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Modulis 0 · Crypto basics
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Crypto in a portfolio

Video · 3 min.
Cryptocurrencies in a strategy

Coach Dominic signs five centers and loses 12:58. In crypto it is the same mistake: a coin has a job. Bitcoin is the center that holds value, Ethereum the point guard for DeFi on Ethereum, Solana the fast and cheap forward, and USDC the backup that protects from swings. UST and USDT stay on the bench, and we see which coin works on which network.

Narrated, with light music
The full lesson with numbers and rules is below.
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Our DeFi strategies use three core cryptocurrencies. Each has its own role — like team members, where everyone does their own job. In this lesson you'll learn which currency is used where and why. Once you understand this, you'll be able to evaluate any DeFi position yourself — you'll know what job each asset is doing in it.

SOL — Solana's currency

SOL

Solana is one of the fastest cryptocurrency networks in the world. SOL is this network's "fuel" — without it, you can't carry out any operation.

SOL — like gasoline for a car

Just as a car needs gasoline, the Solana network needs SOL. Every operation (a transfer, a swap, borrowing) costs a tiny slice of SOL. But here's the difference — this "gasoline" costs less than 1 cent.

Key numbers

What mattersSOL
Transaction speedUnder 1 second
Transaction costUnder $0.01
Market positionTop 5 largest cryptocurrencies

Why SOL in our strategy?

SOL is used as collateral — like real estate for a mortgage. You "put down" SOL, and you can borrow money against it.

  1. Deposit SOL into Kamino as collateral
  2. Earn ~4.7% APY (Sept 2026; over the past 90 days it ranged ~4.7–6.3%) — just for holding it
  3. Borrow USDC against this collateral
  4. Put the borrowed money to work elsewhere

That supply APY is not fixed — it depends on how much of the reserve is currently borrowed (utilisation). So before you run any strategy maths, look up the current number in the Kamino interface itself, not in this lesson.

Why not Bitcoin?

Bitcoin is the largest cryptocurrency, but it doesn't fit DeFi strategies:

Solana ecosystem protocols

These protocols run only on the Solana network:

ETH — Ethereum's currency

ETH

Ethereum is the first and largest smart contract network. ETH is this network's currency. It's the second-largest cryptocurrency after Bitcoin.

Ethereum — like the biggest shopping mall

If Solana is a fast, cheap market, Ethereum is the biggest shopping mall in town. It has the most shops (protocols) and the most shoppers (liquidity). But getting in (transactions) costs more.

Key numbers

What mattersETH
Transaction speed~12 seconds (mainnet)
Transaction cost~$0.01–0.30 (mainnet), under $0.05 (Arbitrum)
Market positionTop 2 largest cryptocurrencies
DeFi sizeLargest DeFi ecosystem in the world

Why ETH in our strategy?

ETH is used as alternative collateral on Aave. This lets us avoid depending on a single network:

  1. Deposit ETH into Aave as collateral
  2. Earn ~1.4% APY (Sept 2026) for holding it — noticeably less than SOL on Kamino
  3. Borrow USDC against this collateral
  4. Runs on both Arbitrum and Base — as of 2026, Base has considerably more liquidity
Why does ETH collateral earn less than SOL?

Deposit interest comes from the people borrowing that same asset. In Aave's reserves the supply of ETH is large while the appetite to borrow it is small, so utilisation is low and there is little left over for suppliers. On Solana, demand to borrow SOL is higher, which is why the deposit APY there is higher too.

The practical takeaway: when choosing between SOL and ETH collateral, don't assume the two pay similarly. In September 2026 the gap was more than threefold — and it moves, so check both numbers in the protocols' own interfaces.

L2 networks — Arbitrum and Base

Ethereum mainnet operations cost cents in quiet periods, but the price shifts with network load and can spike many times over during a peak — worth checking etherscan.io/gastracker before a larger operation. Arbitrum and Base are like highways running alongside Ethereum:

The old argument — go to L2 because Ethereum is expensive — is out of date

For a long time people picked L2 networks for exactly one reason: Ethereum mainnet was too expensive. As of September 2026 that no longer holds. Gas has fallen to around 0.05 gwei, and a Uniswap swap on mainnet costs roughly $0.04. The price gap between L1 and L2 has become small.

So an L2 is now chosen not because it is cheap, but because of where the liquidity and the applications are. And that moves: Arbitrum's DeFi TVL fell about 52% during 2026 (to roughly $1.4bn) while Base grew to about $5.6bn. Check current network liquidity on defillama.com before opening a position — the numbers in this lesson will go stale.

Ethereum ecosystem protocols

These protocols run only on Ethereum and its L2 networks (Arbitrum, Base):

Since 2025 there is also Uniswap V4 ETH — the same concentrated-liquidity logic plus an extra layer of "hooks". As of September 2026 it generates roughly twice the LP fees that V3 does ($87m vs $45m over 30 days), even though the largest amount of locked value still sits on V3. In practice that means new positions look at V4 first, while V3 remains the bigger, longer-tested version.

USDC — the stable dollar

USDC (USD Coin) is a stablecoin whose value is kept at $1.00. It's issued by Circle, a US-regulated company.

USDC — like a digital dollar

Imagine you have $100 in the bank. The bank gives you 100 tokens you can use online. Each token is always worth exactly $1. That's USDC — a digital dollar.

How does USDC hold its $1 value?

For every USDC token, there's $1 of real money in Circle's bank accounts:

What mattersUSDC
PriceAlways ~$1.00
Issued byCircle (US-regulated)
What backs its value100% backed by dollars and bonds
Where it runsSolana, Ethereum, Arbitrum, and other networks

USDC's role in the strategy

USDC is the main workhorse of our strategies:

  1. Borrowed from Kamino/Aave against SOL/ETH collateral
  2. ~2/3 of the USDC goes to Orca — providing liquidity (LP — Liquidity Providing) and earning trading fees
  3. ~1/3 of the USDC goes to Deribit — for protection and extra income
  4. The fees earned come back as USDC — and go back to work (compounding — profit on profit)
Why not USDT (Tether)?

USDT (Tether) is the largest stablecoin in the world, but for an EU user the question is no longer really about transparency:

Which currency, used where?

Strategy A — Covered Call + LP

CurrencyWhere it's usedProtocolWhat it's for
SOL or ETHCollateralKamino / AaveSo you can borrow
USDCLP positionOrca / MeteoraEarns fees
USDCOptionsDeribitProtection + income
SOL/ETHOption's underlyingDeribitCovered Call premium

Strategy B — Multi-Layer Yield

CurrencyWhere it's usedProtocolWhat it's for
SOLCollateralKaminoLayer 1 — collateral
USDCLoanKaminoBorrow asset
USDCLP positionOrcaLayer 2 — fees
SOLOptions underlyingDeribitLayer 3 — protection + income

The money's journey — step by step

  1. Start: buying SOL/ETH

    You buy SOL or ETH with euros through an exchange (Nexo/Kraken). This is your starting capital — like a purchase you're about to put to work.

  2. Depositing collateral

    You put SOL/ETH into Kamino or Aave as collateral. From day one you start earning deposit interest — in September 2026 that was ~4.7% for SOL on Kamino and ~1.4% for ETH on Aave. These numbers move daily, so check them in the protocol's interface.

  3. Borrowing

    You borrow a stable dollar (USDC) against your collateral. You borrow conservatively — only 30-42% of the collateral's value.

  4. Splitting the money

    Send ~2/3 of the borrowed money to Orca LP (earns fees). Send ~1/3 to Deribit (protection and extra income).

  5. Reinvesting profit

    Every week: the fees you earned come back as USDC. Part of it is converted back into SOL/ETH and returned to the collateral. That way your position keeps growing (compounding).

Comparing the networks

Solana SOLEthereum ETH
SpeedUnder 1 sec.~12 sec. (mainnet), ~2 sec. (Arbitrum)
CostUnder $0.01~$0.01–0.30 (mainnet), under $0.05 (Arbitrum)
DeFi ecosystemGrowing, innovativeLargest, oldest
LendingKaminoAave
LPOrca, MeteoraUniswap V4 (for new positions), V3 (still the largest TVL)
Stable dollarUSDC (primary), EURC (euro)USDC (primary), EURC (euro)
In our strategyPrimary networkAlternative + diversification
Why use both networks?

It's like not putting all your eggs in one basket. If something went wrong on the Solana network (which happened in 2022, when the network stalled for a few hours), Ethereum positions wouldn't be affected. This is called network diversification — spreading risk across different networks.

Summary

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What role does SOL play in our DeFi strategy?
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Solana address

CUj6wYQLSBxidzm7Lqtkxbw2d8Sv2H2tbJELyAjR756M

Solana network only

Send SOL or SPL tokens (e.g. USDC) only on the Solana network. Sending from an exchange over a different network loses the funds permanently — nobody can recover them.

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