DeFi Pulse Farmer #34
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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After hovering near $45B for much of March, the DeFi ecosystem’s total value locked (TVL) slouched some $5B this week to its current position of $40B. That’s a definite downswing, but it shows you just how far DeFi’s come when we're pulling back to $40B. Not bad, right?
At a $40B TVL we’re still within near-term striking distance of $50B, too, so it’s hardly time to think DeFi’s drying up.
Even with some money acutely flowing out of the space lately, recent developments around DeFi suggest there’s plenty of upside in the months ahead.
Major happenings this week included:
The announcement of Uniswap V3’s specifications — Uniswap V3 is going to revolutionize the way people use DeFi, and we got our first full glimpse of the coming system’s power this week when the Uniswap team unveiled its machinery. This AMM is going to be efficient and flexible beyond comparison, so it’s a level up for DeFi in general.
Robert Leshner’s presentation on DeFi and Compound for the Federal Reserve — Leshner, Compound Finance’s co-founder, walked staff members of America’s central banking system through some of the basics of DeFi. Look back on moments like this and realize we watched the tide turn right in front of our eyes all along the way.
The Optimism scaling solution’s mainnet delay — Optimism, the chosen scaling solution of leading DeFi projects like Synthetix and Uniswap, was supposed to be launching within a matter of weeks. Now Optimism’s builders are saying July 2021 will be a more realistic target for the L2 scaling solution’s mainnet release. On the bright side, Optimism’s summer launch gives DeFi something majorly positive to rally around later this year.
Zooming out, let’s recap how DeFi’s best-performing tokens fared this week. The biggest 7-day movers since our last issue include FARM (+50%), ALPHA (+8.8%), CREAM (+4.5%), and REP (+4.2%). The DeFi Pulse Index (DPI) went down 6.89% to $398.41 in the same span.
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Harvest up to 511% via Alchemix’s Farms
So your portfolio is crypto heavy right now. You’ve got ETH, DeFi tokens, and stablecoins. Yet let’s say you’ve also got real-life expenses coming up. Maybe you can’t wait any longer on a car and have to get a new one stat, but you also don’t want to eat into your crypto investments to make it happen.
No problem, with DeFi lending protocols you can collateralize your crypto holdings and borrow stables against them. This way you can get cash flows while still maintaining max exposure to ETH, for example. Then you just pay down your debt, however, suits you.
Such is what DeFi can power today. But debt is key here. You have to stay on top of your interest rates and manually pay back your debts, which can become expensive and meddlesome. It would be amazing if these processes were automated and made easy.
That’s where new lending protocol Alchemix comes in. The first project of its kind, Alchemix puts borrowers’ deposits to work in DeFi yield opportunities and uses the ensuing earnings to automatically repay these borrowers’ protocol debts.
For instance, Alchemix’s first flagship product is a synthetic derivative dubbed alUSD, which people can mint with DAI. So if you deposit 100 DAI into alUSD’s contract, you can draw out 50 alUSD. Then the underlying DAI deposit is sent to Yearn to earn yields that steadily pay off your debt.
This is an interesting and useful system in and of itself, but Alchemix is also quite the attraction right now because of its ALCX yield farms, with ALCX being the project’s governance token and with these farms being a way for the project to bootstrap its community.
The ALCX harvests available right now, from most profitable to least profitable, include:
The ALCX/ETH SushiSwap liquidity pool (511% APY currently)
The ALCX staking pool (336% APY currently)
The alUSD3CRV Curve liquidity pool (80.5% APY currently)
The alUSD staking pool (77% APY currently)
So we obviously have a good range of yield possibilities here. The staking pools are easiest if you’re interested in joining. For these opportunities, simply acquire ALCX or alUSD on the open market and then navigate to Alchemix’s Farms page. Click on your pool of choice, select “100%” to prepare all of your tokens, and then press “Stake” and confirm your deposit to start automatically earning ALCX.
Alternatively, you can consider the two liquidity pool opportunities. If you want to hop into these farms, you can:
Supply your desired amount of liquidity to SushiSwap’s ALCX/ETH pool or Curve’s alUSD3CRV pool.
Take your LP tokens and navigate to Alchemix’s Farms page.
Click on your farm, and then confirm a transaction to stake your LP tokens.
Once this is done you’ll be farming ALCX. You can claim your rewards or unstake through this same dashboard whenever you’d like.
Alchemix has a lot of promise, but we always have to keep our guard up in DeFi. Alchemix has been built by an anonymous team and has no audits yet, so these farms are absolutely not risk-free right now. Consider yourself warned. Farm smartly and safely if you do, and always do your own research too.
Ruler Tokenomics Updates
TLDR: Upstart lending project Ruler Protocol unveils an update to its RULER tokenomics, which among other things entails a supply reduction.
FLOAT and the Money Gods
TLDR: Novel floating stable asset project Float Protocol compares its FLOAT token to other contemporary projects, like RAI and FEI.
Announcing The ALPHA Tokenomics
TLDR: Alpha Finance Lab announces ALPHA tokenomics, which involves users staking ALPHA to earn fees accrued by the Alpha Finance ecosystem.
Hop: Send Tokens Across Rollups
TLDR: The Hop Protocol team introduces its plans for a scalable token bridge among Ethereum’s layer-two (L2) scaling solutions.
Introducing Kashi Lending & Margin Trading on SushiSwap’s BentoBox
TLDR: The SushiSwap community unveils Kashi Lending, a margin trading platform powered by the BentoBox lending program.
Announcing Dragonfly Fund II
TLDR: Dragonfly Capital launches a new $225M venture fund centered around investments in DeFi, NFTs, and beyond.
Farm 10% APY on BTC with Saddle
If you work and invest around DeFi, one of the most common questions you’ll hear lately is, “what’s the best way to get yield on BTC?”.
To that, the top answer is arguably Saddle’s BTC Pool right now.
First off, a quick refresher. Saddle is an AMM based on Curve’s StableSwap system, except it’s been rewritten in Solidity from the original Vyper. The project’s gone all-in on facilitating efficient trading of pegged ERC-20 tokens, with a preliminary emphasis on tokenized BTC projects.
That’s where Saddle’s BTC Pool comes in. Composed of WBTC, sBTC, tBTC, and renBTC, the pool offers traders a low-slippage avenue for tokenized bitcoin trading. It also offers LPs a great farm for harvesting KEEP, the governance network of Keep Network.
Why KEEP? Because Saddle was rolled out by Thesis, the team behind Keep Network, tBTC, and more. So Keep’s incentivizing Saddle LPs with 250k KEEP tokens weekly in order to bootstrap the nascent trading protocol. Currently, these rewards are translating to an impressive +10% APR for BTC Pool LPs!
Music to your ears? Then maybe this harvest’s for you. If so, you can follow these steps:
You’ll be taken to a liquidity dashboard. Choose how much you want to deposit, whether that’s WBTC, sBTC, etc., and then click “Deposit.” Confirm the transaction.
Take your new liquidity tokens over to Keep Network’s Liquidity page and choose the KEEP + SADDLE option. Select “Deposit LP Tokens,” confirm the transaction, and then you’ll be earning KEEP.
Saddle was created by a team of respected builders. It’s also been audited multiple times. This is a relatively safe farm by DeFi standards, then, and it’s an amazing farm by BTC yield standards. Just remember to do your own research, and never deposit more money in DeFi than you can afford to lose.
Today’s Plow of the Week goes to a new excellent feature built by Curve, which allows you to have a comprehensive look at your profits. You can access the new “My dashboard” feature through the pools section on Curve. And did we tell you that you can check out any wallet that you want?
DeFi’s TVL may be down recently, but I think our optimism should be up. No that’s not a pun, as much as we’re excited about Optimism! What I mean is that we might have lost $5B in TVL this week, but if you zoom out, the fundamentals of DeFi are stronger than ever. Don’t lose faith now, keep your head down and farm what you can. Things have only just started to get interesting.
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!