DeFi Pulse Farmer #44
Catch up on a new week in DeFi as we recap gas prices on Ethereum, Layer 2 solutions, Aave, the Farm of the Week, the Conservative Farmer, 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.
It was another growth week for DeFi, as we saw the ecosystem’s total value locked (TVL) rise from $61B to $65.06B since this point last Saturday.
Could it be the beginning of the ramp-up for DeFi Summer 2.0? That remains to be seen, but the timing and recent developments are certainly lining upright. A couple of things worth watching at the moment include:
Gas prices on Ethereum are cheaper than they’ve been in many months, and cheap gas prices were a catalyst for last year’s original DeFi Summer.
Layer-two (L2) and Ethereum sidechain yield farms, like on Arbitrum and Polygon respectively, are entering the primetime and are going to make DeFi more accessible than ever. For example, the Uniswap community just deployed Uniswap V3 on the Arbitrum mainnet, so the future fields of DeFi farming are here now.
As for other DeFi headlines this week, one of the most notable happenings was Aave acutely flipping fellow lending protocol Maker to once more take up the mantle as DeFi’s biggest protocol per TVL. Compound, Polygon, and Curve presently round out the rest of the top 5 largest protocols, which brings us to Polygon: how high can the scaling solution rise now that it’s becoming a base for DeFi? We’ll have to wait and see, but it’s certainly going to be interesting to track this going forward!
Lastly, let’s get you up to speed by taking a look at the week’s best-performing DeFi tokens. 7-day standouts include CRV (+58%), CREAM (+44%), BADGER (+31%), UMA (+14%), and PERP (+33%). In that span, the DeFi Pulse Index (DPI) rose +10% to reach $376.83.
Thank you to our sponsors DEXTF, an asset management protocol that makes managing and investing assets easier, and O3 Swap, a cross-chain Aggregation Protocol that integrates fragmented liquidity across blockchains.
Accumulate and bundle yield generating assets with your favorite longs on DEXTF today, and access the best trading prices on a one-step platform with O3 Swap.
No-IL, low-risk farming via Universe Protocol
It wasn’t until late last year that Ethereum’s DeFi and NFT communities really started to intermingle and coalesce. Since then we’ve seen a boom of DeFi x NFT innovations, yet it’s also the case the scene is still early and these two sectors remain somewhat aloof from one another.
All that said, let’s say your background is that of a humble farmer in DeFi but you’re increasingly interested in diving into NFT land and you’re not sure where to start. What to do?
How about starting on your own terms, with a solid and exciting project, and with staple DeFi tokens you might already possess? If that sounds sweet, then I’ve got a project you’ll probably want to consider, which was first featured in our Alpha Tractor series a week ago: Universe Protocol.
In short, Universe Protocol is a next-gen NFT social platform that’s aiming to serve as a one-stop suite of services for NFT innovators. The project’s infrastructure will accordingly offer a range of in-built features, including auctions, games, media tools, a marketplace, a social network, and a DAO governance system.
This is good news for the young NFT ecosystem, which hitherto has lacked a one-stop decentralized services provider. So where does DeFi come in? The key phrase here is DAO governance. $XYZ is the native token of Universe, and it’s been created to facilitate decentralized governance around the upstart NFT project.
Thus in true DeFi style, Universe is running a yield farming program incentivized by $XYZ to bootstrap its activity and liquidity. And Universe was built by a well-known group of miscellaneous contributors, more than a few of whom hail from prominent DeFi projects, so some of these DeFi projects’ tokens have been chosen to serve as the heart of Universe’s liquidity mining campaign.
How to farm $XYZ
We’re still in the first week of $XYZ farming so we don’t know what the starting price of the token will be, but the token’s initial release is coming soon, and thereafter we can start gauging yields more accurately.
In the meantime, though, the pastures are ripe so here’s what you need to know:
70M $XYZ have been allocated to a 20-week, or 20-epoch, yield farming program.
Since these are single-asset staking pools, they don’t come with the risk of impermanent loss (IL). Moreover, these staking pools are forked from BarnBridge’s smart contracts, which have already proven themselves to be robust and solid in the wild.
As such, farming any of these Universe pools is simple. All you have to do is the following:
Acquire or prepare one of the supported DeFi tokens.
Navigate to Universe’s yield farming dashboard and connect your wallet.
Press the “Staking” button on the pool of your choice.
In the ensuing interface, “Enable” the token with a transaction and then input the number of tokens you want to stake in the interface. Confirm the deposit with another transaction.
From here on out, you’ll be earning $XYZ until the 20 epochs are completed, and you can unstake through the same staking interface whenever you want.
Universe Protocol is backed by plenty of reputable contributors, and its staking infrastructure is based on BarnBridge’s smart contracts so these farms don’t appear to be overly risky. Just do your own research, and make sure you never farm with more money than you can afford to lose.
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 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!
May Monthly Summary and June Sneak Peek
TLDR: The Alpha Finance Team recaps its ALPHA tokenomics update, the Alpha Homora V2 system launch, and more.
Making Maker: May 2021
TLDR: The MakerDAO community highlights its key recent advancements, including the addition of new Vault types and the implementation of a new liquidation framework.
Matcha 2.0: Our Biggest Update Ever
TLDR: The team behind the Matcha DEX unveils the Matcha 2.0 system, which bears a fiat on-ramp, an OTC operation, and more.
TLDR: The xToken project unveils xU3LP, a fungible ERC-20 token representing Uniswap V3 NFT LP positions.
zkSync 2.0: Hello Ethereum!
TLDR: There’s a non-trivial chance that much of DeFi is founded upon zkSync infrastructure in the future. The latest advance from the project shows that DeFi is absolutely in good shape going forward.
Farm with DeFi Big Brains
TLDR: Meet AladdinDAO, a Yearn fork that’s angling to make yield farming accessible for anyone.
Earn up to 150% APY as an Integral LP
THIS STRATEGY INVOLVES A PROTOCOL THAT DEFI PULSE HAD A RECENT PROMOTIONAL ARRANGEMENT WITH. THAT ARRANGEMENT HAD NO BEARING ON THIS CONSERVATIVE FARMER SELECTION, ONLY THE PROJECT’S ONGOING FARMS DID.
Integral is a new kind of automated market maker. It uses a novel Orderbook AMM (OB-AMM) system to be able to mirror the liquidity of essentially any exchange, albeit with way less liquidity on hand.
This system is extremely efficient, and along with other advantages makes it so that Integral LPs face minimal IL. But even with these efficiencies, Integral wants to amass a bunch of liquidity of its own so that one day it doesn’t have to mirror liquidity, it can just be totally dominant on its own. Here, cue in Integral’s ongoing yield farming campaign!
This campaign is centered around Integral’s native token, $ITGR. The token launches on June 11th, but in the meantime, you can still earn pre-launch $ITGR rewards for providing liquidity to Integral’s flagship liquidity pools.
Accordingly, Integral is currently generating ~80% APY on WBTC/ETH, ~100% APY on Stable pairs, and ~150% on ETH/Stable pairs. If interested, simply head over to Integral’s Pool page, connect your wallet, and deposit in any amount of tokens you’d like to your pool of choice. You’ll start earning $ITGR rewards immediately.
Integral appears to be a solid project, but never throw caution to the wind in DeFi. Young protocols can have vulnerabilities that no one realizes just yet. In the meantime, do your own research and only farm if you farm responsibly.
Still trying to figure out tools to track your fees on Uniswap V3? Look no more. The Uniswap V3 Fee Calculator lets you calculate the approximate fees you will potentially receive for providing liquidity on Uniswap V3 at different price points. But beware, the tool doesn’t account for Impermanent Loss!
I think the chances of DeFi Summer 2.0 happening from here are +50%. It’s impossible to say what happens next, but I don’t think 2021 has seen the last of its major crypto surges. In the meantime, we keep our heads down and farm what we can!
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!