In the last few years, we have witnessed the explosive growth of cryptocurrencies. Especially when Bitcoin (BTC) recently bounced back and hit a new ATH of $68,789 on November 10th , 2021. This event has blown a breath of fresh air into the crypto market, which had been full of red lights before. Investors started pumping money into the market through centralized exchanges. However, there is another exciting form of exchange called DeFi. So what is DeFi? And why do you need DeFi portfolio tracker? Let’s take a look!
What is DeFi?
DeFi, also known as Decentralized Finance, is a financial product system that is developed on a decentralized blockchain. In traditional financial products such as banks, a user will own an identity by an authorized organization to be able to use the service. On the opposite side, buyers, sellers, lenders, or borrowers using DeFi can all interact peer-to-peer without having to go through a third intermediary. These interactions are based on a certain platform that is operated by a decentralized network so that it is stricter compared to a company or organization that processes the transaction. Most of the current DeFi applications are running on Ethereum blockchain.
What is DeFi portfolio tracker?
Defi portfolio tracker is a tool that helps investors track the change in the value of coins or tokens in their portfolio. Usually, the Portfolio tracker will connect to a cryptocurrency wallet (such as MetaMask), or be added on cryptocurrency exchanges.
Portfolio tracker’s origins can be traced back to the early days of the industry when DeFi assets were just a small amount to be counted. So most traders were able to maintain their portfolios manually.
However, as the world of decentralized finance grew, so did the number of investing and portfolio alternatives. While DeFi protocols were interoperable and thus subject to community solutions, technology was suddenly not where it needed to be. DeFi portfolio trackers tried to catch up, but because most were derived from centralized finance technology, they’ve always been insufficient for decentralized finance.
Why do you need DeFi portfolio tracker?
In contrast with fiat currency, the value of cryptocurrency fluctuates constantly. This is exacerbated by the fact that cryptocurrency markets are open 24 hours throughout 365 days. The more assets you add to your portfolio, especially ones that change often, the more time you’ll need to track them all manually. Therefore, you will need to use a tool to solve that problem. Plenty of outstanding features of DeFi tracker can be counted as follows:
- Multiple chains management: With a small number of simple steps, you can observe all your investments in multiple chains, whether ERC-20, BEP20, or SPL.
- Setting up financial goals: A DeFi portfolio tracker helps you better understand your crypto holdings as well as any financial investments you are making. Aggregating real-time data from decentralized blockchains allows investors to get an overview of their crypto investments and gauge whether they align with financial goals.
- Diversified investment: DeFi tracker is necessary for diversifying portfolio without being “stunned” or “forgotten” by any coin.
- Awareness of market changes and demands: Cryptocurrencies, in general, have a relatively high degree of price volatility. You can look at the movements of Bitcoin or Dogecoin in early 2021 as an example. Therefore, the utility of DeFi portfolio tracker is an easy way to track those movements and turn them into effective investment opportunities.
You can find some popular DeFi trackers such as DePocket, Blockfolio, Zapper, etc…
As you can see, DeFi portfolio tracker provides a wide range of benefits, making it an excellent alternative for managing your portfolio. Remember to look over a few before deciding what DeFi tracker, and perhaps your choice will be able to support you immensely on your cryptocurrency path.
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