I must be missing something here, but if it costs L1 gas fees to put assets into a Defi protocol for borrow/lend, and L1 gas fees to withdraw – how does a retail investor actually make passive income?
Options:
1. Suck them up, you’re in it for long term
2. Use bridge, but this means a L1 fee into bridge initially (I think) even if you get cheaper afterwards. And you got to accept the likely less security of the bridge though (and still L1 fees to wd from bridge)
3. Others?
A related q, if a tradfi lender advertised interest rates that did not account for fees they would be whipped good by regulator, so why dont defi think its appropriate to headline the gas fees that will eat APY?
You don’t have to go through L1 at all nowadays. Many CEXs support direct withdrawals to L2, and many of the big, reputable protocols are on L2.