DeFi Pulse Farmer #30
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.
In recent days and for the first time in 2021, we’ve seen something of a pullback in DeFi.
On the week, we saw the ecosystem’s total value locked (TVL) drawdown from a new all-time high of $45B, which was reached last Sunday, to the space’s current TVL of $36.56B. That sum is still really impressive though if you zoom out!
Indeed, if DeFi’s acute TVL slide has you bummed, just remember the TVL’s been climbing basically continuously since DeFi entered the New Year with a TVL of +$15B.
In other words, we were due for some market chop, and these kinds of ebbs and flows are normal for the cryptoeconomy generally speaking. A +$35B TVL is still new and promising territory for the space, don’t forget it!
And regardless of short-term market conditions, DeFi’s top projects still continue to impress and have the same interesting fundamentals as ever.
For instance, Maker’s TVL may have dropped from $7.4B to $5.6B over the last week, yet the lending protocol having $5.6B in assets under management would’ve blown our minds even as recently as late 2020.
That said, you can go down the list of the top DeFi projects and feel the same way: wow, these TVLs and activity would’ve seemed further off just three months ago. Now they’re our reality, even as DeFi markets are experiencing pullbacks lately.
So no, even all the red you’re seeing lately shouldn’t make you automatically bearish and feeling like “the top is in!” Contrary, the idea is to play this as veterans do: keep your head down, keep sticking to your strategies, and trust the process despite all the noise.
If you’re long DeFi, then, this is all business as usual, right?
Speaking of business, we saw some tokens outperform the general DeFi market this week. Some of these DeFi tokens included UNI (+16%), xSUSHI (+11%), and SUSHI (+7%). Moreover, the DeFi Pulse Index (DPI) slid some 26.47% to $378.03 in recent days.
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Farm +123% APY via Sushiswap’s mBTC/ETH pool
We’ve got a really interesting farm on the slate this week that offers liquidity providers rewards in an increasingly blue-chip asset, Sushiswap's SUSHI token. The farm? mStable’s newly launched mBTC/ETH pool on Sushiswap!
So first off, let’s do a quick refresher. mStable is a protocol focused on creating non-custodial stablecoin products, and now non-custodial bitcoin products with the release of its BTC-pegged mBTC token earlier this month. Then there’s Sushiswap, which is going all-in on providing liquidity for both short-tail and long-tail tokens in DeFi.
Zooming in, a critical aspect of the farm at hand is Sushiswap’s ongoing Onsen menu, a rotating program of dozens of incentivized liquidity pools. The rising AMM delivers SUSHI rewards to these pools on the basis of “Allocation Points.” Midcap token pairs ($100M-$25M market caps) receive 100 AP, and thus more SUSHI, while Lowcap token pairs ($25M-$5M) receive 20 AP and so-called Gems ($5M-$1M) receive 10 AP.
As one of the Onsen menu’s new Gem pools, mStable’s incentivized mBTC/ETH Sushiswap pair is receiving +123% APY worth of SUSHI rewards.
Alternatively, mStable itself is also offering +68% APY in MTA for depositors to the same pool, so keep that in mind if you decide you want to stake LP tokens for this opportunity. These rewards might be joined in the future so you can farm SUSHI and MTA simultaneously, too, but that's not live for now.
If this is a farm that suits your taste, you can follow these steps to join:
First off, make sure you have an equivalent 50/50 ratio of mBTC and wrapped Ether, or WETH. You can pick up mBTC on Sushiswap and WETH anywhere where wrapping ETH is possible.
Then navigate to Sushiswap’s mBTC/ETH liquidity page, click on +Liquidity, input your desired deposit amounts, then approve and confirm the deposit transaction.
Now, go to Sushiswap’s Onsen menu dashboard and type in “mBTC” in the search bar so the mBTC/ETH pool comes up. Click on the “Approve staking” button and wait for the transaction to confirm.
Once your approval has gone through, you can select the “Stake” button and deposit your mBTC/ETH SLP tokens to start racking up SUSHI rewards. Nice!
Whenever you want to unstake, you can do so through the same dashboard using the “Unstake” button. Just keep in mind that 2/3rds of your farmed SUSHI rewards get vested for 6 months. Beyond that, you’re golden!
This farm gives you crypto jewels, like SUSHI, and also offers you upside to the ongoing DeFi bullrun. Even still, though, you never want to throw caution to the wind in DeFi. Do your own research, and never ape into any farm with more money than you can afford to lose!
TLDR: Meet Alchemix, a new protocol centered around “synthetic tokens that represent the future yield of a deposit.”
DEXTF Protocol Arrives
TLDR: The new DEXTF protocol is offering fixed-value returns in DeFi, what’s not to love?
Investing in Optimism
TLDR: Ethereum L2 project Optimism raises $25M in a Series A funding round led by prolific crypto VC firm a16z.
Joint Announcement on Funds Repayment
TLDR: Alpha Homora agrees to a repayment scheme that will make CREAM full after a recent exploit affected both protocols.
Aave and Balancer Partner to Build the First Asset Manager for Balancer V2
TLDR: The Aave and Balancer teams join forces to allow “idle assets in V2 pools to earn yield on Aave.”
Layer 2 is live
TLDR: Ethereum decentralized derivatives exchange dYdX is making the move to L2 scaling via StarkWare.
Farm up to 100% APY on your Stablecoins with Yearn Vaults
So DeFi’s drawn back some this week, and many folks have sought refuge in stablecoins. Let’s say you want to keep these stablecoins productive, so where’s a good place to deposit them for yield?
Some of Yearn’s stablecoin vaults are absolute rippers right now.
For example, in the image above you can see the crvDUSD pool is fetching nearly 80% in yearly returns presently, which is amazing for a stablecoin farm. Yet that’s not the only pool of interest here, either. You can also fetch 57% yearly with the crvSUSD pool, 53% yearly with the crvGUSD pool, and so forth.
Not bad, we say! These aren’t the only stablecoin-centric Yearn Vaults to look at, but they’re some of the most compelling currently. Find the stablecoin that’s right for you, go to Yearn, and chances are you have a promising vault strategy to hop into.
Just keep in mind that Yearn’s transitioning to optimized Yearn V2 Vaults as we speak. These V1 Vaults are still interesting, but it’s something to keep in mind if you’re on the sidelines. Additionally, these vaults aren’t risk-free. Don’t jump in with a large sum thinking it’s free money, there are always risks in DeFi!
How cool would it be to have a Bloomberg terminal, but for DeFi? dex.guru, this week’s plow of the week, is exactly that. Go ahead and check it out!
DeFi’s not down and out, it’s only just beginning. Don’t lose faith now. You stand at the precipice of one of the most interesting cultural movements in human history, and you stand to make a buck along the way. Now’s not the time to shirk, it’s the time to lean in. Farm and learn and repeat. There are great things on the horizon for all of us!
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!