How to get started with DeFi: testnet first, then small amounts

A hundred dollars buys about 0.044 ETH on the morning of 2 November 2026, with ether near 2,291 dollars at 09:52 UTC according to DefiLlama. Spent on a blockchain, where users swap tokens directly from their own wallets without handing custody of their funds to a company.">swap on Base, a small part of that money goes to gas: a typical contract call cost about 0.2 cents that morning. On Ethereum itself it cost about 4 cents. For years the standard advice on how to get started with DeFi was that gas would eat a small balance. It no longer does.

What eats 100 dollars now is two things. smart contract holding reserves of two or more tokens, supplied by users, that a decentralized exchange uses to execute trades automatically at a price set by a formula.">Pool fees: a 0.3% pool takes 30 cents on 100 dollars, well over a hundred times the gas on Base. And mistakes: a fake token, a wrong network or a bad signature can take all of it in one click, while a year of lending that same sum at the Aave rates shown below would pay between about 2.70 and 5.40 dollars.

So this course treats 100 dollars as tuition. It has eight steps, from a fresh address to revoked approvals, and each one gives the actions in words, the expected cost, the check at the end, the risk and the lesson that explains the mechanics. The order is built to make errors cheap: a testnet where one exists, then very small real amounts, one type of protocol at a time.

How to get started with DeFi on 100 dollars: the honest budget

Start from the arithmetic. On 2 November 2026, DefiLlama showed Aave V3 paying a base 2.74% on USDC on Arbitrum and 5.36% on one small USDC pool on Base (15.6 million dollars deposited, so a rate that can move quickly). That is 2.74 to 5.36 dollars a year on 100 dollars. A single mistake costs more than that. Spend the first money on learning how the machine behaves, and expect to lose some of it or all of it. Use only money you can afford to lose. Nothing here is investment advice, and no rate in this lesson is a target.

This course assumes you went through the DeFi prerequisites checklist: a wallet you understand, a seed phrase stored offline, a way to buy crypto. If you came from the case study of a USDC payment, you have seen one transfer from end to end. Here you do the rest with your own hands.

The table sums up the course. The sizes are examples for practice, not an allocation, and the same money comes back between steps if you close each position. The gas figures are estimates built from the measurements in the next section, on the prices of 2 November 2026.

Step	Testnet available?	Example size	Estimated gas on Base	The cost that matters more
0. Fresh address	Not needed	Nothing yet	None	Losing the seed phrase
1. Testnet rehearsal	Yes, it is the step	No real money, apart from a possible faucet balance	None in real money	Time, and fake faucets
2. Swap	Contracts on Sepolia	15 dollars	About 0.5 cents (2 transactions)	0.75 to 4.5 cents of pool fee, plus price impact
3. Liquidity	Contracts on Sepolia	20 dollars	About 1 cent (3 to 4 transactions)	Impermanent loss
4. Lend and borrow	Yes, Aave on Sepolia	20 dollars supplied, 5 borrowed	About 1.3 cents (6 transactions)	Liquidation
5. Liquid staking	Yes, on Hoodi only	15 dollars	About 0.5 cents by swap on Base	Pool fee, discount to ETH
6. Perp (optional)	Yes, but only after a mainnet deposit	5 USDC minimum deposit, about 12 USDC for a 10-dollar order at 1x	About 0.5 to 1 cent on Arbitrum for the deposit	Liquidation, funding, trading fees
7. Pendle (optional)	Check Pendle’s docs; plan on a tiny real amount	10 dollars	About 1 cent on Arbitrum	Exit price before maturity
8. Revoke	Practise on Sepolia	Nothing	About 0.2 cents per approval	Fake revoke sites

Step 0: open a fresh address for the experiment

Everything in this course happens on an address that holds nothing else. If a contract you approve turns out to be malicious, the damage stops at the balance of that address.

1. In your wallet, create a new account (our wallet guide covers the types). A browser wallet such as MetaMask or Phantom is a hot wallet, which suits practice sums and nothing larger.
2. If you would rather isolate it fully, create a new wallet with its own new seed phrase, and write that phrase on paper, as our seed phrase guide explains. Never import the seed of your main wallet into a browser you use for experiments.
3. Label the account clearly, for example “practice”, so you never sign from the wrong one.
4. Start a log: a spreadsheet with date, network, action, amount, fee and transaction hash. Fill it from the first transaction. Step 8 and your tax return both depend on it, and our guide to tracking a DeFi portfolio shows a fuller version.

This step costs nothing. To check it, copy the new address and paste it in an explorer: it should show no history at all. The risk here is the seed phrase. No site, support agent or tool ever needs it. If anything asks for it, stop.

Step 1: rehearse on a testnet, and know what it cannot teach

A testnet is a copy of a blockchain whose coins have no value. ethereum.org calls Sepolia “the recommended default testnet for application development”, on a page updated on 23 September 2026. Ethereum’s other public testnet, Hoodi, is meant for validators and staking, and Holesky has been deprecated since September 2025.

Getting Sepolia ETH: the faucet catch

Add Sepolia to your wallet, or switch on the display of test networks, then ask a faucet for test ETH. Here is the catch that most tutorials skip: the free faucets usually want proof that you are a real user, and the proof is a little real money on the same address.

• Alchemy offers 0.1 Sepolia ETH every 24 hours, but asks for at least 0.001 ETH on Ethereum mainnet, about 2.30 dollars on 2 November 2026, and enough past activity on mainnet.
• QuickNode allows one claim every 12 hours per network with no account, a bot check and a small mainnet ETH balance. Posting on X doubles the amount, and it is optional.
• The proof-of-work faucet listed by ethereum.org asks you to do mining work for your coins instead, and its page mentions no balance condition. It costs time and computing power.

The conditions change often, so read them on the day. A brand-new address with no history may be refused by the faucets that check activity, which sits badly with Step 0. You have two honest ways out: use the proof-of-work faucet, or fund the practice address with a tiny real amount first and accept that it is no longer spotless. Never buy Sepolia ETH. It has no value, and sellers are running a scam.

Which protocols you can rehearse

Protocol	Testnet status as read on 2 November 2026	What it means for you
Aave V3	Sepolia pool answers on-chain with 9 reserves; deployments listed in the Aave address book	The best rehearsal of the course. The app has a testnet mode in its settings; check the market selector for the current list
Uniswap v4	Contracts on Sepolia, Base Sepolia, Arbitrum Sepolia, per Uniswap’s deployment list	Pools are thin and tokens are test tokens. You learn the clicks, never the price. If the web app shows no usable pool on Sepolia, skip this rehearsal and go on to Aave
Lido	Hoodi only: its docs say “Sepolia is deprecated and no longer used for Lido token testing”	Needs Hoodi ETH from a separate faucet. Most readers can go straight to Step 5 with a small real amount
Hyperliquid	Testnet faucet gives 1,000 mock USDC, but “you need to have deposited on mainnet with the same address”	A real deposit comes first, so the rehearsal follows the risk rather than preceding it
Pendle	Look in Pendle’s documentation for a current testnet before counting on one	Plan for no rehearsal: the step goes to a very small real amount, or you skip it

A testnet teaches the sequence of screens: connecting, choosing a network, approving, signing, reading a transaction on an explorer. On Sepolia, open your first transaction in the explorer and find what it left behind: an approval, a transfer, an event. Step 8 will come back to those approvals, and our DeFi security routine explains how to read a signature request before you sign.

It hides almost everything that hurts. Prices on testnets mean nothing, pools have no depth, and nobody bothers to front-run you. Fake test tokens and fake faucet sites do exist, though, and a connected wallet signs just the same way on them. Check the URL on every faucet, and use only the practice address. The check for this step is simple: you can say, for each signature you made, what it allowed.

What a DeFi transaction costs in November 2026

Gas is the number of computing units a transaction uses multiplied by the price per unit, base fee plus priority fee, as ethereum.org explains. A plain ETH transfer uses 21,000 units; our glossary entry on gas fees has the vocabulary. A swap uses far more, and on a layer 2 the receipt also carries a fee for posting data to Ethereum. For the Coindaro course we read public nodes on the morning of 2 November 2026 and sampled recent contract calls, of all kinds, swaps among them.

Network	Gas price, 2 Nov 2026, about 09:50 UTC	Median fee per contract call	One call in ten cost at least	Sample
Ethereum	0.061 gwei	3.8 cents	34 cents	24 calls
Base	0.006 gwei	0.22 cents	1.05 cents	24 calls
Arbitrum One	0.02 gwei	0.53 cents	Sample too small	4 calls, weak
OP Mainnet	0.001 gwei (read about 09:44 UTC)	0.03 cents	Not used in this course	23 calls

Treat these as estimates on the day from a small sample. A swap of 180,000 gas units at 0.061 gwei works out at about 2.5 cents on Ethereum, using ether at 2,291 dollars. Gas is volatile, and the samples mix light and heavy calls, so the spread in the table is wide. Budget ten times these figures for a busy hour and you will not be caught out.

If Ethereum is this cheap, why use a layer 2 at all? For two smaller reasons than the old one. A mistake or a repeated attempt costs almost nothing there, which is what a beginner needs, and several of the tools here are at home on one. DefiLlama counted 5.99 billion dollars locked on Base and 1.43 billion on Arbitrum on 2 November 2026, against 44.36 billion on Ethereum, so Ethereum keeps the deepest markets. A layer 2 is cheaper. It carries the same smart contract risk, plus the risks of its own that our layer 1 versus layer 2 guide sets out.

Getting funds there is the first real choice. The plainest route avoids a bridge: buy ETH or USDC on an exchange and withdraw directly to Base or Arbitrum, if your exchange offers that network, with the network selected by hand. Send a test amount of a few dollars first. Keep a small amount of ETH on the layer 2 at all times, because gas is paid in ETH there and a wallet with USDC and no ETH can do nothing. The exchange’s withdrawal fee may well be your largest single cost of the whole course, so read it before confirming.

Step 2: make one small swap on a DEX

The mechanics and the safety checklist live in our guide to using a DEX safely. This is the practice.

1. Open the DEX from a bookmark or from its official documentation, never from a search ad, and connect the practice address on Base.
2. Choose to swap about 15 dollars of USDC into ETH, or the reverse. Select tokens from the app’s list, and compare the contract address with the one on the issuer’s site.
3. Read the quote before signing: amount received, minimum received, price impact, fee tier of the pool.
4. Approve the token if asked, read the amount in the wallet’s approval window, and set a limited amount if the wallet lets you.
5. Sign the swap, then open the transaction in the Base explorer.

Expect about 0.5 cents of gas for the two transactions on 2 November 2026 figures. The pool fee is larger: 0.75 cents on 15 dollars in a 0.05% pool, 4.5 cents in a 0.3% pool. That gap is the reason to read the fee tier. Depending on the app, the route may also carry an interface fee, shown on the quote.

You are done when the amount that reached your wallet matches the quote within your slippage setting, and your log has the fee and the hash. If you see a token with the right name and the wrong contract address, you have just met the most common trap on these networks. The other risks here are the wrong network and a slippage setting left too wide, which hands value to bots.

Step 3: provide a tiny amount of liquidity, then take it back

Read how to provide liquidity first for ranges and how fees accrue, and our lesson on impermanent loss for what the position can cost you. The goal of this step is narrow. You are checking that you can enter a position and, above all, leave it.

1. Pick a pool of two assets you already hold, for example WETH-USDC on Base, with about 20 dollars in total.
2. Choose a wide price range. A narrow one earns more while the price stays inside and nothing once it leaves.
3. Approve both tokens and add the position. It appears in the app, and as a token in your wallet.
4. Come back a few days later, read the fees earned and the amounts of each token, then remove all of it.

Gas should be about 1 cent for three or four transactions at the morning’s prices. Now compare it with the income. On 2 November 2026, DefiLlama showed the Uniswap v3 WETH-USDC pool on Base at 29.2% a year in the 0.3% tier (151.7 million dollars) and 15.0% in the 0.05% tier (8 million). Those figures are recent fee income annualised, nothing more. At 29.2%, 20 dollars would gather about 1.6 cents a day if the rate held and your position earned the pool average, and both conditions are generous.

After removal, the wallet should hold both tokens again, with the position gone, and you can compute what you would have had by simply holding. The gap between the two, before fees, is your impermanent loss. If the price left your range, you ended up holding mostly one asset. That result is normal, and it is the lesson of this step. Smart contract risk applies to every dollar in the pool.

Step 4: lend, then borrow a little, on Aave V3

Rehearse this one on the Sepolia market first, since it is the best testnet of the course. Put the wallet on Sepolia, switch on testnet mode in the app’s settings menu, take test tokens from the faucet the app offers, and run the whole loop below. Aave’s help pages describe that menu, and it can move, so go by what the app shows. Then do it on Aave V3 on Base or Arbitrum. Aave V4 went live on Ethereum on 30 March 2026, according to The Block, but DefiLlama counted about 0.73 billion dollars there against 15.4 billion on V3 on 2 November 2026, so V3 remains the market most users meet.

1. Supply about 20 dollars of an asset you hold. Approve it, then confirm the supply. You receive an interest-bearing aToken.
2. Note what the screen shows: supply rate, collateral switch, and the health factor once you have a debt.
3. Borrow about 5 dollars of a different asset. Watch the health factor update before you sign.
4. Wait a day. Look at the debt, which has grown by a tiny amount.
5. Repay in full, which takes slightly more of that asset than you borrowed because of the interest, then withdraw everything.

Our lending and borrowing lesson covers the mechanics, and our guide to the health factor and the liquidation price explains the number you are watching. For this exercise, keep it above 2. That floor is a margin chosen for practice and carries no promise, because volatile collateral can fall fast and a position below 1 gets liquidated.

Six transactions at the median Base fee come to about 1.3 cents. On 20 dollars at Arbitrum’s 2.74%, that equals about nine days of interest. Rates move, and the 2 November 2026 figures also show why a rate needs reading on the pool itself: WETH paid a base 1.43% on Base and 0.98% on Arbitrum.

The check: your wallet shows no aToken and no debt token, and the dashboard reads zero. A dust amount of debt is the usual snag, so choose the option to repay the full balance. The risks are liquidation, a wrong oracle price and bad debt in the market. On this size they cost you dollars, and the habit you build is the point: reading the health factor before each signature.

Step 5: try liquid staking with a small amount

The mechanics are in our guide to liquid staking tokens. There are two practical routes, and they are not the same thing.

• On Ethereum, staking through Lido’s app turns ETH into stETH in one contract call. Estimate 4 cents on the morning’s median, up to about 34 cents.
• On a layer 2, you buy wstETH with a swap. On Base that costs about 0.5 cents of gas plus the pool fee, and you are buying from a pool, so the price can differ from the underlying value.

The difference shows up on the balance. Lido’s docs say stETH rebases, normally daily, so your balance changes, and a rebase can be negative. wstETH keeps a fixed balance and its value changes against stETH instead. The same docs add that on most networks bridged wstETH cannot be unwrapped locally, so the layer 2 token leaves through a swap or a bridge. That is worth knowing before you hold it, however small the sum.

On 2 November 2026, DefiLlama showed stETH at 2.34% a year, with 22.27 billion dollars in the pool. On 15 dollars, that comes to about 35 cents a year. The check for stETH: come back after a few days and see the balance change without any transaction, normally upward. For wstETH: the balance has not moved, and its rate against ETH in the app has. Then exit. The risks are a smart contract failure, a discount to ETH in a stressed market, and a wait in the withdrawal queue if you redeem at Lido rather than sell. A staking rate is not guaranteed, and it can fall.

Step 6, optional and leveraged: open one perp position

You can stop before this step and lose nothing that matters. A perpetual is a leveraged derivative, and low leverage is no safety: even at 1x you hold a market position, funding can run against you, and at 3x a fall of about a third can wipe out the margin, liquidation usually arriving before that. The same goes for a rise on a short. You can lose everything you put in as margin, and it can happen in minutes. Our lesson on on-chain perpetuals and our lesson on liquidations explain why.

Start with the rules, since they differ by country. Hyperliquid’s terms of use, last updated on 15 June 2026 and read again on 2 November 2026, close the interface to people and companies residing, located or incorporated in the United States or Ontario, and to sanctioned territories. In the UK, the FCA banned firms acting in or from the UK from selling, marketing or distributing crypto derivatives to retail consumers, from 6 January 2021. That rule targets firms. Whether a UK resident may use a foreign on-chain venue is a separate legal question, so take advice before assuming either answer. In France, the AMF said on 22 February 2018 that platforms offering cash-settled crypto derivatives must follow authorisation rules and fall under the ban on electronic advertising. Read the terms of any venue, and check the law where you live. The same terms forbid using a VPN to hide your location, and they leave it to you to check that your use is lawful.

If you may lawfully proceed and still want to try, the sequence is short, and our Hyperliquid lesson gives the detail. This is a description, not a suggestion to do it.

1. Hold USDC on Arbitrum and a little ETH for gas, as Hyperliquid’s onboarding page describes.
2. Deposit at least 5 USDC. The docs warn that a smaller deposit “will not be credited and be lost forever”. The 5 USDC opens the account, but it will not place a trade at 1x: Chainstack’s documentation gives a minimum order value of 10 dollars, so about 12 USDC covers one small order, its fees and the way out.
3. Claim the test USDC on the testnet with the same address, and rehearse the order screen there.
4. Back on mainnet, choose isolated margin and the lowest leverage, and place the smallest order the screen accepts.
5. Note the liquidation price and the funding rate, then close the position and withdraw.

The deposit costs about 0.5 to 1 cent of gas at the Arbitrum figures above, and trading itself is gas-free according to the docs. Base fees were 0.045% for takers and 0.015% for makers on 2 November 2026, according to Hyperliquid’s fee page, so a round trip of 10 dollars as a taker costs 0.9 cents. Getting out costs more: the API documentation states a 1 dollar withdrawal fee “at the time of this writing”, about a hundred times that trading fee and a twelfth of the deposit. The check: no open position, funds back on Arbitrum, and a log entry for every fill. The testnet faucet also carries a practical note: with an email login, testnet and mainnet addresses differ.

Step 7, optional: buy a small fixed yield on Pendle

Our Pendle lesson explains how a yield-bearing asset splits into a principal token (PT) and a yield token. This step is optional. Unless Pendle’s docs show you a current testnet, it goes straight to a very small real amount, or nowhere. It has no leverage if you only buy PT, but the asset underneath still carries its own risks.

1. Find a market on the app, and read the maturity date first.
2. Compare the implied fixed rate with the asset behind it, and ask what the underlying asset is and why it pays that.
3. Buy about 10 dollars of PT. You pay less than the future redemption value, and the discount is the fixed rate.
4. Decide in advance: hold to maturity and redeem, or sell early on the pool at whatever price it gives.

For a real example from the data, and not a recommendation: on 2 November 2026, DefiLlama showed PT-sUSDai on Arbitrum, maturing on 25 February 2027, at an implied 10.3%, in a pool of 5.3 million dollars. A fixed rate that high, next to Aave’s 2.74% on USDC on the same chain, points to more risk in the underlying asset. On 10 dollars held for just under four months, 10.3% a year is about 32 cents, and that assumes the underlying holds its value.

Gas should be about 1 cent on Arbitrum for approval and purchase, using the weak Arbitrum sample. The check: your wallet shows the PT, and its maturity date is in your log. The risks are a failure of the underlying, a smart contract fault, and a thin pool if you need out early, when a small position can still sell at a poor price. Before connecting, read the terms linked in Pendle’s app and check that your country is not restricted.

Step 8: revoke approvals and close the loop

Every approval from Steps 2 to 7 still exists after you left the position. An allowance is permission for a contract to move a token from your address, and it stays until you remove it. If the contract is later exploited, or if you signed for a fake one, that permission is the way in.

Our DeFi security routine gives the full habit, including transaction simulation. For this course:

1. Open an approvals tool. Revoke.cash covers many EVM networks. Etherscan’s Token Approval Checker lists Ethereum, Sepolia and Hoodi. On Base or Arbitrum, look for the same page on that network’s explorer, or use Revoke.cash.
2. Paste the practice address to read the list. Reading needs only the public address and no connection.
3. Connect the wallet only to revoke, and revoke each allowance you no longer use, starting with any marked unlimited.
4. Confirm every network you used: approvals are separate on Base, Arbitrum and Ethereum.
5. Write the revocations in your log.

Each revocation is a transaction, so about 0.2 cents on Base and a few cents on Ethereum at the morning’s medians. Revoke.cash launched a Premium offer in July 2026, and its About page lists neither the features nor the prices, so see what is charged before paying for anything. No genuine revoke tool ever asks for a seed phrase. Fake ones appear in search ads, so type the address or use a bookmark.

The check: the approvals list shows only what you still use, ideally nothing. Revoking does not undo a theft, and it does not protect funds already moved.

Taxes: each step can be a taxable event

Even a practice swap of 15 dollars may count. The rules below were read on 2 November 2026, and they differ by country. None of these official pages settles every DeFi action, so keep the log and ask an adviser if the sums grow. This is general information, not tax advice.

Country	What the official source says	What stays open
United States	The IRS page, reviewed on 2 September 2026, lists exchanging a digital asset for another as a disposal and staking receipts as income. See our US crypto tax guide	That page does not address LP deposits or wrapping
United Kingdom	HMRC’s manual (updated 28 November 2025) treats exchanging tokens for a liquidity token as a disposal at the sterling value of the token received; a loan is a disposal if beneficial ownership passes. See our UK crypto tax guide	Depends on each protocol’s terms
France	impots.gouv.fr (17 July 2026): flat 31.4% on gains; crypto-for-crypto exchanges without a cash balance are deferred, not exempt. See our French crypto tax guide	The page says nothing on DeFi: treatment is unsettled
Italy	Agenzia delle Entrate: 33% on gains realised from 1 January 2026, no exemption threshold. A swap between assets of equal characteristics and functions is not a taxable event under article 67 of the income tax code, wording carried into article 76 of the new code (Legislative Decree 117/2026). See our Italian crypto tax guide	Whether ETH to USDC or ETH to stETH counts as equal function is a question for an adviser

The practical point for a US reader: at Step 2 you already have a disposal to report, whatever its size. Steps 3, 4 and 5 are where official wording gets thin, and the log gives you dates, amounts and dollar values to work from either way.

A 30-day plan, and when to stop

Nothing here needs doing in one sitting, and a slower pace teaches more because positions have time to change.

• Days 1 to 3: Step 0, the log and the testnet rehearsal, with Aave on Sepolia as the main exercise.
• Days 4 to 7: fund the address on a layer 2 and make the swap.
• Days 8 to 14: enter a small liquidity position, leave it a few days and remove it.
• Days 15 to 21: the lending and borrowing loop on Aave V3, then liquid staking.
• Days 22 to 28: the optional steps, only if you are lawfully able to and still want them.
• Days 29 and 30: revoke everything, reconcile the log with your wallet, and count what the course cost you.

Most readers can stop after Step 5, and many after Step 4. Stopping is a result too: you will know how a swap, a pool, a loan and a liquid staking token behave, and whether a few percent a year justifies the attention.

If something goes wrong, stop signing. Move what is left to a clean address, revoke the approvals from a safe device and write down what you signed. Anyone who contacts you offering to recover the funds is almost certainly the next scam, and nobody legitimate needs your seed phrase to help. The lesson that follows in this path sets out the tools for tracking and checking your positions from here.