⍺ DeFi Alpha: 50-1700% APY Yield Farming With Stablecoins On Spool
DeFi Alpha is a weekly newsletter published every Friday, contributed by Defiant Advisor and DeFi investor at 4RC, DeFi Dad, and our Degen in Chief yyctrader. It aims to educate traders, investors, and newcomers about investment opportunities in decentralized finance, as well as provide primers and guides about its emerging platforms.
Two years ago, DeFi investors could easily name every yield farming opportunity without much effort. It was a simpler time, when only a handful of teams had launched with any liquidity to trade, lend, borrow, provide liquidity, or even demonstrate new primitives such as no-loss savings by PoolTogether.
But times have changed! DeFi liquidity has grown to hundreds of billions of dollars across Ethereum with new burgeoning DeFi economies taking shape on EVM-compatible chains such as Polygon and Avalanche and non-EVM chains such as Terra and Solana. Any given day, a new DeFi or NFT project is launching. So after writing and creating countless DeFi guides and tutorials since 2019, we at The Defiant agreed it’s time we publish a more detailed weekly guide on all you need to know to keep up with new and old yield earning opportunities.
This is DeFi Alpha by The Defiant.
We are sending this issue to all Defiant subscribers. If you want to keep receiving this newsletter going forward please subscribe here:
🙌 Together with:
Sperax USD, the FIRST Auto-yield stablecoin on Layer 2, connects you with modern money. Learn more!
Taraxa is a public ledger platform purpose-built for audit logging of informal transactions with upcoming applications in social Web3. Run a Taraxa node to earn top-block producer rewards, or stake with 20% APY!
The Celo Foundation launched a $100M initiative called DeFi for the People, to make DeFi accessible to all. You can benefit from these rewards by depositing cUSD and other stablecoin pairs into Mobius today.
📈 Yield Alpha
Each week we will provide options to earn yield on ETH, WBTC, stablecoins, and other major tokens.
ETH - Earn 10.67% APY with new Instadapp Lite product for leveraging stETH ~3X
This yield is accrued by borrowing ETH against stETH collateral in Aave, then converting ETH to stETH to gain an increased amount of ETH POS staking rewards.
To participate, go to the Instadapp Lite dApp (ETH) to deposit ETH or stETH.
BTC - Lend WBTC.e on Beta Finance (on Avalanche) at 9% APY
This yield is issued in interest paid by Beta borrowers + BETA tokens.
To participate, see the Beta dApp on Avalanche to lend WBTC.e here.
Be aware this liquidity mining program ends soon on April 22nd.
AVAX - Lend AVAX on Beta Finance (on Avalanche) at 12.04% APY
This yield is issued in interest paid by Beta borrowers + BETA tokens.
To participate, see the Beta dApp on Avalanche to lend AVAX here.
Be aware this liquidity mining program ends soon on April 22nd.
SOL - Lend stSOL with Tulip Protocol on Solana to earn 9.16% APY (from Tulip) + 5.9% APR from the underlying SOL staking rewards in stSOL
This yield is backed by interest paid by borrowers on Tulip as well as the 5.9% APR in staking rewards thanks to the liquid staking derivative stSOL by Lido.
LUNA - LP with LUNA-LunaX by Stader in TerraSwap to earn a net ~28.7% APY
This yield is backed by auto-compounding LUNA staking rewards thanks to LunaX by Stader earning 7.78% APY, trading fees on TerraSwap, and 20.9% APY in SD token rewards.
To participate on Terra, deposit 50% of LUNA into LunaX and then go here to TerraSwap to pair 50/50 LUNA<>LunaX as an LP and passively collect trading fees, staking rewards, and claimable SD tokens, without impermanent loss.
MATIC - stake MATIC with Lido stMATIC at 8.7% APR
The yield is backed by validator rewards using a MATIC liquid staking derivative.
To participate on Polygon, deposit MATIC here on Lido.
ATOM - mint pATOM and stake the pATOMs on Ethereum to earn more pATOMs on pSTAKE at a rate of 12.02% APR
The yield earned is issued and claimable in pATOM and this yield is expected to hold steady for weeks/months unless pSTAKE changes their liquid staking model.
To participate, one must first mint a 1:1 representation of ATOM as pATOM on Ethereum by using the pSTAKE dApp under Deposit
Then, deposit/stake pATOMs to get stkATOMs and earn 12.02% APR
Stablecoins - Earn up to 25% APR with a TerraUSD (UST) LP on Beethoven X on Fantom
This yield is issued in trading fees + UST.
To participate, one must either Wormhole or Axelar UST into the LP listed here and then stake the LP (aka BPT) here.
A step-by-step guide is provided in this week’s degen tutorial.
🪂 Airdrop Alpha
In each DeFi Alpha guide, we update a list of the most obvious DeFi protocols that have yet to announce and/or launch a token.
Arch Finance - a protocol for comprehensive indices that provide access to differentiated sources of market risk.
Arbitrum - one of the leading L2 solutions for Ethereum with live dApps such as Uniswap, SushiSwap, Hop, and more, we expect a token to eventually launch so by depositing assets or transacting, one might earn a future airdrop.
Cosmos Ecosystem : Staking $ATOM and $OSMO usually makes one eligible for airdrops from new apps that launch on Cosmos. Staking guide here in a previous edition of DeFi Alpha.
DeFi Saver - a one-stop dashboard for creating, managing and tracking DeFi positions across Aave, Compound, Maker, Liquity, and Reflexer
Element Finance - stake/lend to earn fixed interest with fixed terms on Ethereum
Edge Protocol - the first money market on Terra, looks like Aave or Compound
Euler Finance - a non-custodial protocol on Ethereum that allows users to lend and borrow almost any crypto asset, just launched but has yet to launch a token.
Francium - leveraged yield farming similar to Alpha Homora but on Solana, one can choose to simply lend single assets or hold leveraged LPs to potentially earn an airdrop here
Hop Protocol - become an LP to enable bridging instantly between Ethereum Mainnet, Polygon, Arbitrum, or Optimsm without waiting for long delays in withdrawals; DeFi Dad has a full-blown video tutorial on how to become a Hop LP and potentially earn a future HOP airdrop.
Katana DEX - Farm/stake the AXS/WETH LP or SLP/WETH LP on this forked AMM on Ronin to earn WRON (wrapped RON), so this is a guaranteed reward but for a token not yet trading
Optimism - one of the leading L2 solutions for Ethereum with live dApps such as Uniswap, Hop, Synthetix and more, we expect a token to eventually launch so by depositing assets or transacting, one might earn a future airdrop
Opyn - one of the OG decentralized options protocols on Ethereum, with major investors that signal a token has to be in their future. Buy/sell puts or call options to earn a possible future airdrop.
Polymarket - one of the strongest players in the DeFi prediction market vertical, bet on an outcome related to crypto, politics, sports and more or add liquidity
Set Protocol - one of the earliest DeFi protocols yet to launch a token for DeFi asset management, popular for TokenSets and known for powering IndexCoop indexes
Socket (formerly Movr) - their bridge aggregator Bungee moves assets between chains, finding the cheapest, fastest route
Terraswap - the 2nd largest AMM on Terra
Volmex - Volmex is a tokenized volatility protocol, similar to the VIX but ETHV
Wormhole - a cross-chain messaging protocol known for bridging between Solana, Terra, Polygon, BSC, Avalanche, Fantom, and Oasis
Yield Protocol - a newer protocol for fixed-term, fixed-rate lending in DeFi, backed by Paradigm, one might earn a future airdrop by lending DAI or USDC
Zapper - participate in Zapper trading, lending, providing liquidity, or yield farming; given the Zapper Quests and NFT Rewards program, it can be surmised that if Zapper ever releases a token, this is one way they might do a retro airdrop
Zerion - same can be said speculated about Zerion; if they ever release a token, they’re likely to reward those who interacted with their smart contracts swapping, lending, providing liquidity, or borrowing.
🧑💻 Defiant Starter Tutorial
Earn an Estimated 50-1700% APY on Stablecoins with Spool
Similar to the wildly popular Yearn vaults, Spool is a new permissionless middleware that allows for building customizable, scalable, and efficient DeFi products. Spool allows anyone to earn yield while leveraging integrated battle-tested DeFi protocols.
A spool is a smart contract that routes deposits into an array of different yield generators in a risk-managed and yield-optimized manner. The difference between traditional vaults and Spool is that spools can be individually set up by users in a permissionless manner. A spool contains an assigned risk tolerance, a chosen risk model, and a subset of selected protocols.
Spool supports the following protocols for creating spools below:
Having just launched Genesis Spools a day ago, the highest base yield for the Genesis Spool USDT Higher Risk is 4.99% APY as of this writing. However, the reason we chose to highlight these new spools other than being a newer DeFi project, is that a liquidity incentive is about to launch, expected to be 3 million SPOOL emitted across the 6 Genesis Spools.
At the current value of SPOOL of $4.26 with 3M SPOOL emitted over the next 3 months, we can estimate yield for these 6 Spools at the current price of SPOOL, could range anywhere from 50% APY (if TVL grew to $100M) to as high as 1700% APY (assuming TVL remains as is at $3M).
Check out the following tutorial on how to get started with a Genesis Spool earning yield with stablecoins!
Step 1: Go to the Spool dApp and connect an Ethereum wallet.
Step 2: Choose a Spool based on preference for which stablecoin, whether “high” or “low” risk and review which underlying protocols will be used. Let’s assume I choose the Genesis Spool USDT Higher Risk below, netting an adjusted APY after performance fees of 4.97%.
Step 3: Click Deposit Now, specify how much USDT, and follow the prompts to Approve USDT and lastly, click Deposit. This will require 2 transaction confirmations.
That’s it! You’re now earning stablecoin yield, along with SPOOL incentivized rewards beginning in the next few days.
Sperax USD is a rapidly growing stablecoin protocol that automates yield-generating strategies. The ecosystem is built on $USDs: the stablecoin that sends passive income to holders.
$USDs stays in your non-custodial wallet while collecting additional $USDs organically through Auto-Yield, targeting 11% APY.
Sperax provides additional ways to earn passive income using $USDs through their dapp, where you can stake to earn the protocol’s native token, $SPA, and other cryptos.
The decentralized protocol runs completely on-chain and is powered by the Arbitrum L2 blockchain. This guarantees the security of Ethereum, but users enjoy 10x+ cheaper gas fees.
Thanks to Sperax USD, any crypto user can harness the power of decentralized finance. It pays to hold $USDs.
🦍 Defiant Degen Tutorial
25% APR on UST using BeethovenX on Fantom
BeethovenX is a DEX on Fantom that’s a fork of Balancer and offers multi-asset pools.
We’re interested in the UST farm that’s currently yielding 25% APR.
This LP pair consists of two wrapped versions of UST, the stablecoin native to the Terra blockchain. While the Wormhole bridge is the most popular, the Axelar network is a newer entrant.
To participate, unless you have native UST to bridge, you’ll need to swap your stablecoins for Wormhole UST, which you can do on Curve.
Let’s get started.
Step 1: Add the Fantom Opera network to MetaMask. Navigate to Chainlist and connect, or add it manually using these parameters.
Step 2: You’ll need some FTM tokens to pay for gas fees. Fortunately, you can get some for free by using this faucet.
Step 3: AnySwap is the preferred bridge for most assets and there’s currently no fee to move assets to Fantom, although you will be charged a 0.1% fee on the return journey. Ensure that your MetaMask wallet is connected to the Ethereum network, enter the asset you wish to transfer and confirm the transaction.
Deposits generally arrive within 10-15 minutes.
Step 4: Connect your wallet to the Fantom network and add liquidity on beets.fi
You’ll be asked to approve spending your assets. Confirm the transactions to receive your Liquidity Provider (LP) tokens.
Step 5: Stake your BPT LP tokens to start earning UST rewards.
This farm is somewhat of a rarity since the yield is paid out in stablecoins. You can claim your accrued Axelar UST at any time.
Note that you will not earn any token rewards if you miss this step.
📰 Elsewhere on The Defiant
Tuesday Tutorial on The Defiant YouTube: This week, Robin explored Stargate Finance, a new omni-chain liquidity protocol. Learn how and subscribe to The Defiant on YouTube!
The information contained in this newsletter is not intended as, and shall not be understood or construed as, financial advice. The authors are not financial advisors and the information contained here is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation. We have done our best to ensure that the information provided is accurate but neither The Defiant nor any of its contributors shall be held liable or responsible for any errors or omissions or for any damage readers may suffer as a result of failing to seek financial advice from a professional.