Oasis DeFi Platform
What is Oasis?
Oasis is a platform for decentralized finance launched in November 2019 by MakerDAO.
You can use it to exchange token,borrow DAI (stablecoin soft-pegged to the US Dollar) and earn savings.
Secure protocol built on Ethereum
Oasis is built on top of audited and formally verified smart contracts created by Maker, the industry leader in secure decentralized finance.
You—and only you—control your assets. Oasis is a decentralized, non-custodial platform, accessible using an Ethereum-supported wallet.
“Decentralized Finance (DeFi) is the movement that leverages decentralized networks to transform old financial products into trustless and transparent protocols that run without intermediaries.”
Why I decided to use it?
Personally I was very happy with my Crypto.com app account with good staking benefit (up to 16%). Yet, I wanted to stack Ethereum to prepare myself to become a main validator with 32 ETH for Ethereum 2.0 and earn validations rewards.
Meanwhile I was accumulating ETH I was a bit disappointed with the staking reward I was getting (only 3% earning per year) which is still incredible compared to traditional saving account but far from other staking rewards (CRO 16% per year).
Afterward, I heard a lot about DeFi and I started to do some research about it. I found out it could resolve my problem by optimizing my earning.
I can still play the long term HOLD and getting profit from it. I looked on several solutions and I’ve chosen the one from the best organization in this area: MakerDAO. So I followed up and went on the platform linked to the organization: Oasis.
- Buy Ethereum
- Get Metamask
- Transfer fund to Metamask
- Borrow DAI
- Reinvest your DAI
- Pay your Debt
First you need to buy Ethereum. I suggest you to buy on Crypto.com app which is a great application to enter the crypto world easily. You can buy crypto by your credit card or bank transfer (no transaction fee at this date) and you can download the app on this link. You will see how great is this app is with the review I’ve made on this article.
Second Step will be to have a web wallet. The easiest way is to have Metamask a google chrome extension or directly on your Brave crypto wallet. Brave is an amazing web browser and you can find why on the article I’ve made here. You can download Brave on this link if you want to support the website. So now we need to transfer our fund to Metamask. Normally you can copy your crypto address on Metamask.
Transfer your fund to Metamask
Now you can go on your Crypto.com app: Crypto wallet -> ETH -> Transfer -> Withdraw.
Withdraw your ETH to your metamask address you’ve copy. Once done your should have your ETH on your Metamask!
Go on OASIS Borrow to start and connect your Metamask. Now let’s start borrowing!
As you can see their is currently NO FEE on borrowing with ETH and BAT.
So what are we doing right now? We are borrowing DAI (USD stablecoin) at 0% Fee.
Yet as you can see you have something called liquidation ratio. If what the value you have in collateral is below this line you will lost the amount you borrowed plus liquidation fee 13%. We will make several scenario to see what can happen.
Let’s say I borrow 1000 DAI (1000$), put 10 ETH as collateral and have as above 150% of Liquidation Ratio.
In this bad case the price will go down and goes below your liquidation ratio. In this example ETH goes under 150$.
You will loose the amount you’ve borrowed (1000$). You will have a 13% penalty because you went under liquidation ratio (130$).
In this case you will loose around 1130$ of ETH. Moreover your ETH have less value. You have to understand the risk of it as their is in any financial market.
In most cases you don’t put you at risk and are putting a good amount of collateral to be sure you are well above liquidation ratio.
In that scenario price almost didn’t move. So you had change your DAI to CRO to stack them 1 year at 16%.
After this year you decide to pay your debt. So you pay back what you paid 1000$ in DAI which you’ve converted from CRO and your Ethereum and have earned at 16% during this time.
Now let’s say that Ethereum price rise up. So you still have your collateral that has more value right now and you have earn CRO at 16% during one year.
You are winning a lot! Imagine that CRO also have a better price than where you made your deposit, then you had made a great investment.
You won from staking and from Ethereum price rising up! Eventually, you can easily paid your debt with the profits made.
So add value according to your economical situation. Play with finance will always be risky so be careful there is no guaranteed money. Always look to be above the liquidation ratio and normally if the market stands or go higher you should make profit.
When you have set up your borrowing information and collateral you can generate the amount of DAI you want to have.
In my scenario I have a collateralize ratio up to 280%. Right now ETH price is at 212$ so I’m well above my liquidation price which is at 112$ ETH.
Reinvest my DAI
After generating my DAI I will go again on my crypto.com app and look at my DAI deposit address.
So go on your wallet -> transfer -> deposit -> DAI. Copy the address and from OASIS in your Wallet Balance click on send in the DAI line. Then enter the amount you want to transfer and paste your crypto.com DAI address.
Wait for the validation of your transaction (around 5 minutes) and you will have DAI in your crypto.com app.
Then you can stake at the high earning rate of crypto.com:
- Keep it in DAI up to 10% (*if less than 500 MCO stacked)
- Change it into CRO and earn up to 16% (*if less than 500 MCO stacked)
In the first case you will be sure to earn 10% of your earning. In the second one it is 16% but the CRO price can go down or up which can impact your return on investment!
Pay your Debt
When you decide that you want to close your smart contract loan you can easily do so by going into Paying back button in Oasis.
It will close your Smart contract and here it comes to an end!
PROS & CONS
Decentralize finance is a very interesting tool which has a lot of benefit. Let’s have a look at the advantages and disavantages.
You can earn from this platform:
- stability fee low (even 0%)
- Flexible reimbursement without time constraint
- Decentralize leverage if Ether price rise up
No third party and you keep your privacy. You are not tracked. Sites is fully decentralized but teams works on security. It is a main subject very well handle with constant improvements and audits.
Moreover you don’t risk a centralize entity to stole and go away with your fund, it’s fully yours. Their can’t be any frozen account which is a big plus.
Financial risks from value as we saw earlier:
Stability fee (6% for USDC)
If their is a hack their is not centralize company to help you (even if in reality MakerDAO foundation find way to help his users).
Indeed, most of the time institution like banks are keeper of your funds and guarantee the security of it and provide you a support team for any problems.
Finally I gave you all my knowledge about OASIS and Decentralized Finance. It’s up to you to use it. I hope you have learn new things.
in my opinion, I have found a good answer at one of the issue I have. Now i have to make sure everything goes well until I have my 32 ETH!
Don’t hesitate to reach me if you have any question about this article. Have a good day!