DeFi Pulse Farmer #47: check out the latest Pendle and Convex Farms!
Also, find out about the EIP-1559 testnet launch, and dig into the latest stories and governance updates!
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.
Read “Aave, the global liquidity market,” authored by ChainLinkGod🔥, the latest opinion article published in Alpha Tractor, now available for all readers.
This week, the total value locked (TVL) in DeFi dropped below $50B for the first time since late May 2021. At the time of writing, the ecosystem’s TVL was hovering right around the ~$48B mark.
At this point, uncertainty is reigning. Many people still think the rest of 2021 will foster a bullish uptrend for crypto and DeFi, yet the recent market chop has more folks feeling bearish sentiments than we’ve seen for a while. In the meantime, the verdict’s still out, so bulls, bears, and those in between will just have to keep watching closely to see which way the market breaks next.
As for big recent news, the story of the week was easily the launch of the London upgrade on Ethereum’s Ropsten testnet. London notably contains EIP-1559, which will improve the UX around paying Ethereum gas fees and will burn a small amount of ETH via every Ethereum transaction. This burning dynamic has Ethereans excited, as it means all DeFi and NFT activity will start burning ETH, thus putting positive upward pressure on the ETH price.
Over 88.5k ETH have already been burned in the last few days since London hit Ropsten while stress testing the network. London is slated to activate on the Ethereum mainnet next month, so we’re in store for some fireworks quite soon 🔥 .
Zooming out, let’s finish up per usual by looking at the best-performing DeFi tokens from this past week. That said, the only DeFi token that is up over the past 7 days is ALCX (+1%). Everything else was acutely in the red. In the same span, the DeFi Pulse Index (DPI) understandably dropped ~24% to hit $218.67.
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Earn up to 272% via Pendle’s yield-bearing stables farms
Well, it’s just a formal way of saying that Pendle is a protocol for facilitating trading and hedging around your future DeFi yields. So let’s say you have a yield-bearing asset like Aave’s aUSDC, but you want to access your upcoming yields now.
With Pendle, you can enjoy such access. How? That’s because Pendle divides yield-bearing assets like aUSDC into their base asset, in this case, USDC, and the tokens’ future yields.
Pendle accomplishes this via two derivative tokens: Ownership Tokens (OT), which represent base assets, and Future Yield Tokens (YT), which represents those assets’ upcoming yields.
As such, to mint OT and YT users must first deposit yield-bearing tokens into Pendle. The only supported deposit tokens so far are Aave’s aUSDC and Compound’s cDAI, so keep that in mind. Thus users can immediately sell their minted YT to capitalize on future yields now, or they can deposit their YT into Pendle’s in-house AMM to earn trading fees and presently liquidity provider (LP) rewards via $PENDLE.
Farming $PENDLE with YT
Looking for new DeFi yield pastures to farm this week?
One fresh opportunity is the aforementioned one, i.e. serving as an LP for either of Pendle’s existing YT/USDC pools. The two existing farms here are a YT-aUSDC/USDC pool and a YT-cDAI/USDC pool, which are fetching 241.5% APR and 274.25% APR respectively right now. Not bad for stables-centric farms, right!
If you’re interested in farming either of these pools, you can follow these steps:
Go ahead and start off by securing USDC in your wallet of choice. You’ll need this USDC for LPing in either of these pools.
Next, you’ll need some aUSDC or cDAI to deposit into Pendle. Go to Pendle’s minting interface, input your desired deposit amount, and confirm the mint.
With your new YT and your USDC in hand, head over to Pendle’s Market page, pick your farm of choice and then click on the “three dots” button on the far right of that farm.
Input the amount of YT and USDC you want to LP with, approve Pendle to spend your tokens, and then confirm your supply transaction. Stake your ensuing LP tokens in the stake tab and you’ll be farming $PENDLE!
Whatever you do, don’t forget that current YT tokens face expiry on Dec. 29th, 2022, so plan accordingly.
Pendle Finance has been audited and been built by a public team, yet the protocol is also brand new so caution is warranted. Do your own research and make sure you never farm with more money than you can afford to lose.
Malt Reimbursement Plan
TLDR: Malt Finance, whose coins suffered the wrong end of a DeFi bank run earlier this month, outlines a reimbursement plan for users that lost funds in the incident.
Visor Beta - Incident Report
TLDR: Visor Finance, a platform for automatically managing Uniswap V3 LP positions, explains how a bad actor was able to maliciously withdraw deposits.
Liquidity After Bootstrapping
TLDR: The Balancer exchange team outlines the optimal way to manage “post-sale liquidity allocation” after using a Balancer Liquidity Bootstrapping Pool (LBP).
Bank of Israel to Use Ethereum for Digital Shekel
TLDR: The Bank of Israel reveals it’s using Ethereum for trials of a digital shekel central bank digital currency (CBDC) system.
TLDR: Crypto exchange giant Coinbase releases Solidify, a tool for automatically discerning smart contract security flaws.
Bringing institutional DeFi to the world
TLDR: Circle, the creators of the USDC stablecoin, release the DeFi API. The service provides large businesses an easy avenue for accessing DeFi services.
RabbitHole raises 3.6M to build the on-chain resume for the future of work
TLDR: RabbitHole, a platform that rewards users for making on-chain activities, raises $3.6 million in a funding round led by Electric Capital.
Farm ~83% APR with CVX Staking
Curve Finance, DeFi’s reigning stablecoin, and pegged-asset DEX, offers some pretty juicy boosted CRV rewards to its LPs. But getting boosted CRV rewards can be a bit of a pain and usually is the domain of Curve experts.
That’s all changing now courtesy of Convex Finance, which is a platform that’s focused on making boosted CRV rewards accessible to everyone.
Accordingly, one of the best ways to make money through Convex right now is the project’s CRV staking system, as it’s offering +83% APR at the moment.
To participate in this farm, you first deposit CRV into Convex and this deposit gets locked forever in exchange for cvxCRV. You can then stake this cvxCRV on Convex’s Stake page. Going forward, you’ll start racking up a share of boosted CRV rewards, veCRV rewards, and CVX awards.
Alas, you can also unstake your cvxCRV through the aforementioned Stake interface any time, and you can also exchange your cvxCRV for CRV as you please via Convex’s incentivized cvxCRV/CRV trading pair.
Convex Finance has been audited, so there’s that. The team is anonymous though, which carries certain risks. Just make sure you always manage your risks in DeFi by doing your own research and by never depositing more than you can afford to lose.
Today’s Plow of the week goes to Dune Analytics’ Uniswap v3 LP Distribution dashboard, which community member Yulesa put together. You can also check out his blog post on how to make the most out of it: Querying LP distribution using Dune.
DeFi’s TVL may have whiffed under $50B for the first time in a while this week, but I think if you ask around, most DeFi diehards will tell you they’re not phased by this current chop. The mission and prospects remain unchanged and the fundamentals are better than ever, regardless of short-term market movements. We’re not tourists here, we’re farmers. And we’ll keep farming whatever happens season to season.
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!