounding feature
Weekly/monthly notifications about your earnings
Rewards are paid daily (even for frozen funds the rewards can be paid out any time)
Great for long term investors, founders have bought with their own funds and locked those for 10 years
Full tax report can be generated in the app

Cons

Costs to get funds out of the platform needs to be considered (not important for long term holding)
Not your keys, not your crypto — you have to trust the platform with your investment
Founder Julian Hosp has had some negative publicity in the past, I dug a bit and feel I can trust his company with my money. Please feel free to form your own opinion.

Roadmap

I like how actively and openly the team is working on bringing new features. The roadmap contains many items and the past items show that this is not only ambition but the team also regularly delivers on their promises.

Past items:

USDT Lending
Fiat on-ramp
Liquidity mining service
Tax report feature
Referral program update

Current items:

Mobile App for iOS and Android
Lending with new risk profiles
DeFiChainWallet & DEX Integration
Stocks, Commodities and Currencies

My recommendation

I think CakeDeFi is a great place to get started in DeFi and make your first moves. Unlike other anonymous projects, there is a real company behind this project and from what I saw also a great community. Of course do your own research, but I feel the chances of getting rug-pulled are extremely low. Please still don’t invest more than you could afford to lose.

Let me know in the comments if you have any experiences with cake or any questions you would like to know about the platform!

If you would like to start and want to support my work, feel free to use my affiliate link to register. After you put $50 onto the platform and let it work for you, we will both get $30 in DFI. Which is kind of a sweet deal I think.

Cheers and until next time,

n1ce

None of this is financial advice. Please always do your own research. Thanks for reading! If you would like to support my work, consider smashing that like button and/or using my affiliate links to make/safe money:

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Originally published at https://www.publish0x.com.