DeFi Pulse Farmer #9
Catch up on a new week in DeFi as we recap MakerDAO, Uniswap, the Farm of the week, and the Conservative Farmer.
Welcome to the ninth 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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Looking to catch up on the last two weeks? We’ve got you covered!
It was a week of modest shrinkage for DeFi. The ecosystem’s total value locked (TVL) is currently hovering near the $10.9B mark, a downswing from DeFi’s $11.22B TVL on Monday.
One of the biggest headlines this week was how trading protocol Uniswap became the first DeFi app to cross the $2B TVL milestone. It’s a remarkable achievement, considering the DEX is now as big as the entire DeFi ecosystem was at the start of July 2020.
Another buzzy project this week was leading DeFi lending protocol Maker, as its fundamentals are up across the board. First, the protocol’s DAI stablecoin is in big demand: the token’s total supply is nearing the 1B mark as helped by new supported collateral types like COMP, LINK, and LRC. This growth and the reactivation of the DAI Stability Fee in the ETH-A Vault has pushed DAI’s Surplus Buffer toward 2M. Once that milestone’s crossed MKR burns begin, which enriches MKR holders via deflation.
Stories of the Week
DOUGH Initial Balancer Listing
TLDR: Asset management protocol project PieDAO unveils an Initial Balancer Listing and yield farming campaign for its DOUGH token.
APY.Finance Announces Liquidity Mining for APY Governance Tokens
TLDR: New yield farming project APY.Finance rolls out a stablecoin-based yield farming program around its APY token.
Nexus Mutual Launches Shield Mining
TLDR: Insurance protocol Nexus Mutual launches a staking feature known as shield mining that lets coverage providers earn protocol token rewards.
Rari Capital integrates Aave
TLDR: Automated yield aggregator Rari Capital integrates with lending protocol Aave to offer its users better yield when it comes to lending top stablecoins.
On markets, competition and social norms, by Kain Warwick
TLDR: Monster Twitter thread by Synthetix’ Founder.
The Dawn of Programmable Cashflows
TLDR: Superfluid protocol allows users to perform token distributions without gas costs.
Andre Cronje’s Eminence’s gaming multiverse gets attacked before launch.
TLDR: Hours after Andre Cronje teased his latest creation, degen farmers flocked to farm the platform’s token, and an attacker drained the pools shortly after.
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Farm of the Week
Harvest 180% with BAL Liquidity Staking
Recently Balancer’s Liquidity Staking system has been affording users some of the most solid yield farming opportunities around, so today we’ll dive into two promising BAL rewards farms: the 66/33 BAL/WETH pool and the 50/50 BAL/USDC pool.
We’ve previously shared the pool opportunity around 66/33 BAL/WETH back in DeFi Pulse Farmer #4. We think it’s worth sharing again because it’s maintained its APY nicely over the past month: the pool has sustained above 150% APY even in the face of acute DeFi market and BAL crashes in that span. At the time of writing, 66/33 BAL/WETH was generating yearly returns over 180%.
Liquidity rallied into the pool from Sunday to Wednesday ahead of a considerable drop-off starting on Thursday. This has brought the pool’s total liquidity to approximately $8M at the moment.
To visualize the opportunity, here’s a look at estimated returns for farmers entering with $10,000 worth of capital ($6.7k in BAL and $3.3k in ETH).
Next, let’s examine the slightly more conservative but still very solid 50/50 BAL/USDC pool. Presently, the pool is netting an APY of around 162%.
Liquidity surged into the pool toward the end of the week but dropped sharply on Friday. That places the pool’s total liquidity over $8M currently.
The estimated returns for farmers entering with $10,000 worth of capital ($5k in BAL and $5k in USDC) are as follows.
Remember, providing liquidity to these pools exposes you to the risk of impermanent loss. Please understand IL risk before joining so you don’t lose money as a result of confusion. For example, if the price of BAL outperforms ETH, 66/33 BAL/WETH liquidity providers will lose some of their BAL holdings because of Balancer’s weighted rebalances.
The Conservative Farmer
Harvest 45% with C.R.E.A.M
First showcased in our Alpha Tractor Series, the 95%cyUSD / 5%CREAM pool, which is part of the brand new automated market maker (AMM) creamY, is currently providing returns of up to 45% APY in the form of C.R.E.A.M, the AMMs governance token.
How to farm C.R.E.A.M in creamY pools
Farmers who want to take advantage of this opportunity must know that they will first need to mint cyUSD, a stable coin that accrues yield simultaneously. cyUSD is composed of a basket of assets that includes stable coins such as U.S.D.C. or DAI, and others such as yCRV (Curve), and cUSDC.
Head to the creamY USD Deposit section and select the USD token or combination of tokens you wish to allocate to mint cyUSD.
Once you have cyUSD tokens in your wallet, head to the C.R.E.A.M Pool 2, click on add liquidity, select the option “Single asset”, and stake your assets. After staking, you will receive CRPT tokens in exchange, representing your percentual ownership of the pool.
Finally, head to the C.R.E.A.M rewards section, click on the 95%cyUSD / 5%CREAM pool, and stake your CRPT tokens.
And that’s it, you will now be farming C.R.E.A.M! Please remember that you will have to follow up and collect your returns directly from the rewards section.
Plow of the Week
This week’s plow of the week is the above-mentioned Pools Vision. Pools Vision provides farmers with a single interface from where they can track all Balancer pools. The tool allows users to see the total volume, fees, APY, and even lifetime fees across every pool. If you’re into Balancer pools, this a tool that will help your farming!
Alpha Leaker of the Week
On another quiet week, farmers can use this weekend’s extra time to deep dive into the high-level of DeFi and compare it to the evolution of previous technological waves.
Until next week! Happy reading and have a good rest!
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!