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.
At this very moment, the total value locked (TVL) in DeFi is at a new all-time high just shy of $80B. In this column at the start of the year I predicted that DeFi’s TVL would hit $100B by the end of 2021. Now, it looks like I could have gotten away with forecasting $100B by the start of the summer!
It’s clear, then, that Ethereum DeFi is seriously starting to take off. Things are still early, of course, but now it’s starting to seem more and more inevitable that DeFi eventually becomes a staple all around the world. That ubiquitousness may still be years or even decades away, but the ecosystem’s recent blooming is starting to give many of us visions of the futures that can be. And we like what we’re seeing …
Anyways, back to the beat. It was a huge growth week for DeFi dapps, many of which experienced considerable TVL inflows in that span. For the top dapps, those inflows looked like so:
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Maker ($10.51B 📈 $13.41B)
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Aave ($9.64B 📈 $10.98B)
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Compound ($9.20B 📈 $10.67B)
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Uniswap ($6.22B 📈 $7.65B)
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Curve ($6.00B 📈 $7.50B)
Now, let’s zoom in on some of the biggest headlines this week. Major happenings we saw included:
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Major crypto exchange OKEx added deposit and withdrawal support for L2 protocol Arbitrum — Ethereum users have been itching for large exchanges to add L2 support, so this week OKEx was notably the first to step up to the plate in integrating Arbitrum, a project based on Optimistic Rollups technology. Expect a lot more exchanges to follow suit going forward.
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Speaking of L2 advances, StarkWare’s scaling suite has now facilitated +$1B worth of trading volume — StarkWare’s suite comprises both a ZK-Rollup implementation and a Validium implementation. The former has now powered ~$750M in volume via dYdX and the latter has powered ~$250M via both DeversiFi and Immutable. Scaling is still early, but it’s absolutely arrived.
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Uniswap released its V3 system this week, and it’s epic — It’s Veni, vidi, vici for the Uniswap team as they’re now, what, some 1-2 years ahead of all DeFi AMM competition technology-wise? The new system provides extreme efficiency for LPs, and it’s already facilitating nearly 70% of all Uniswap volume currently over the V2 and V1 implementations. Yeah, it’s a big deal!
Last on the agenda is our weekly recap of the best-performing DeFi tokens over the last 7 days. In that span, we saw notable runs from LDO (+70%), ETH2X-FLI (+57%), MKR (+30%), and LINK (+27%). The DeFi Pulse Index (DPI) also rose 24.46% to $578.32 on the week.
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Earn 25-60% APR via SushiSwap x Polygon joint liquidity mining!
For the previous Farm of the Week, we explored how you could rev up your DeFi tractors to fetch triple-digit APRs on Polygon’s Quickswap DEX. We’ll keep the Polygon theme going strong this week by focusing on the new SushiSwap + Polygon joining liquidity mining program, which also has some sweet APRs right now.
First thing’s first, let’s briefly review the 101 on Polygon. Polygon’s a scaling suite for Ethereum that’s currently booming thanks to its agreeable PoS sidechain implementation, which I’ll simply refer to as “Polygon” from here on out. Just remember: Polygon also has a live Plasma implementation, and the project’s working on adding support for Optimistic Rollups, ZK-Rollup, and more.
All that said, the top DeFi dapps have all respectively been exploring a range of scaling solutions lately, and SushiSwap — one of DeFi’s most popular AMMs so far — hit the ground running back in March by integrating support for Polygon.
Yet the key to DeFi trading experiences is liquidity, at least to date, so the SushiSwap community’s now kicked things into gear by approving a new joint liquidity mining program with Polygon.
The gist? LPs can earn SUSHI and MATIC rewards (Polygon was formerly known as Matic) by providing liquidity to SushiSwap’s Polygon implementation!
So if these pastures are getting you itchy, you’ll want to start by making sure you have the Polygon network setup in your MetaMask (again, it’s archaically referred to as Matic in MetaMask — no worries here). It’s really easy to do this, you basically just click a button, and then you can use something like Zapper’s Polygon bridge to migrate your desired assets over to the sidechain.
Once you have your wallet prepped, you can follow these steps to start farming SUSHI and MATIC:
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Acquire SushiSwap LP (SLP) tokens for your desired token pair, which can be done through the SushiSwap Pool page (connect to the Polygon network through MetaMask first). You can even migrate liquidity over to Sushiswap from Quickswap at this point if that suits you.
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Navigate to SushiSwap’s Yield dashboard.
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Select your token pair of choice, input the amount of SLP tokens you want to stake, and then click “Stake.” Confirm the ensuing transaction.
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Now, you’ll be earning both SUSHI and MATIC rewards! Unstake and claim your rewards through the same staking interface anytime.
These may be attractive DeFi yield pastures at the moment, but you always want to use your good sense in this space no matter how good anything sounds. Do your own research, and never invest more money into any farm than you can afford to lose.
Farm 12% on ETH or 17% on BTC via Ribbon Finance
For those of you who may be unaware, let’s catch up real quick: Ribbon Finance is a protocol centered around providing crypto-structured products. To date, the Ribbon team’s mainly focused on volatility, yield enhancement, principal protection, and accumulation products.
The newest release from Ribbon Finance is the project’s Theta Vaults, which are avenues to generate “high yield on ETH [or WBTC presently] through running an automated covered call strategy with one click.”
A covered call strategy may sound complex at first, but the general idea is simple: Theta Vaults allow you to fetch guaranteed yield through selling call options, though admittedly at the expense of the potential upside of simply holding ETH or WBTC.
So that brings us to our main point: if you’re cool with locking in decent yield, then Ribbon’s Theta Vaults might be for you. Simply take your ETH or WBTC over to Ribbon’s Yield dashboard, select the amount of ETH you want to deposit, press “Deposit,” and confirm the transaction. Then you’ll be farming away at some steady yields.
Here, you’ll want to keep in mind that both the ETH and WBTC Theta Vaults are at their current supply caps. At the same time, these caps might be enlarged by the Ribbon community in short order, so these are still pastures worth keeping on your radar in the immediate future. Alpha is alpha is alpha, after all.
We find these farms really interesting, but that doesn’t mean you need to throw caution to the wind. Don’t ape into anything mindlessly. Do your research, and only invest responsible amounts into DeFi farms if/when you do at all.
This week finally saw Uniswap’s v3 launch. And, as you all know, v3 has a handful of super exciting updates. So, if you want to find out how the different strategies can impact your LP positions, DeFi Lab’s Uniswap V3 Strategy Simulator is for you. Go ahead and check it out!
Okay, what’s your bet on when we’ll see a $100B TVL in DeFi? Weeks, months, years? With the rate things have been going lately, it’s not out of the question that we see a +$300B TVL in the ecosystem this year. Of course, who knows what happens from here, but it’s increasingly looking like 2021 isn’t the year to bet against DeFi.
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!