DeFi Pulse Farmer #26

Catch up on a new week in DeFi as we recap the Farm of the Week, the Conservative Farmer, the Governance Watcher, and more!

Welcome to DeFi Pulse Farmer - your guide to staying up on the latest and best trends in yield farming and beyond.

In this newsletter, we break down top stories, developments, and trends from the past week in tandem with two key farming opportunities to keep an eye on.

If you want to access the full DeFi Pulse Farmer experience to receive emerging Yield Farming opportunities sent to you throughout the week as part of our Alpha Tractor Series, or the DeFi Pulse Farmer Protocol Express, which consists of a weekly recap of APYs and new pools on major protocols and a highlight of an emerging opportunity, subscribe today.

After hitting $25B for the first time last week, the total value locked (TVL) in DeFi climbed in recent days and is currently hovering at a new all-time high of $27.65B. Next stop, $30B!

Indeed, every week now it seems that activity and optimism around the sector swells to new heights. The sustained growth trend seems primed to continue as DeFi cracked into the mainstream limelight this week courtesy of Robinhood’s $GME debacle. 

In short (pun intended), retail investors from Reddit’s r/wallstreetbets forum went into a frenzy buying up GameStop stock this week, which caused hedge funds that were shorting $GME to get seriously squeezed. The ensuing drama saw the popular mainstream trading app Robinhood close and thereafter limit trading around $GME and other stocks (and even crypto at one point!) to deal with the chaos. 

Many took the episode as Robinhood siding with the hedge funds and as an example of how traditional financial powers work in concert against everyday people. Many WSB members have been enraged and looking to opt-out accordingly, which is why many crypto users started to float DeFi to these financial refugees. 

Why? Because DeFi is everything Robinhood isn’t: permissionless, borderless, trustless, 24/7, and no KYC required. Of course, a mass mainstream migration won’t happen in just one week’s time, but the wild developments from the past week suggest DeFi’s time to shine is officially here. 

As for how we’re looking at the protocol level in DeFi, the actual positions of the top projects (by TVL) didn’t change much over the past week, however, we did see Compound flip Uniswap to acutely become the 3rd-largest DeFi project. Decentralized lending is certainly in vogue, as you can see by Maker’s, Aave’s, and Compound’s reigning dominance. 

Lastly, the best-performing DeFi tokens of the week included ALPHA (+165%), DODO (+149%), 1INCH (+139%), UNI (+100%), and AAVE (+68%). The DeFi Pulse Index (DPI) also rose 30% to $314.2 in that span.

Thank you to our sponsors DEXTF, an asset management protocol that makes managing and investing assets easier, and Basis Cash, a decentralized stablecoin with an algorithmic central bank.

Accumulate and bundle yield generating assets with your favorite longs on DEXTF. Provide liquidity on Uniswap, and stake your tokens to participate in Basis Cash's incentivized program.

Harvest 10% to 670% Yields Via Harvest Finance’s Seigniorage Farms

At this point, we’re all likely aware of Harvest Finance. It’s a yield aggregator protocol that wants to give DeFi depositors a variety of ways to get attractive returns. 

We here at DeFi Pulse Farmer love yield aggregator protocols, so it’s no surprise we’re interested in Harvest in general. But where things take a turn for the even more intriguing lately is seignorage-based algorithmic coins, which are in vogue and which Harvest has released a suite of new farms to accommodate. 

In the context of crypto, seignorage denotes projects that use a system in which protocols earn revenue via routine monetization of debt, i.e. algorithmic stablecoins.

This week, then, we’re looking at Harvest’s seigniorage farms. It’s no secret that a lot of algorithmic projects have seen their prices crashing lately, of course. But at the same time, and while we’re in the midst of a wider crypto bull market, there seem to be pretty good chances that the last word isn’t in on these seigniorage projects. 

That said, the risk of impermanent loss (IL) for algorithmic stablecoin liquidity providers may be pronounced for now, but that doesn’t mean this same dynamic will always be the case. And if you can stomach this risk, there are some pretty interesting farms on Harvest right now accordingly …

As such, there are 6 seigniorage-based yield farms to consider on Harvest right now.

The lowest-yielding pair is the Uniswap DAI/BSG pair, which is netting just below 10% in yearly returns presently. On the flip side, the best-performing Harvest seigniorage pool at the moment is the DAI/BSGS pair, which is fetching 670% APY currently. 

To start, you’ll have to pick which trading pool appeals to you most. The available options are DAI/BAC, DAI/BAS, USDT/MIC, USDT/MIS, DAI/BSG, and DAI/BSGS. Then you’ll follow these steps: 

  1. Visit the Uniswap or Sushiswap dashboard and deposit liquidity for your chosen pair. 

  2. Take your ensuing LP tokens and navigate down to the “Seigniorage” section of the protocol’s homepage

  3. Click on the Seigniorage tab to open up a scroll down menu. Pick the pool of your choice and then input the amount you’d like to deposit. Click on “Deposit and Stake.” 

  4. Confirm the consequent deposit transaction, and you’ll be harvesting through Harvest!

Algorithmic stablecoins have proven extremely volatile lately, and in many cases holders have lost money. These farms additionally face smart contract risks that can’t be ignored. Make sure you do your own research and never invest more than you can afford to lose. 

  • Thoughts on Liquidity Mining
    TLDR: Yield farmer OverAnalyser catalogues all the various liquidity mining (LM) strategies we’ve seen in DeFi to date, including token distributions, market liquidity, and more.  

  • Introducing Ruler Protocol
    TLDR: DeFi lending project Ruler Protocol introduces itself this week as a novel lending protocol with no liquidations. 

  • The Countdown to Alpha Homora V2!
    TLDR: Leveraged yield farming project Alpha Homora is getting ready to roll out its optimized V2 system.  

  • Opium Governance
    TLDR: Synthetic derivatives protocol Opium unveils the $OPIUM governance token. 

  • Hop Protocol Says Hello, World!
    TLDR: Layer-two scaling solutions being siloed from each other is a real concern. The good news? Projects like the new Hop Protocol are stepping forward to make liquidity and activity among L2 protocols an easier reality. 

  • Let’s Talk $GME Shorts vs. DeFi
    TLDR: Famous biz wiz Mark Cuban (and newfound DeFi user) lays out why DeFi offers unprecedented benefits in light of this week’s $GME fiasco.

Farm +35% APY with Curve’s stETH pool

It’s no secret that we love ETH farms. And one that’s caught our attention this week is Curve’s new ETH/stETH pool. 

What’s stETH? It’s staked ETH in Eth2 as tokenized by Lido, an Ethereum liquid staking protocol. With Lido, you can deposit less than the typical minimum 32 ETH threshold for staking, which has led to stETH becoming quite popular in the earliest days of Eth2 staking.

All that said, not only can you reap validator rewards from your stETH going forward, but now you can also put your stETH to work in DeFi to earn extra yield through Curve’s new ETH/stETH pool!

That’s because this pool is quite an interesting yield farm right now. Not only is it earning trading fees through Curve, but it’s also earning over 35% in Lido’s LDO rewards and also an additional 8% in CRV rewards. Not bad!

Also, Curve’s smart contracts are battle-tested at this point, so it’s certainly not a high-risk DeFi opportunity relatively speaking. 

If you’re interested in joining, you’ll first want to make sure you have some ETH and stETH so you can provide liquidity. Then head over to Curve’s ETH/stETH deposit dashboard and make your deposits. Remember to stake deposit your ensuing LP tokens in Curve’s gauge to trigger CRV rewards.

There are no free lunches in DeFi. Even relatively safe farms like this one have risks to consider. Be smart, do your own research, and farm safely!

This week’s Plow of the Week goes to Rotki! Rotki automatically pulls farmers’ data from exchanges without manual input required and provides a dashboard with an overview on key metrics such as the history of trades, airdrops received, and more.

We’ve got mainstream tycoons like Marc Cuban starting to explain DeFi to the masses and new r/wallstreetbets oncomers. These are reminders that we’re still very early and that the revolution that is decentralized finance is just starting to rev up. But believe this: the revolution has begun, and we’re seeing the dominoes drop every day now. 

All info in this newsletter is purely educational and should only be used to inform your own research. We're not offering investment advice, endorsement of any project or approach, or promise of any outcome. This is prepared using public information and couldn't possibly account for anyone's specific goals or financial situation. Be careful and keep up the honest work!