⍺ DeFi Alpha: Triple-Digit Yields With Starlay & Arrakis
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.
Motivation
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 up to 150% APR lending and looping ETH on Starlay Finance
This yield comes from interest paid by borrowers + LAY tokens.
Starlay is on the Astar Network
These yields are estimated as the LAY token is not yet trading with an IDO expected in April.
A step-by-step guide is provided in this week’s degen tutorial.
BTC - Earn up to 69% APR lending and looping WBTC on Starlay Finance
This yield comes from interest paid by borrowers + LAY tokens.
Stablecoins - Conservative: Earn up to 30% APR with USDC/MAI LP on Arrakis
This yield is paid in MATIC tokens.
Arrakis is a Uniswap V3 Optimizer on Polygon.
A step-by-step guide is provided in this week’s starter tutorial.
Stablecoins - Degen: 142% APR lending and looping DAI on Starlay Finance
🪂 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
Optimizing Uniswap V3 Liquidity Using Arrakis on Polygon
Arrakis is a liquidity manager built on top of Uniswap V3 on Polygon. It allows users to take advantage of automated concentrated liquidity strategies.
On Apr. 6, Polygon announced $15M in MATIC incentives for Arrakis vaults, with the goal of driving more liquidity to Uniswap V3.
Yields are currently attractive on several pairs:
WETH-USDC (101% APR)
WBTC-WETH (56% APR)
USDC-MAI (30% APR)
MAI(miMATIC) is an overcollateralized stablecoin issued by QiDAO. It can be borrowed interest-free against pledged crypto assets.
In this tutorial, we’re going to provide liquidity to the USDC-MAI stablecoin vault to earn 30% APR in MATIC tokens.
Let’s get started by bridging our assets to Polygon.
Step 1: Connect your Metamask wallet to the Polygon network. If you’re using Polygon for the first time, check out this tutorial on how to do this.
Step 2: Bridge USDC. We’re going to use the official Polygon bridge, though there are plenty of other options like Multichain, Hop Protocol, Synapse, Celer etc.
Gas fees on Polygon are paid in its native MATIC token. First-time users can get some from this faucet. It is recommended that you obtain some more MATIC to avoid running out of gas at an inopportune moment. You can do so on any of the major DEXs like Sushi.
Step 3: Add liquidity on Arrakis.
https://beta.arrakis.finance/#/pools/0x4Fe4d754d1B2feaAd266332CfE3d3fcaa632c953/add
You will need to swap some of your USDC for miMATIC in order to add liquidity. The pool ratios fluctuate based on the liquidity range, so check the pool first before swapping.
Once you determine the required amounts of USDC and miMATIC (MAI), swap your USDC for MAI. Check Uniswap, Quickswap and Sushi for the best pricing and proceed with the swap.
Approve your tokens, and hit the ‘Deposit and Stake’ button.
That’s it. You’re now earning WMATIC (Wrapped MATIC) rewards that you can claim at any time.
🦍 Defiant Degen Tutorial
170% APR on ETH and up to 140% APR on Stablecoins using Starlay Finance on Astar Network.
Starlay Finance is a lending protocol on the Astar Network, an EVM-compatible blockchain that calls itself “the Polkadot-native dApp hub supporting Ethereum, WebAssembly, dApp Staking, and Layer2 solutions”
Starlay is currently the largest dapp on Astar with $426M in TVL. Its $LAY token isn’t trading yet but will be available to claim after an IDO planned for later this month.
Starlay’s MAKAI feature allows users to automatically fold (deposit, borrow and re-deposit) their assets in order to boost yields, and this is what we’re interested in.
While the yields look extremely promising, bear in mind that they are projections based on the future price of the LAY token once it starts trading.
Step 1: Add the Astar network to MetaMask using the following parameters.
Step 2: Head to the Celer Network Bridge and connect your MetaMask wallet to the Ethereum network. You can bridge USDT and USDC separately, or send either and do the swap on ArthSwap. Currently, supported assets are wETH, wBTC, USDT and USDC.
Gas fees on the Astar Network are paid in ASTR and you’ll receive 0.005 ASTR when you bridge assets for the first time. If you need more, ArthSwap has published a guide to using the ASTR Faucet.
Step 3: Navigate to Starlay Finance and deposit your asset of choice.
https://starlay.finance/app/makai
Leverage can be adjusted based on your risk tolerance. As the app suggests, please review the documentation before depositing assets!
Approve your tokens and proceed with your deposit.
You’re now farming LAY tokens, which you can claim once it becomes tradeable.
Happy farming!
📰 Elsewhere on The Defiant
Tuesday Tutorial on The Defiant YouTube: This week, Robin looked at 0xSplits, an open-source protocol for efficiently splitting on-chain income.
Whenever a Split receives funds, each recipient gets their share. 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.