Welcome to DeFi Pulse Farmer!
In this newsletter, you’ll find weekly trends on the latest yield farming opportunities along with an overview on the top stories in DeFi.
If you’re looking for cutting edge farming tactics, this newsletter is for you.
Each edition, we’ll focus on two types of strategies. ‘Farm of the Week’ - a more sophisticated, risk-intensive tactic and ‘Conservative Farmer’ - for risk-averse traders looking to dip their toes into DeFi without as much potential risk.
To protect our alpha, these strategies will be hidden behind a paywall for serious farmers only. We’d like to make it clear that in order to see worthwhile returns from our strategies given current gas prices, we recommend getting started with a minimum of $10k.
Every edition will feature free insights into trends and stories while the real crops are saved for paid subscribers. DeFi Pulse Farmer will drop every Saturday at Noon EST.
Don’t forget that DeFi protocols are highly experimental technology platforms that expose your assets to financial and protocol risks. Don’t invest more than you can afford to lose.
The first edition is on us, enjoy!
Recapping the yield farming craze
Yield farming has propelled total value locked (TVL) to all-time highs, zooming past $4.4B this week and up 120% in the past 30 days. Driven by protocols like Compound, Balancer, and Curve, capital is rapidly flowing into the growing sector to take advantage of attractive APYs buffered by governance token rewards through liquidity mining.
Even young projects like yEarn (9) and mStable (13) have quickly shot up the DeFi Pulse leaderboard, aggregating $168M and $53M respectively in their less than two months of being live.
To maximize yield, ‘Crop rotation’ - or the practice of shifting capital around to get ahead of demand -’has become one of the defining activities in DeFi.
Find out more about how it all started here: The Yield Farming Frenzy and its Impact on DeFi.
DeFi Funding Heats Up
Funding is flowing into DeFi at a rapid pace. With Uniswap announcing an $11M Series A round, DeFi projects are closing funding quicker than ever. In the past month alone, we’ve seen Reflexer Labs, dHedge and DerivaDEX announce $1M+ seed rounds pre-mainnet launch.
These public announcements come with at least a dozen other raises settling behind closed doors. As rounds become more competitive, VC funds are flocking to stay ahead of the growing trend.
Stories of the Week
Delegated Vaults Explained, by Andre Cronje
TLDR: Join a delegated vault and enjoy whale benefits.Set Protocol V2
TLDR: Farming support is coming to TokenSets.
mStable EARN
TLDR: Harvest MTA rewards by staking LP tokens through the EARN dashboard.dYdX ETH-USD Perpetual Contracts
TLDR: Trade ETH with 10x leverage in a non-custodial fashion with no expiry date.Akropolis update
TLDR: Delphi makes yield farming accessible to retail plus a new governance token.DeFiGod’s take on how to value governance tokens
TLDR: number go up.
Governance Watcher
Balancer reduces BAL rewards for pools with soft-pegged assets.
yEarn revisits new YFI issuance schedule after swinging the vote in the last hours.
yEarn passes proposals to add LINK and SNX as collateral for first volatile yVault collateral.
Shoutout to our friends at OKEx for distributing DeFi Pulse Farmer among their community!
Wanna get involved? Get in touch!
Farm of the Week
Harvest 139% APY through mStable’s MTA/ETH Earn incentives
mStable’s governance token - MTA - made big waves with its cautious initial offering using Mesa’s batched auction. Following its settlement price of roughly $1.80, MTA value has quickly surged to $5.20/token, representing a 2.9x gain since price discovery began.
As a part of their new EARN dashboard, mStable quietly snuck in a new rewards pool in tandem with its ongoing Balancer liquidity mining incentives.
The MTA/ETH Uniswap pool is currently sitting at just under $6M in liquidity, making it one of the least farmed mStable pools with the highest allocation of weekly MTA rewards.
With 25,000 MTA per week up for grabs, farmers share a pro-rata claim on ~$130k worth of rewards by contributing liquidity to the 50/50 MTA/ETH pool. Here’s how this breaks down over different intervals.
How to farm using mStable EARN
To farm MTA, users must provide liquidity to any of the MTA rewards pools.
For this week’s strategy, users should navigate to the MTA/ETH pool to purchase MTA with minimal slippage.
Using MTA, farmers should add liquidity in the form of 50% MTA, 50% ETH (or WETH).
After joining the pool, farmers will need to stake their UNI tokens via the Earn dashboard to be eligible for rewards.
mStable EARN Benefits
The great thing about this pool is that rewards accrue in real-time, contrary to how MTA was previously distributed once a week following random snapshots over the course of the week.
EARN pools do not require any minimum lock-up period and can be freely entered and exited at the farmer’s convenience.
While 50/50 pools do expose farmers to the most impermanent loss, we expect MTA and ETH price to be relatively stable over the coming week, making for a good opportunity to reap some benefits on the new liquidity aggregator with $53M in mUSD minted in just under two months of being live.
The Conservative Farmer
Harvest 24% APY on your stablecoins with mStable SAVE
mStable is a liquidity aggregator offering lending on same-peg assets, starting with stablecoins. One of their key features, mStable SAVE, allows farmers to obtain up to 24% APY when locking their mUSD.
How to invest in mStable SAVE
SAVE is only accessible using mStable’s native stablecoin, mUSD. On mStable, users deposit USDT, USDC, TUSD, DAI, or a combination of any, to mint mUSD at a 1:1 ratio.
Alternatively, farmers can purchase mUSD on Balancer and Uniswap.
Once farmers have their bags full of mUSD, go to the mStable SAVE, stake your holdings, and start collecting that sweet sweet yield.
mStable SAVE returns
When depositing an mASSET into the SAVE contract, you are credited with Savings Credits based on the current exchange rate.
Each time a Saver deposits, the interest is collected from the mASSET and deposited here, increasing the exchange rate at the benefit of existing Savers.
Credits become increasingly valuable as new deposits are made and the exchange rate increases. In other words, the earlier you enter the pool, the better.
Currently, only 27.66% of the mUSD supply is locked via SAVE, offering the following benefits:
The risk of the peg breaking on the bASSET is decreased.
The rewards for Saver’s are more lucrative.
Total mUSD supply (Green) vs mUSD locked in SAVE (Blue)
Plow of the Week
Looking to get ahead of the newest farm?
One community member - Weeb McGee - has taken it upon himself to aggregate some of DeFi’s best yield strategies through a web3-native dashboard at yieldfarming.info
You’ll find a list of top strategies across Synthetix, Curve, mStable, and UMA along with top resources to follow along with changing trends.
It’s even got a “Fun Zone” for highly experimental trends like delegated Tendies staking - a way to pool tokens and collect staking rewards for being a top 50 TEND holder.
Alpha Leaker of the Week
Closing Thoughts
This marks the first edition of DeFi Pulse Farmer.
As a resource best known for our Total Value Locked leaderboard, DeFi Pulse is excited to better demonstrate our adept knowledge on the latest trends in DeFi. We’re always looking to expand our contributor list and give you a chance to be featured in next week’s edition.
If you’ve got a strategy you think is worth leaking, join the Concourse Discord and make some noise in the #defi-pulse-community channel. Those who are featured will receive a shoutout on Twitter with over 25k followers.
Until next week, keep up the honest work!