Hi everyone! Today I'd like to talk to you about Zapper, a tool for managing your DeFi investments.
DeFi investments have a lot of complexities and nuances to them, so they require a special tool to monitor.
Getting Started
Connecting a Wallet
First, you can connect a wallet to Zapper using any of the following options:
The process for connecting a wallet is safe and easy! As long as you're signed in to your wallet, things will connect seamlessly.
Connecting an ETH Address or ENS
The other easy way to get to your dashboard is to type in an Ethereum account address or name. In this example, we'll be using this method. I've looked up Vitalik Buterin's address (for those who aren't familiar, Vitalik is one of the creators of Ethereum itself).
Remember, because all transactions on Ethereum are public, we can look up anyone's address on Zapper (or any other site, like Etherscan)!
The Dashboard
Here's Vitalik's dashboard as of September 20, 2021:
Quick tip: in the top right, you'll see a little icon with a gas sign. This is the current gas price on Ethereum (or how much it's going to cost you to make a transaction).
Wallet
Right away, you can see a sum of his portfolio value - right now, it's at $26.7 million! Most of that value is coming from the "Wallet" section, so let's dig into that section first. Clicking on the Wallet section will bring up a list of Vitalik's ERC-20 tokens:
As you can see, the vast majority of the value of Vitalik's wallet is coming from his ETH holding. At the moment, he holds 7,606 ETH (worth over $22.5 million!).
Interestingly, many of the other assets in his account are what I'd call “scam tokens” that will ultimately end up worthless. Why does he hold these tokens? Because Vitalik is a very public figure within the crypto community, some project leaders will airdop their tokens to him without his approval. They know that people like me and you look at Vitalik's address from time to time; if we see that their token is in his wallet, perhaps we'll want to buy it too, driving up the price.
Recently, one project called SHIB sent Vitalik ~460 trillion SHIB tokens (worth over $6 BILLION). SHIB's founders viewed it as a publicity stunt, thinking that they could promote the token by piggybacking off Vitalik's reputation within the crypto community. Unfortunately for them, Vitalik called their bluff and burned 90% of the tokens (causing them to be lost forever) and donating another 10% to an India COVID relief fund.
Anyway, Vitalik does hold some legitimate tokens as well. He holds 2501 DAI, which is a well-respected stablecoin.
Your portfolio probably won't look as crazy as Vitalik's, but you can see how Zapper can give you a lot of valuable data on your portfolio: token balances, token prices, and the total value you hold by each token.
Liquidity Pools
Vitalik also has some Uniswap v3 Liquidity Pool holdings worth just under $1,000. Drilling in, we can see the value of each of these line items.
To be a liquidity provider, one must deposit tokens in a pool. Unfortunately, these deposits won't show up on simple price trackers. This is where Zapper comes in. Because Zapper is DeFi-native and focused, it's built out all the complex logic needed to show and value each of these pools. A more complex user might have tens or hundreds of liquidity pools, all of which are important to actively monitor.
Yield Farming
Next, let's look at yield farming. Vitalik has 21.6 in claimable POOL tokens. This likely means that the PoolTogether project has given him some rewards for activities he's performed on their protocol. Rather than being a simple token which has a trading price, the line item below represents tokens that can be claimed (they aren’t actually in Vitalik’s wallet yet). Again, this kind of data isn't something that would show up on a traditional portfolio tracker, which is why it's important to use a tool that's built for DeFi.
Platforms
Vitalik has all of his assets on Ethereum's main network today. If he had anything on Polygon or another Layer 2 (L2), you might see something like this:
Knowing how much you have on each platform can be useful in helping you diversify your risk. We'll cover L2s in a future edition of Easy DeFi, but for now, all you need to know is that they sit on top of the main Ethereum network and make transactions a lot faster and cheaper.
NFTs
Just below the Ethereum account name, you'll see the NFTs tab. This tab will show all of an account's NFTs. Sadly, I don't own any cool NFTs, but if you did, this is where they'd show up:
History
The history tab is pretty simple. It's similar to what you'll find on Etherscan.io:
Here, you're able to see a list of transactions associated with an account. You'll also see the gas fee that was paid to process the transactions.
Multiple Wallets?
What if you have multiple wallets that you want to track? Simply click on the Address Book tab on the left navbar and you'll be able to create a "Bundle" of addresses that aggregate into one clean dashboard.
Summary
Zapper is a DeFi-native tool that helps you monitor your crypto portfolio. As you grow more sophisticated with your investments, you'll find that Zapper is a perfect tool for keeping tabs on all of your tokens, liquidity pools, and yield farming rewards. Even if you have a simple portfolio, I'd strongly encourage you to plug in your Ethereum address and give it a spin.
Note: hopefully this week’s article helps illustrate why it’s so important to have your own wallet. If you just used Robinhood, you’ll never be able to use Zapper (because Robinhood doesn’t give you access to your address). More importantly, though, you’d never be able to do interesting things like use Polygon’s Layer 2 network or provide liquidity on Uniswap!
P.S. - Zapper has a great "Learn" section of their website that I'd highly recommend you check out!