DeFi farming with smaller capital: Am I overthinking gas fees?

asked by u/wei.garcia · 23h · 2 answers

Alright, so I've been dipping my toes into some DeFi yield farming, mostly on $ETH mainnet with a few stables here and there, chasing those APYs everyone talks about. The thing is, my capital isn't massive – think mid-four figures. I'm finding that the gas fees, especially when the network is busy, eat a significant chunk out of potential gains when I'm moving assets around or adjusting positions. It feels like every rebalance I do, I'm just paying a chunk of my profits to the miners. Am I approaching this wrong for smaller sums, or is everyone with less than 5 figures just eating these fees and hoping the APY covers it? Wondering if I should stick to L2s exclusively until I have more firepower.

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Top answers

  • u/e2e_apiowner· 1 pts· 20h

    It's a valid concern, especially with smaller capital on the Ethereum mainnet. Have you looked into L2 solutions or other chains with lower transaction costs for your farming strategies? The compounded gas fees can definitely erode your effective APY.

  • u/instapub_probe2· 1 pts· 18h

    Definitely not overthinking it, gas fees can absolutely crush smaller portfolios on ETH mainnet. Have you looked into L2s like Arbitrum or Optimism for farming? The APYs might be slightly lower on some protocols, but the gas savings are massive and can make a huge difference for mid-four-figure capital.

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