⍺ DeFi Alpha: Ultimate Guide To Optimism + Boosted Beefy 4pool Vault
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:
Nexo: With Nexo, you can borrow against your crypto at rates starting from 0% APR. Borrow from $50 to $2M in cash or stablecoins and choose one or multiple assets to secure your credit. Get started now!
Hashflow, the first to provide bridgeless cross-chain swaps, lets you trade seamlessly across chains with guaranteed execution, MEV-resistance and the lowest gas fees in DeFi. Try it now!
📈 Yield Alpha
Each week we will provide options to earn yield on ETH, WBTC, stablecoins, and other major tokens.
ETH - Earn 8.51% net APR with Instadapp Lite’s ETH vault 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 on Aurigami money market on Aurora (Near) for 6.91% APY
This yield is issued in WBTC interest paid by borrowers + WNEAR and PLY rewards.
To participate, deposit into the WBTC pool.
For first timers on Aurora (an EVM-compatible L2 on Near), use this bridge.
Stablecoins - Earn up to 23.5% APR with Beefy Finance’s boosted 4pool (UST/FRAX/USDT/USDC) vault on Fantom
This is an auto-compounding vault that earns trading fees + ORKAN rewards.
A step-by-step guide is provided in this week’s Degen tutorial.
AVAX - Lend AVAX on Aave using Yield Yak for leveraged lending at 9.4% APY
This yield is issued in AVAX, paid by borrowers on Aave.
To participate, check out this page on YieldYak.
SOL - Lend stSOL with Francium farmers on Solana to earn 19.77% APY
This yield is backed by interest paid by borrowers on Francium + 4.92% APY from staking rewards thanks to Lido’s stSOL.
To participate, check out the Lending tab on Francium under stSOL.
LUNA - LP with LUNA-LunaX by Stader in TerraSwap to earn a net ~21% APY
This yield is backed by auto-compounding LUNA staking rewards thanks to LunaX by Stader earning 7.45% APY, trading fees on TerraSwap, and 17.3% 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 Claystack’s csMATIC at 10% APR
The yield is backed by validator rewards using a MATIC liquid staking derivative.
To participate on Polygon, check out the Claystack dApp.
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
FTM - stake with the first FTM liquid staking derivative by Stader, earning 13.5% APY
The yield is issued in FTM rewards, as sFTMX is earning FTM via validator rewards to support Fantom’s PoS network.
To participate, deposit FTM to receive sFTMX here on Stader.
Caution: This is in beta with a recommended limit of 1000 FTM / staker.
HBAR - stake with the first HBAR liquid staking derivative by Stader, earning 59.1% APY
The yield is issued in HBAR rewards, as HBARX is earning validator rewards.
To participate, deposit HBAR to receive HBARX here on Stader.
Caution: This is in beta and withdrawals will not be possible until July 2022 or later.
🪂 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. A token may be imminent, according to this tweet.
Concentrator - an app for boosting Curve LP yields by harvesting and auto-compounding rewards earned via Convex
DeFi Saver - a one-stop dashboard for creating, managing and tracking DeFi positions across Aave, Compound, Maker, Liquity, and Reflexer
Element Finance - Congrats if you tried Element! They just announced ELFI tokens to claim here.
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. And they just hinted a token’s dropping!
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
Jupiter - The leading DEX aggregator by trading volume on Solana
LI.FI - A cross-chain bridge and DEX aggregator protocol
Magic Eden - The leading NFT marketplace by trading volume on Solana
Nested - a crypto social trading platform built on Ethereum and other chains
Optimism - Congrats if you followed our guide betting on a hunch that Optimism would release a token! On Apr 26th, they announced their OP token coming in May with the 1st of 4 retroactive airdrops. Learn more here.
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
Polynomial - A newer DeFi derivatives vault creator, built on Optimism
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 - One of the most popular AMMs 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
The Ultimate Yield Farming Guide to Earning $OP in the Next Optimism Airdrop
This week, Optimism announced the Optimism Collective, including an OP token yet to be generated, which will be rewarded to early users of Optimism (in May) as well as others who meet thoughtful criteria for building a “healthy ecosystem.”
250k addresses are eligible for this first airdrop of 5% of the OP supply. There will be another 3 airdrops to distribute another 14% of the OP supply.
Based on what we’ve seen among newer L1 ecosystems incentivizing new liquidity, it’s abundantly clear that the Optimism Collective will likely reward those who transact and use applications built on Optimism in the coming months.
The following guide will highlight countless ways to yield farm on Optimism while hopefully qualifying for OP tokens in future airdrops!
Step 1: First, I would go to DeFiLlama and check out the top dApps under Optimism.
Source: DeFiLlama.com
Step 2: Then, I can look for applications depending on the assets I hold and the kind of exposure I want.
Step 3: So let’s assume I hold stablecoins! I can potentially earn with single-asset deposits of stablecoins into these Optimism dApps:
Aave v3 (Optimism): Lend and earn up to 3.37% APY with USDT
Lyra AMM (Security Module): Earn 8.17% APY with USDC backstopping Lyra options AMM for shortfall events. Caution: I am risking my principal if there were a shortfall event.
Curve 3pool (Optimism): Earn up to 2.67% APR depositing USDC, DAI, and/or USDT into the 3pool LP
Stargate USDC (Optimism): Deposit USDC here and then stake the LPT here to earn 2.86% APY
Step 4: If I prefer to hold liquidity provisions (LPs), I have 3 easy options for like-asset LPs:
Curve 3pool (Optimism): As noted above, I can earn up to 2.67% APR with USDC, DAI, or USDT
Uniswap v3 (Optimism): I can search among the top LPs in Uniswap v3 on Optimism for stablecoin-stablecoin pairings like USDC/DAI or USDC/USDT
Hop LP (Optimism): With Hop protocol, I can become an LP for those bridging assets between Ethereum, Optimism, and other chains with ETH, USDC, USDT, DAI, or MATIC. For example, earn up to 2.99% APY in bridging fees as an ETH LP, and also possibly qualify for an imminent HOP token airdrop.
Step 5: If I prefer to hold LPs with potentially higher trade volume while exposed to less correlated assets, I have 3 options below:
Uniswap v3 (Optimism): I can choose among the top trade volume pools based on which tokens I prefer to hold, such as ETH/WBTC (which tend to follow one another and experience less impermanent loss) or maybe a pairing like ETH/DAI
ZipSwap AMM: I can earn with trading fees and subsidized ZIP rewards netting 10% APR with ETH/WBTC or up to 30% APR with ETH/USDC or ETH/DAI LPs
Synthetix SNX Staking: If I hold SNX already, I can stake SNX to earn 2.4% APR (or higher based on the last few weeks of performance) but I would caution that based on how network debt works within Synthetix synths, it’s important I understand the debt I can accrue if I don’t hedge my position. Here’s a helpful guide on SNX staking.
🦍 Defiant Degen Tutorial
Earn up to 23.5% APR with Beefy Finance’s boosted 4pool (UST/FRAX/USDT/USDC) vault on Fantom
Beefy Finance is a yield aggregator that’s been around since late 2020, an eternity in DeFi terms. Originally launched on Binance Smart Chain, the project has kept up with the multi-chain expansion of DeFi and now operates on 14 chains.
Orkan is a meta-governance protocol that aims to exert governance power over the major DeFi protocols on Fantom. For those familiar with the Curve Wars, similar scenarios are playing out on the various L1s and Orkan can be compared to Redacted Cartel on Ethereum. By accumulating the governance tokens of Fantom ecosystem projects through bond issuance, Orkan is able to influence their token emissions.
4pool is the Curve liquidity pool championed by Terra and contains UST, FRAX, USDC and USDT.
We’re interested in Beefy’s Orkan-boosted 4pool vault that went live yesterday and is currently yielding 23.5% APR. Farmed CRV is auto-compounded into more 4pool LP tokens and you also earn ORKAN tokens.
Let’s begin!
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: Multichain 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: Add liquidity to 4pool on Curve.
https://ftm.curve.fi/factory/84/deposit
You can deposit any of the 4 stablecoins in any proportion.
You’ll be asked to approve spending your assets. Confirm the transactions to receive your Liquidity Provider (LP) tokens.
Step 5: Stake your LP tokens in the Beefy Vault.
https://app.beefy.com/#/fantom/vault/curve-ftm-f-4pool
Beefy charges a 4.5% performance fee on this vault, with no deposit or withdrawal fees.
That’s it! You’re LP position will be auto-compounded and you can claim your ORKAN rewards at any time.
Note that the boost program ends in two weeks.
📰 Elsewhere on The Defiant
Tuesday Tutorial on The Defiant YouTube: This week, Robin showed you how to use the DeBank portfolio tracker to do some whale watching.
Learn how and subscribe to The Defiant on YouTube!
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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.