Passive cash flow with crypto while you sleep

CakeDefi
9.5
CakeDefi – Comprehensive Review

CakeDefi

Cake DeFi offers the easiest-to-use and most transparent products and services offering high returns for both beginners and experienced investors.
Deposit $50 in crypto and receive $30 worth of DFI
Last Updated: Monday 3 January 2022
Verified by: John Spencer

Overview

CakeDefi was founded in 2019 by Dr Hosp and U-Zyn Chua (one of the earliest contributors to Bitcoin and Ethereum). Since its inception CakeDefi has gained traction by offering high earning yields by staking crypto and has become a very popular service for those aiming to secure passive income from their purchased crypto.

Positive
  • Multiple options to earn passive crypto
  • Up to $30 in free crypto after sign up
  • Easy to use interface
Negatives
  • Limited crypto coin options
  • High fees for creating certain crypto address
  • Potentially confusing features

User Interface (UI)

Cryptocurrency buying/selling can be confusing for even the most tech savvy of us. CakeDefi attempts to make what some may find very confusion features such as liquidity mining seem relatively straight forward. It also offers an easy to app on iPhone which allows you to make trades and track your crypto

CakeDefi Homepage
CakeDefi Lending Options

A modern and engaging UI that makes potentially confusing features available in an easy-to-use format

How to Buy Crypto on Cake Defi?

Buy CakeDefi
Buying Crypto with CakeDefi is easy

It’s as simple as clicking the “Buy” button. As CakeDefi is not your standard exchange you will then be taking to one of the crypto purchasing partners. The purchase process is done in a just a couple steps and following this your Bitcoins or Ether will be automatically credited to your Cake DeFi wallet.

Earning with Cake Defi

Lending

Lending

CakeDefi’s lending product allows you to generate cash flow from your Bitcoins, Ether and other cryptocurrencies. In basic terms, by locking up your hard earned crypto on their exchange, you receive crypto rewards by allowing CakeDefi to make money by lending your crypto to others for a fee. Each week you will find new BTC / ETH / USDT lending pools. The base lending yield of BTC / ETH / USDT is guaranteed. There may be potential bonus returns on top of it, if the spot price of BTC / ETH gets within a certain price range.

The expected APY (annual percentage yield) may vary from batch to batch but usually sits between 6-7% APY. Before you join a batch, we will show you the expected APY in a completely transparent way. You can participate with any BTC / ETH / USDT amount of your choice. 

Once you choose to participate in a lending pool, your BTC / ETH / USDT will be locked into an option contract for the next 4 weeks.

At the end of the 4 week period you have 2 options

  • You have the option to activate the automatic compound interest feature to automatically enter the next batch which will continue to earn you crypto rewards. By default this the option you will have selected. Your investment amount, as well as the return, are automatically transferred to the next batch, when the standard settings are enabled. You don’t have to do anything else than to sit back and see the returns of compound interest flowing in.
  • Alternately, you can choose to have only your return or your entire capital + your return paid out to your account.

CakeDefi’s lending product does not charge any fees.

Staking Services

Stakingn

At the heart of crypto and what makes it the future of finance is that each transaction is validated on a decentralised network of nodes. There are two different forms of consensus mechanisms in the world of crypto. These are Proof of Work (PoW) and Proof of Stake (PoS).

In the case of Proof of Stake, coins or tokens are transferred to so-called “nodes”, where they then verify transactions. In return for verifying transactions stakers receive staking rewards for providing this service

As of January 2022, Cake DeFi currently support the following coins for staking:

  • Dash (DASH) – APY 5.5%
  • DeFiChain (DFI) – APR 32.8%

One of the major benefits of staking over lending is that with Staking you have no minimum term. You can participate in Staking and take your coins out of Staking at any time (unlike the 4 week fixed term for lending).

Liquidity Mining

Liquidity Mining

Liquidity mining (also referred to as yield farming) is a way to provide liquidity to members who want to exchange their cryptocurrencies on a decentralized exchange. In very basic terms, this a network participation strategy that allows you to provide liquidity (capital) to a liquidity pool on a Decentralized Exchange (DEX). In return, you receive a reward from the specific liquidity pool to which you provided liquidity.

An infographic showing how liquidity mining works.

As of January 2022 CakeDefi offers the following liquidity pools

  • BTC – DFI
  • ETH – DFI
  • USDT – DFI
  • LTC – DFI
  • BCH – DFI
  • DOGE – DFI

As a much more volatile form of income the APYs for certain pairings can exceed 200%. However with this potentially significant gain comes an increased risk for loss. Here CakeDefi explains the various risks of liquidity mining.

Fees

Depositing

CakeDefi has a potentially confusing fee structure. There is no deposit fee when depositing Bitcoin, DFI, Dash, Litecoin, Dogecoin or Bitcoin Cash. Howeve for a first deposit for ETH, USDT, USDC or ERC20 token an address creation fee is charged. As of January 2022 this is $130. Depositing less than this into a new account will result in a NEGATIVE BALANCE.

Holding your funds in your account also attracts no fees.

Trading

Like some crypto exchanges, accounts on CakeDefi pay different fees for trading crypto depending on their account tier level. For Cake Defi the following fees exist for swapping crypto

  • Normal 0.5% fee
  • Journeyman 0.45% fee
  • Pattissier 0.4% fee
  • Confectioner 0.35% fee
  • Master baker 0.3% fee

Withdrawing

Importantly to note Cakedefi is not your typical exchange. As of Jan 2022 they do not offer the conversion from DFI to BTC or other cryptocurrencies or fiat on Cake DeFi. If you want to convert or exchange your DFI token, you may withdraw your DFI to an exchange that lists DFI.

Security

  • Can I trust CakeDefi? Is my Crypto Safe on CakeDefi?

CakeDefi is very transparent about its services. The company officially known as Cake DeFi (Cake Pte. Ltd.) is based in Singapore, and operates under an exemption pursuant to the Payment Services (Exemption for Specified Period) Regulations 2019

At anytime the number of nodes available on the CakeDefi system can be tracked on the homepage. Every node linked to the CakeDefi network can be tracked at their Nodes Status page. Importantly, this also reveals the address where a node’s collateral is held, allowing anyone to independently validate, via 3rd-party block explorer. Additionally, rewards are listed and provided at rewards listing, allowing anyone to independently track each and every reward that Cake DeFi is receiving.

  • Is my crypto held on in the CakeDefi wallet safe?

It’s a very common question. In the case of Cake DeFi, they currently utilise the BitGo Custody wallet solution for all Cake DeFi user wallets. However, like any exchange after purchasing your crypto it is in fact stored on the exchange’s server. This is termed a “hot wallet” whereby your crypto wallet is connected to the internet and therefore is theoretically open to potential attacks.

With regard to crypto utilising the stake/freezer options. CakeDefi states that as they are in possession of, and controls the private keys to user assets being staked, it acts as the custodian of such assets. Hosted masternodes that operate on the internet on a 24/7 basis do not contain collaterals. Collaterals (i.e. user assets) are held in secure private wallets that are entirely segregated from the internet (i.e. cold wallet)

Available Crypto

As mentioned previously, CakeDefi is the not the exchange you would you if you wanted a large variety of cryptos to trade. Instead, its benefit comes from the earning features available to users. As such as of January 2022 it offers a relatively limited selections of cryptos

For its lending services the following cryptos can be utilised

  • Bitcoin (BTC), Ethereum (ETH), USD Coin (USDC) or Tether (USDT)

For its stake services the following cryptos can be utilised

  • Dash (DASH), DeFiChain (DFI)

For its liquidity mining serves the follow cryptos can be utilised

  • Bitcoin, Ethereum, Tether, Litecoin, Dogecoin, DeFiChain

Customer Service

CakeDefi utilises both Twitter and Email as a way to contact their customer support. However support is noted as minimal on Twitter, the company explains this by mentioning that they are unable to assist with account-specific issues via Twitter

What countries does CakeDefi operate in?

CakeDefi operates in most countries in the world including Australia, UK, Singapore, USA – excluding New York and most of Europe). The specific countries ban from creating an account and using CakeDefi are those which are identified by the MAS for the purposes of regulations promulgated under the Monetary Authority of Singapore Act (Chapter 186) of Singapore, the United Nations Act (Chapter 339) of Singapore or the Terrorism (Suppression of Financing) Act (Chapter 325) of Singapore

Excluded Countries/States

Albania, Bangladesh, Belarus , Burkina Faso, Burundi, Cambodia, Central African Republic, Cuba, Democratic People’s Republic of Korea, Democratic Republic of Congo, Haiti, Iran, Iraq, Lebanon, Libya, Mali, Myanmar, Nicaragua, Pakistan, Somalia, State of New York, Sudan, South Sudan, Syria, Uganda, Venezuela, Yemen and Zimbabwe

CakeDefi vs Coinbase

Cakedefi vs CoinbaseEase-of-Use vs Low Fees
VS
Sign Up Bonus
$30 FREE CRYPTO
VS
$10 FREE BTC
Fees
VS
User Experience/Ease of use
VS
Coins listed
VS
Passive income options
VS

CakeDefi “Learn and Earn”

A feature of Cakedefi is its Learn and Earn feature. Similarly, to Coinbase’s feature with the same name, CakeDefi’s version of Learn and Earn enables user to get free crypto every few weeks by watching a few short (<1min) videos and answers a multi-choice question you are awarded with free crypto. As of January 2022 you can ear $5 free DFI and will soon be able to earn free Bitcoin and Ethereum.

Once you have all your free crypto rewards plus the sign up bonus, the next step is up to you.

  • Keep you various cryptos in the hope they increase in value
  • Convert all you cryptos into a more stable crypto Bitcoin/Ethereum
  • Sell them for USD! Once you’ve sold it for USD, you can then link your bank account to Cakedefi and directly transfer it to your account.

Final Verdict

CakeDefi is a great option for those looking to earn a passive income from their crypto by utilising the staking/freezing feature. Using our exclusive sign up link you can get a head start with $30 free crypto plus with the option of “learn and earn” you can get extra crypto FREE. If you are asking yourself: Is CakeDefi good for beginners? The answer is MAYBE. It has a great engaging UI but has some features that may confuse those early into their crypto experience. For those willing to give it try can potentially earn lots of passive income on their crypto!

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