DeFi Pulse Farmer #6
Catch up on a new week in DeFi as we recap Yearn Finance, Open Orgs, updates on the Nomigate, the Farm of the week, and the Conservative Farmer.
Welcome to the sixth edition of 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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Interestingly, this hovering near $8B comes after a beleaguered and simultaneously hot Sushiswap began its “Sushiswap Classic” migration on September 9th. The Uniswap-centered transition acutely tanked Uniswap’s TVL, sending it from $1.43B to $401M on the day, or approximately $100M more than before SushiSwap entered the market, suggesting that the vampire mining was not zero-sum.
This Wednesday drawdown temporarily pushed DeFi’s TVL down to $6.14B, but capital inflows around the ecosystem since then have made it so the TVL essentially didn’t change week to week.
As for what did change this week, that’d be Sushiswap creator Chef Nomi’s mind. On Friday, the developer returned the $14 million worth of ETH earned from their recent blindside market dump of $SUSHI.
In other news, the big DeFi intrigue this week was yEarn’s announcement of StableCredit, a coming product that will serve as a single-sided automated market maker (AMM) and lending service. The system will let users draw out debt-based stablecoins against their deposits in a collective pool of assets.
yearn.finance @iearnfinanceIntroducing StableCredit, a new protocol for decentralized lending, stablecoins, and AMMs. https://t.co/Cuoo2OMi5H
Lastly, a handful of DeFi projects had a strong week: YFI and NXM saw 7-day price gains of 49% and 21% respectively, Loopring’s LRC rose 20% as Layer-2 scaling optimism continues to grow, and upstart lending platform Cream’s CREAM token spiked up 113%.
The importance of open orgs
As we continue to move forward in the new market cycle ignited by the relaunch of Yield Farming with the introduction of $COMP in June, we're starting to see the first indicators of how the different governance distribution systems look like and which ones can be fairer.
The idea that liquidity is the ultimate moat for DEXes business models' defensibility is starting to get questioned as vampire projects look to extract their current liquidity with the promise of better governance distribution. In some cases, even the promise of delivering breakthrough innovations to what is already in place.
Bull markets quickly make the attention shift to price go up, and price go down short term narratives. Still, if one thing is evident, collaborative competition in the space moves the industry forward at breakneck speed. As more and more teams iterate in the open, the pace of innovation we're going through will potentially lay the basis for the financial infrastructure of tomorrow.
Open organizations are becoming more and more predominant in the space. Demonstrating that community-driven projects make a difference, as they can execute at unimaginable speed if they have a culture focused on an obsession with shipping prototypes that can be tested in the open week after week.
Even though we will potentially go through more hiccups in the coming months, DeFi is demonstrating that its community-driven resiliency is a central feature and one of DeFi’s ultimate moats.
Stories of the Week
yEarn Introduces StableCredit
TLDR: yEarn rolls out a decentralized lending and stablecoin protocol akin to a combination of Uniswap and a single, community-shared Maker Vault.
UMA Announces the Yield Dollar on renBTC
TLDR: UMA unveils uUSD, a yield dollar that uses renBTC as collateral. uUSD can be deposited with USDC into Balancer to earn BAL, REN, and UMA rewards.
The Synthetix Volume Program
TLDR: Synthetix is running a fee rebate program for projects that natively integrate Synth trading.
Compound Autonomous Proposals
TLDR: Compound reveals a new community-focused tool that considerably lowers the barrier to creating Compound governance proposals.
Uniswap Teases Native Token
TLDR: Uniswap creator Hayden Adams posted an image this week apparently teasing the coming launch of a Uniswap token.
MCDEX Announces the Closing of Its First Round of Funding
TLDR: Upstart decentralized exchange MCDEX completes its first funding round with investments from DeFi stalwarts like Mariano Conti, Daryl Lau, and Robert Leshner.
MakerDAO Debt Ceiling Raised Again
TLDR: Lending protocol MakerDAO raised its global debt ceiling from 708M Dai to 763M Dai.
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Farm of the Week
Harvest 178% via SWRV Liquidity Mining
Peeped our recent Swerve Alpha Tractor? We’ve upgraded it to Farm of the Week, and it’s no surprise why: this new project’s harvest is bountiful 🚜.
Indeed, the popular stablecoin exchange Curve had its limelight eclipsed this week by Swerve, a new “fair launch” Curve fork that, unlike its source project, is 100% community-owned and governed.
Out of the gate, Swerve features a single swUSD pool based on yEarn’s Y Pool and supports the Dai, USDC, USDT, and TUSD stablecoins. Like how CRV works for CRV, SWRV tokens are rewarded pro-rata to Swerve liquidity providers (LPs) as part of a liquidity mining campaign to bootstrap the protocol during its rise.
To farm SWRV, you’ll start by depositing one or more of the Swerve Y Pool’s supported assets. At this point, you’ll need to stake your Swerve Pool LP tokens using the project’s swUSD liquidity gauge to begin racking up SWRV. The going APY is 178% at the moment.
Additionally, Swerve LPs can lock up SWRV tokens to boost their yields, with the maximum APY multiplier being 2.5x and the multiplier rising in line with how long you’ve had your SWRV locked. According to reports by early users, this “2.5x” boost has generally led to APY increases of ~15% so far.
Here’s the minimum amount of SWRV that a farmer with $10,000 to deposit would need to lock up in order to activate this yield boost.
Risks: Please note that when staking in a Swerve pool you’re exposed to:
Smart contract risks inherent to Curve and Swerve.
Asset risks via the swUSD pool.
Swerve’s governance structure is novel and untested.
The Conservative Farmer
Harvest up to 40% with your stablecoins with DeFiDollar
DeFi Dollar (DUSD), which made it to our Alpha tractor series two weeks ago, is a stablecoin that leverages DeFi protocols to maintain the peg to the US dollar. Users deposit stable coins such as DAI and TUSD and mint DUSD in exchange. The stable coins are then deposited to Curve Finance pools in exchange for LP tokens and start generating income from the pools' trading fees.
How to get rewards by staking in DeFi Dollar
To obtain rewards farmers have to mint dUSD tokens by depositing their stable coins. So make sure that you have stable coins in your wallet before you get started.
1-Navigate to DeFi Dollar’s Mint application.
2- Connect your wallet and stake one or a combination of the following stable coins: DAI, USDC, USDT, sUSD.
3-Click on “Mint” at the bottom of the page. The app will prompt you to approve each one of the stable coins you’re willing to stake. Once you have approved each one, click on “Mint” once more.
4-Once you have those fresh dUSDs in your wallet, move on to the middle tab: “Stake”.
5-Insert the amount that you want to stake, click on “Stake” and that’s it, you will start earning Curve’s trading fees plus CRV and SNX rewards, which will be distributed to the LP addresses on a weekly basis by the DefiDollar team.
Please keep in mind that staking has a minimum cost of $40.
Risks: Please note that when staking in DeFiDollar you’re exposed to:
Issues in DefiDollar smart contracts.
Centralization with reward distribution.
Systemic issues and smart contract bugs in Curve. See https://www.curve.fi/risks.
Systemic issues with Chainlink price oracles.
Systemic issues with the stable coins in supported peaks.
Plow of the Week
Want to stay on top of every farm's starting date and have easy access to the token contracts information? You should check out this new tool by Etherscan: Yield Farms.
Alpha Leaker of the Week
This closes one more week in DeFi for the history books.
As farmers get some rest through the weekend to prepare for a new week, we continue to gather sweet alpha for our honest farmers.
We've got at least two Alpha Tractors on our radar, so go ahead and smash that sub button to have them delivered directly to your inbox within 24 hours of going live ;).
Stay safe and keep up the honest work!
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!