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🧑🏫 Tuesday Tutorials: How to Farm Aave Token Rewards & Use Solana's Raydium
Hello Defiers, this week we’re doing a dive into Solana just as the token outperforms, with one of our tutorials and an ecosystem map today, while our Defiant Weekly video will put the SOL team on the stand later this week.
In DeFi news,
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🙌 Together with:
Kraken, consistently rated the best and most secure cryptocurrency exchange, which can get you from fiat to DeFi
Aave, an open-source and non-custodial liquidity protocol where users can earn interest on deposits and borrow assets.
The DeFi Pulse Index, a capitalization-weighted index that tracks the performance of selected DeFi assets across the market.
We will be hosting a weekly tutorial on the most compelling opportunities to consider yield farming, written by our friend DeFi Dad, an advisor to the Defiant and the Chief DeFi Officer of Zapper. The goal is to expose more Defiant readers to new DeFi applications and their associated liquidity mining programs.
Today, I’ll walk you through how lenders and borrowers can earn a portion of the allocated Aave rewards through July 15, 2021 since AIP-16 is now implemented.
Borrowers and lenders are rewarded pro-rata in stkAAVE (staked AAVE) from a pool of 2,200 stkAAVE per day.
stkAAVE already serves as a backstop and pseudo-insurance fund the Aave Safety Module in case of an economic shortfall event (ie exploit). Thanks to this established mechanism, it requires a 10-day cooldown period before one can withdraw AAVE from stkAAVE, which should prevent mercenary yield farmers from earning stkAAVE just to dump the token.
Borrowers and lenders will be rewarded every block with stkAAVE in these money markets:
DAI 50% lenders / 50% borrowers
USDC 50% lenders / 50% borrowers
USDT 50% lenders / 50% borrowers
GUSD 50% lenders / 50% borrowers
WBTC 95% lenders / 5% borrowers
ETH – 95% lenders / 5% borrowers
Opportunities: To optimize for lending and borrowing without going into some more advanced stablecoin leverage positions with Instadapp or DeFi Saver, here’s the estimated APYs to earn today as a lender and borrower in these 6 Aave markets. My goal is to optimize what stkAAVE I can earn on top of the lending interest I would normally earn in Aave. I might even borrow an asset just because the APR earned in stkAAVE could be greater than the borrowing rate I’m paying. These rates constantly change based on liquidity, utilization, and stkAAVE price.
Time to Complete: 10 mins if paying the recommended FAST gas price on gasnow.org
Gas + Protocol Fees: Based on the FAST gas price on gasnow.org currently between 40-65 Gwei, I would estimate paying the following gas fees.
Approve to deposit = $5
Deposit asset = $20-$25
Borrowing asset = $20-$30
Risks: As always, this is not financial advice and you should do your own research.
Solana has emerged as one of the handful of smart contracts platforms competing to become a base layer for DeFi applications, with some of its projects gaining traction as its SOL token climbs to the top 15 by market capitalization.
Solana, created in 2017, incorporates a so-called Proof-of-History timing mechanism that facilitates its Proof-of-Stake protocol structure, which allows it to process more than 50,000 transactions per second, but also requires highly specialized hardware. There are currently about 770 Solana network validators, compared with about 8,000 Ethereum nodes.
The network is heavily backed by Sam Bankman Fried’s Alameda Research and FTX, with investments in ecosystem projects including Oxygen and Step Finance, while FTX directly founded Serum, one of Solana’s main DEXs.
This overview looks at the main DeFi dapps on Solana and compared them with Ethereum and BSC applications, covering:
TLDR Solana, the Layer 1 blockchain which touts 50K transactions a second capabilities, weathered last week’s crypto sell-off better than most.
40% GAINS The chain’s SOL token is up 42% on the week beating out a rebounding Ether, up 10%, as well as sputtering Cardano, Tron, and Polkadot networks, down 5%, 20%, and 12% respectively at the time of writing.
DRIVERS SOL gains may be driven by an increasing number of traders staking the token, which reduces supply. DeFi users prices out of Ethereum may also be turning to Solana’s dapps.
TLDR Basis Cash V2 is launching with the aim of “redesign[ing] from the ground up after a deep analysis of the shortcomings of V1.” The upgrade includes dynamic liquidity incentives instead of the static liquidity rewards from V1, consistent staking rewards to incentivize holders of the Basis Shares (BAS) governance token, and utility for the Basis Bonds (BAB) token beyond just speculating that BAC will return to peg.
TLDR Another week, another batch of celebrities entering the NFT space. This time it’s hip-hop icon Eminem and daytime talk show host Ellen DeGeneres jumping in.
THE DROPS On Sunday, Eminem’s first NFT collection, “Shady Con,” dropped on Nifty Gateway. All-in-all, Eminem’s NFT drop garnered close to $2M in sales. DeGeneres dropped her NFT collection Monday on Bitski after monologuing about not understanding NFTs on her show. At time of writing, only 38 of the open editions and one of the 10-editions has sold, bringing DeGeneres’ total current NFT sales to just over $16k.
✊ Head to THEDEFIANT.IO for more DeFi news 📰
🧑💻 ✍️ Stories in this newsletter were written by Dan Kahan, Owen Fernau, Andras Beak, and DeFiDad, and edited by Camila Russo. Videos were produced by Robin Schmidt and Alp Gasimov. Podcast was led by Camila, edited by Alp.
The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access, while free signups get only part of the content. Click here to pay with DAI (for $100/yr) or sub with fiat by clicking on the button above ($15/mo, $150/yr).