How to Read a DeFi Portfolio Performance Chart

Detailed Instructions

First, locate the chart type selector, typically found near the top of the dashboard. Common types include line charts for net value over time, area charts for stacked asset allocation, and bar charts for periodic returns. Next, set the timeframe using the dropdown menu, which often offers presets like 1D, 7D, 1M, 1Y, or All. For a comprehensive view of a liquidity provision strategy, you might select '1Y'. This initial step is crucial because a volatile market period like May 2022 will show drastically different patterns than a bull market. Always verify the data source, such as an on-chain indexer like The Graph, which might use a subgraph ID like messari/uniswap-v3-ethereum.

• Sub-step 1: Click the 'Chart Type' dropdown and select 'Line Chart' for total portfolio value.
• Sub-step 2: Use the timeframe selector to choose '90 Days' to analyze a recent quarter.
• Sub-step 3: Check the chart legend to confirm which metrics (e.g., 'Net Profit/Loss', 'Impermanent Loss') are being plotted.

Tip: For yield farming portfolios, comparing a 'Total Value Locked (TVL)' area chart against a 'Net APR' line chart on the same timeframe can reveal efficiency trends.

Detailed Instructions

Focus on the primary value line, which usually represents your portfolio's Total Net Worth in a base currency like USD or ETH. Observe its trajectory: an upward slope indicates growth, while drawdowns signal losses. Then, identify secondary metrics. Annual Percentage Yield (APY) is often plotted as a separate line or shown in a tooltip; a sharp decline could indicate dropping rewards in a farming pool. Look for benchmark comparisons, such as a dotted line for 'ETH Price' or 'S&P 500'. Use the interactive tooltip by hovering over specific dates. For example, hovering over 2023-11-10 might reveal: Portfolio Value: $12,450.75 | APY: 8.7% | Daily Change: +2.1%. Calculate simple returns using the formula in the data table.

codeCopy
// Example calculation for period return
Start_Value = 10000 // USD on Day 1
End_Value = 11200 // USD on Day 30
Period_Return = ((End_Value - Start_Value) / Start_Value) * 100
// Result: 12% return over 30 days

• Sub-step 1: Hover over the portfolio value line's peak and trough to note the maximum drawdown.
• Sub-step 2: Locate the APY/APR metric legend and check if it's current or a 7-day average.
• Sub-step 3: Compare your portfolio's growth slope to any benchmark index line provided.

Tip: A consistently high APY with a flat or declining net worth line may indicate that rewards are being offset by impermanent loss or token depreciation.

Detailed Instructions

If available, switch to an asset allocation view (often a stacked area or pie chart). This shows the percentage breakdown of your holdings, such as 40% wrapped Ethereum (WETH), 35% USDC, 15% Uniswap (UNI) LP tokens, and 10% other governance tokens. Significant shifts in allocation often correlate with your actions (e.g., providing liquidity) or market movements. For on-chain portfolios, you can verify holdings by checking your wallet address on a block explorer. Look for capital flow indicators, like arrows or color gradients, showing deposits into or withdrawals from protocols like Aave or Compound. A sharp increase in stablecoin percentage might indicate a risk-off move. For precise tracking, note the contract addresses of your major holdings.

codeCopy
// Example: Checking WETH balance for a wallet on Ethereum
Contract Address: 0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2
Wallet Address: 0xYourDeFiWalletAddress
// Use an Etherscan API call or `balanceOf` view function.

• Sub-step 1: Identify the top 3 assets by allocation percentage and note their trends over the selected timeframe.
• Sub-step 2: Look for periods where the 'LP Tokens' segment grows, indicating active liquidity provision.
• Sub-step 3: Check for any sudden, unexplained reallocations that might suggest a smart contract interaction or token migration.

Tip: A healthy, diversified portfolio typically avoids having more than 25% in a single volatile asset, unless intentionally taking a concentrated position.

Detailed Instructions

Scrutinize dedicated risk metric panels often located below the main chart. Key indicators include Portfolio Volatility (standard deviation of returns), Maximum Drawdown (largest peak-to-trough decline), and Sharpe Ratio (risk-adjusted return). A Sharpe Ratio below 1 suggests poor risk-adjusted performance. Next, assess protocol-specific health. For lending positions, monitor your Health Factor (e.g., 1.85 on Aave), where a value below 1 risks liquidation. For liquidity pools, track Impermanent Loss (IL) as a percentage; an IL of -5% means your current pooled assets are worth 5% less than if held separately. Verify the smart contract addresses of your active protocols to ensure they are the official, audited versions and not phishing copies.

codeCopy
// Example Health Factor calculation (simplified)
Total Collateral in ETH = 10 ETH
Total Borrowed in ETH = 4 ETH
Liquidation Threshold = 80% (0.8)
Health Factor = (Total Collateral * Threshold) / Total Borrowed
Health Factor = (10 * 0.8) / 4 = 2.0

• Sub-step 1: Locate the 'Risk Metrics' section and record the 30-day volatility and max drawdown values.
• Sub-step 2: For each active protocol (e.g., Compound, Curve), check the 'Health Factor' or 'Collateral Ratio'.
• Sub-step 3: Review any alerts or warnings about upcoming governance proposals or fee changes for your protocols.

Tip: A sudden spike in portfolio volatility coinciding with a market event is normal, but persistently high volatility without commensurate returns may signal an over-concentration in speculative assets.