How to interact with defi protocols

Interacting with defi protocols requires a compatible web wallet such as MetaMask. After visiting the web app of the protocol in question, such as Yearn Finance, you will be prompted to connect your MetaMask wallet to the site by clicking the verification message that pops up.

Thereafter, any time you wish to interact with the Defi protocol, such as to deposit ETH into one of its Smart Contracts, a similar pop-up will appear. This time, your transaction will be broadcast to the Ethereum network and you’ll be charged a fee.

Any subsequent transactions will follow the same process, including staking assets, unstaking, and collecting any tokens that have been earned as yield. In each case, you’ll be required to wait anywhere from a few seconds to a few minutes for the transaction to confirm on the Ethereum network.

Deposit WBTC on Yearn Finance

Here’s an example of the steps you would take to initialise a yield farming strategy. In this case, we’re going to deposit WBTC (Wrapped Bitcoin) into a vault on Yearn Finance:

1. Make sure you have WBTC stored in your Ethereum MetaMask wallet. (If you don’t, you can buy it on SushiSwap in exchange for ETH.)
2. Visit Yearn Finance and connect your MetaMask wallet when prompted.
3. Select WBTC from the available vaults and click the dropdown arrow to the right of the WBTC row.
4. Enter the amount of WBTC you wish to deposit or just click ‘Max’ and then ‘Approve.’
5. Approve the two transactions that will pop-up in MetaMask. The first will authorise Yearn Finance to store your WBTC in its smart contract and the second will transfer the WBTC.

And that’s it. You now have WBTC stored in a Yearn vault and will earn the displayed APY for as long as your assets remain in the vault. When you wish to withdraw, simply reverse the process described above.

Smart Chain DEFI alterntives to Ethereum

While the majority of Defi activity revolves around Ethereum, there are similar protocols and products available on smart contract networks such as TomoChain, TRON, Binance Smart Chain, Avalanche, and Matic.

Interacting with their respective protocols entails the same process – you can even configure MetaMask wallet to connect to these networks – but with the bonus that transactions are much faster and cheaper than on Ethereum.

Despite the advantage these newer blockchain networks have in terms of speed and fees, they are less popular than Ethereum. This is because of the deeply entrenched Defi ecosystem that has formed around Ethereum. Thus, Defi users tend to tolerate Ethereum’s shortcomings on account of the many opportunities it provides for investing and growing your crypto assets