Find out about Element's latest farms and mStable's save on Polygon!
Also, dive into Uniswap's deployment to Optimism mainnet, Circle's public offering announcement, the stories of the week, 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.
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.
DeFi is showing a bit of renewed strength lately, with the total value locked (TVL) in the ecosystem having risen from $52.94B to $55.73B since our last issue of the Farmer. That makes this the second week of steady growth in a row now for DeFi after its TVL slump to ~$49B toward the end of June!
So we might not have seen explosive growth in recent days, but the acute return of DeFi’s uptrend has more people starting to settle down and feel firmly bullish again. Besides, there’s plenty of reasons to stop and smell the roses!
For example, two big headlines from this week that have us feeling hopeful for DeFi’s future include:
Uniswap deployed its V3 protocol to Optimism’s layer-two (L2) mainnet, suggesting it’s now only a matter of days until near-instant, near-free trading is coming to Uniswap. Ethereum’s most popular DEX arriving on L2 is a moment many of us have been excitedly waiting for, and it could play a non-trivial role in kicking off DeFi Summer 2.0 if a yield farming frenzy ensues!
Circle, the company that issues the popular USDC stablecoin, is going public as part of a “SPAC” deal. As such, Circle’s maneuverings continue to put USDC in a position to serve as a major bridge between CeFi and DeFi going forward. The U.S. Federal Reserve may never have a need for issuing its own central bank digital currency if USDC wins out in the private sector and then beyond.
Wrapping up the recap, let’s take a look at the best-performing DeFi tokens from this week. In that span we saw strong runs from INST (+100%), ALPHA (+75%), SNX (+68.5%), FXS (+34%), and AAVE (+27%). We also saw the DeFi Pulse Index (DPI) rise 25.6% to reach $315.88.
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Farm up to 23% via Element.fi’s Earn app
DeFi’s at its best when it offers users flexibility. Element Finance is a new protocol whose way of offering flexibility entails giving people the ability to split their DeFi yield-bearing positions into base assets and yields.
So what do I mean by yield-bearing positions, exactly?
For instance, the Element team launched with support for the Yearn LP token of Curve’s LUSD + 3CRV pool, crvLUSD, and has since added support for the crvTricrypto LP token.
Using the former as an example, Element users can deposit crvLUSD to mint PT (principal tokens that represent the underlying base assets, in this case, LUSD, DAI, USDC, and USDT) and YT (yield tokens that track the average variable interest of those aforementioned base assets over a specific timeframe).
The main idea, then?
Give people the ability to boost their yield by minting PT and YT from their base assets and providing liquidity to Element’s custom pools.
Give people the ability to invest in base assets at discounted valuations courtesy of PT since these tokens can’t be redeemed until their specified terms are completed.
How to earn yields with Earn
Element Finance hasn’t released a governance token (yet), so there’s no liquidity mining program to speak of presently. Yet Element’s Earn app is offering yields over 20% right now, so the project certainly has farms worth considering.
Specifically, there are three farms to consider right now:
90-day crvLUSD v2 Vault
180-day crvLUSD v2 Vault
40-day crvTricrypto v2 Vault.
If you want to participate in the first two, make sure to prepare by acquiring some LUSD3CRV-f tokens. If it’s the latter you’re interested in, acquire some crvTricrypto tokens. Once you have your tokens ready, you’re ready to head to Element Finance’s Earn app.
To make money with Earn, you can follow these steps:
Once on the Earn page, connect your wallet.
Select which of the Vaults you want to join by pressing the “Show” button on your opportunity of choice.
Proceed by depositing your desired amount of LUSD3CRV-f or crvTricrypto tokens into the provided interface. You’ll have to approve the minting first and then complete a separate deposit transaction. Make sure you keep some LUSD3CRV-f or crvTricrypto tokens around so you can LP with them in Element Finance’s custom Balancer pools.
Next, click on “LP for additional yield.” In the ensuing interface, input how much liquidity you’d like to provide with your PT and/or YT tokens, and follow through with this new deposit transaction.
Now you’ll be fetching yields as an LP through Element Finance’s Earn app!
Element Finance is a new DeFi project, and the Earn app has its share of risk, so make sure you don’t waltz into these farms lightly. Do your own research, and never farm with more money than you can afford to lose!
Introducing SMART Exposure
TLDR: Risk tokenization protocol BarnBridge unveils SMART Exposure, a dapp for automatically managing ERC20-to-ERC20 positions.
Introducing Notional V2
TLDR: Fixed-rate lending and borrowing protocol Notion presents the protocol’s V2 system, which among other things introduces longer-dated maturities.
Balancer Launches Stable Pools
TLDR: The Balancer AMM project rolls out new stable pools for “assets that trade at a similar price,” starting with the staBAL3-BTC (WBTC/renBTC/sBTC) and staBAL3-USD (DAI/USDC/USDT) pools.
Propose Block for London Mainnet Activation
TLDR: Ethereum Core developers propose block 12,965,000, or ~Aug. 4th, to serve as the launch point for Ethereum’s London upgrade. This upgrade will activate EIP-1559, which will improve the UX of Ethereum’s fee market.
Announcing liquidation notifications by EPNS for Alpha Homora users
TLDR: The Ethereum Push Notification Service (EPNS) now supports liquidation-risk notifications for Alpha Homora V2 protocol users.
Optimism Gas Update & WETH Distribution
TLDR: Synthetix notifies its Optimism users that fees will no longer be subsidized on the L2 as of this week and that 30 WETH will be distributed to help eligible users bootstrap mint, burn, and claim transactions.
Farm ~20% via mStable’s mUSD Save app
For today’s Conservative Farmer we’re talking mStable, one of DeFi’s top infrastructure projects for pegged-value cryptocurrencies.
We’re tracking mStable this week because the project just deployed on Polygon’s sidechain scaling solution. Now not only can you use mStable super affordably on Polygon, you can also safely farm dual MTA and MATIC rewards via mStable’s Save app — a passive savings account for DeFi!
If you’re interested in these DeFi pastures, head over to mStable’s Save dashboard and connect to the Polygon network. First, make sure you’ve bridged over some of the supported assets (USDC, DAI, USDT, mUSD, and MATIC) or picked them up on a Polygon DEX like QuickSwap.
At this point, input into the Save interface which/how many tokens you’d like to save on. Once you’ve confirmed the ensuing deposit transaction, you’ll start earning ~4.5% APY in fees and 14.4% APY in combined MTA and MATIC rewards! Not too shabby, right.
mStable is a proven project, and mStable’s Save app has been designed to be a conservative and reliable avenue for yield. Even still, we can never throw caution to the wind in DeFi. Make sure to do your own research and only invest responsibly.
For all NFT farmers out there, this weekend’s Plow of the Week is for you. Check out Rarity Tools, which allows you to check your NFTs' rarity and follow your favorite ones by volume, price, and owner count!
If you’re not farming much now, consider getting ready to. Both the Optimism and Arbitrum L2s are slated to have their mainnets activated for public use later this month, so we may be on the precipice of a farming frenzy! Get your portfolio … ahem, I mean capital tractors … ready accordingly!
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!