DeFi Pulse Farmer #27
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.
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Pinch yourself, the DeFi dream is coming true! The total value locked (TVL) in the ecosystem went parabolic this week, climbing some $7B from $27.65B to $35B in recent days!
Previously in this column, we predicted we’d see a $100B TVL for DeFi by the end of 2021. But that prediction came at the start of the year, and growth has picked up considerably since then. At the rate things are going lately, it’s possible that we’ll hit a $100B TVL in the spring or the summer!
And it’s not just that usage of these decentralized protocols is blooming. It’s also the growing reality that DeFi tokens are simply much more useful and tied to much more organic activity than the cryptoeconomy’s reigning non-DeFi “ghost chain” assets, like Cardano, EOS, and beyond.
That’s why it was so interesting this week to watch the tokens of DeFi blue-chip projects like Uniswap and Aave finally launch toward breaching the top 10 cryptocurrencies per market capitalization (AAVE is 14th largest now, UNI the 15th largest).
Expect much more of this to come in the months ahead, to the point that a majority of the top 10 cryptos will likely be DeFi tokens by year’s end. And that shift could happen sooner rather than later, courtesy of DeFi and its narratives really starting to win out. We’re in the 4th massive crypto bull run now, and DeFi’s a non-trivial contributing factor to that, to say the least!
As you can imagine, then, we saw some big moves among top DeFi tokens recently. Some of the best-performing assets on the week included UMA (+170%), AKRO (+125%), CREAM (+60%), and COMP (+60%). The DeFi Pulse (DPI) also rose +40% in that span to hit $405.
Farm Up to 985% with DeFi Insurance Play Armor
It’s becoming clearer and clearer that DeFi is going to get much bigger going forward. And as that happens, we’re going to see DeFi insurance solutions become much more important for healthy and sustained ecosystem growth.
For this reason, DeFi’s nascent insurance arena is really key to watch right now, and one of the newest upstarts of note in this sector is Armor.
Why’s Armor interesting? A DeFi smart insurance aggregator, Armor lets users enjoy “Pay as You Go” coverage, which bills by the second across protocols and only for as long as is needed. Accordingly, Armor offers lots of flexibility while also not requiring any KYC, unlike peer DeFi insurance project Nexus Mutual for example.
So Armor is new and promising, those boxes are checked. But how are its yield farms and their harvests looking right now?
Pretty damn good and varied, actually. Zooming in, Armor has three different types of farms you can choose from, and each have their own unique risk/reward profiles. There’s something for any farmer, then. These three pastures are:
The arNFT staking pool (960% APY currently).
Armor’s incentivized liquidity pools (up to 391% APY currently).
The arNXM Vault (52% APY currently).
Here, then, we’ll just go down the line and briefly explain how these farms work and how to jump in.
Armor’s arNFTs are optimized and wrapped versions of Nexus Mutual coverage. The arNFT staking pool farm lets you stake arNFTs, i.e. selling coverage and earning yield via Armor’s Smart Cover System and Shield Vaults.
If you’re interested in joining the arNFT staking pool farm, you’ll first head over to Armor’s “Buy arNFT” dashboard. Select the coverage you want, get a quote, and then confirm. Take your ensuing arNFTs to the “Stake arNFT” dashboard and stake them through the interface as you please! The staking APY is around 960% presently, so it’s the juiciest of the options at the moment.
Armor’s Incentivized Liquidity Pools
The young Armor project is trying to bootstrap liquidity around its $ARMOR governance token, and to do that Armor is currently offering some pretty tasty liquidity mining rewards around major $ARMOR pairs (e.g. ARMOR/ETH, ARMOR/DAI, ARMOR/WBTC) on Uniswap, Sushiswap, 1inch, and Balancer.
Thankfully, Armor’s “Liquidity Mining” dashboard makes it easy to add liquidity, stake your LP tokens, claim your $ARMOR rewards, etc. Start out by picking up liquidity for your pair of choice, and then head over to the aforementioned dashboard. Once you’ve got your LP tokens in hand, you’ll need to stake them through the same interface in order to start racking up those ~400% APY token rewards!
The arNXM Vault
With 52% yearly returns right now, the arNXM Vault isn’t necessarily eye-popping compared to Armor’s other reigning farms. It’s still worth considering, though, because it might be better suited to your personal needs or appetite!
So first off, arNXM is Armor’s version of wNXM. It’s the yield-bearing token provided by the arNXM Vault that generates staking rewards and eschews Nexus Mutual’s staking lockup period. To join this farm, you simply deposit wNXM tokens through the arNXM Vault interface. Your arNXM will automatically accrue interest after that!
Armor is one of the cooler smaller projects we’ve seen lately. But you’d do well to never throw caution to the wind in DeFi, no matter how good of an “aping” opportunity you might find. The good news here is that there are three different types of farms that you can choose from. Just be sure to do your own research, too, and never invest more than you can afford to lose. You want to be farming for the long run after all, right? Then farm smartly, especially when you’re just starting out.
Farmers can enhance this week’s farms with our sponsor Alpha Finance. Its recently launched Alpha Homora V2 allows farmers to do leveraged yield farming on pools that are on Curve, Balancer, SushiSwap, and Uniswap. Farmers can also lend assets such as ETH, DAI, USDT & USDC.
In Alpha Homora V2 farmers can open up to 9x leveraged yield farming positions for selected pools and, similar as in Alpha Homora V1, farmers don’t need to have equal value of both tokens to yield farm. Head over to Alpha Homora V2 and start farming or lending today!
Re: Intro Level Resources for Ethereum, Crypto
TLDR: With a crypto bull market raging once again, lots of newcomers are piling in and wanting to learn more. Respected Ethereum community member DCinvestor has put out a call for resources worth sharing.
THORChain’s Next 3 Incentivized Pools
TLDR: Interoperability project THORChain is incentivizing three new Sushiswap pools with RUNE rewards, with the assets at the center of these pools being $ALPHA, $CREAM, $PERP.
Vesper Announces $2.5 Million Strategic Partner Round
TLDR: Vesper Finance, which is focused on building easy-to-use DeFi products, just raised $2.5 million in strategic funding.
Opyn closes $6.7mm funding round led by Paradigm
TLDR: Rising DeFi options protocol Opyn has raised a new $6.7M warchest through investors like Paradigm, Dragonfly Capital, and Kain Warwick.
Introducing Balancer V2
TLDR: Popular DeFi AMM project Balancer has unveiled its V2 system, which features optimizations around things like security and gas efficiency.
TLDR: Crypto investment firm Grayscale published an extensive report detailing the various value propositions tied to ether (ETH).
Vulnerability Disclosure 2021-02-04
TLDR: After its V1 Dai Vault was hacked, yield aggregator project Yearn promptly published this report outlining exactly how the attack took place.
Farm ~54% APR via BarnBridge’s #hodl Pool
BarnBridge is a tokenized risk protocol that lets DeFi users make hedges against DeFi fluctuations (e.g. prices, yields) through customized derivatives.
Pretty neat, right? Well, the project’s still quite young so it’s still in its bootstrapping phase. This brings us to BarnBridge’s “Pool 3,” the #hold Pool, which is soon to be replaced by DAO staking.
Launched last fall, Pool 3 originally came in response to whales dominating the project’s LP token-focused Pool 1 and Pool 2. How? By giving all BarnBridge users an easier way to earn the project’s BOND token through a simple BOND staking farm. Yet Pool 3 is concluding, so BOND holders will have to migrate to DAO staking, as rewards will start flowing there at UTC 00:00 February 8th at the same time that Pool 3 officially ends.
Here, you’ll have to unstake your BOND from Pool 3 first to re-stake through the DAO UI, so keep that in mind. Then deposit and lock BOND to get vBOND for rewards but also to participate in BarnBridge governance! Now you’ll be farming some solid returns without having to worry about any impermanent loss (IL).
BarnBridge hasn’t had any major security incidents so far, and the BOND farm looks pretty safe as far as DeFi goes. But be sure to farm responsibly if you do join in!
This week’s Plow of the Week goes to revert_! A tool that allows liquidity providers to connect their wallets and access different stats regarding their Uniswap positions.
Reminder, everyone: we’re in the midst of the 4th great crypto bull run. This means it’s important to take profits at some point; otherwise, you’re just pushing numbers around on a screen!
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!