Face risks squarely and manage them correctly.
Written by: The DeFi Investor
Compilation: Azuma
DeFi has ushered in a good season of yield farming (yield farming).
If you are looking for high-yield opportunities in Stablecoin and mainstream assets, please don’t miss this thread. I will share some good DeFi farming solutions next.
One thing that needs to be specially stated is that it is impossible to completely avoid risks in yield farming in the DeFi world. Smart contract loopholes, rug pulls, Impermanent Loss... these potential risks will always exist. What you should do is to face up to the risks and manage them correctly - diversify your funds and don't put all your eggs in one basket.
1. Convex Finance, pETH - ETH pool
pETH is an ETH derivative asset issued by JPEG'd Protocol. Users can mortgage their NFT and lend pETH on the JPEG'd Protocol, thereby releasing the Liquidity of their NFT value.
Currently, if you deposit liquid funds in the pETH- ETH pool and pledge the corresponding LPs tokens on Convex Finance, you can get a 28% APY reward.
Since the price of pETH is anchored to ETH, the pool basically has no risk of Impermanent Loss.
The main risk of this pool is that since the value of pETH is backed by the NFT pledged by users, when the price of NFT used as collateral collapses on a large scale, JPEG'd Protocol will have bad debts if it fails to liquidate effectively. The odds are not high, but if that happens, pETH could break out of the peg.
2. Vela, VLP
Trading volume on decentralized Derivatives exchange Vela has exceeded all expectations since it went live last month.
VLP is a Liquidity proof token on Vela that can be minted using USDC. VLP minters will be rewarded based on the transaction volume of Vela, the current staking APY is greater than 120%, including 60% platform fee income and 10% funding rate income.
It should be noted that since Vela’s operating mechanism is essentially matching traders and Liquidity Provider(VLP minters) to bet against each other, if traders always win, VLP stakers will suffer losses. However, as long as the transaction volume of the platform remains high, VLP will be a good opportunity to earn USDC interest.
Given that the Vela team has already previewed the next series of actions (trading competition, beta AirDrop, official launch, etc.), the transaction volume of the platform is expected to continue to grow.
3. StakeDAO, frxETH
This is another high-yielding opportunity for ETH , with an annualized yield of about 22%.
frxETH is a Liquidity pledged derivative token launched by Frax Finance. Its income mainly comes from the CRV incentives that Frax Finance obtained in the Curve Liquidity pool by using the huge amount of veCRV voting rights in its hands.
If you deposit frxETH into Stake DAO, the protocol will deposit it into the Curve gauge, and further increase the incentive by locking CRV in the CRV Liquid Locker.
According to DeFiLlama, the pool has averaged an APY of 15% over the past 30 days.
4. Velodrome, LUSD - MAI pool
The farce of the past few days has proved one thing, that is, we need truly decentralized Stablecoin, rather than relying on centralized Stablecoin such as USDC. Both LUSD and MAI belong to this category, and LUSD can only be generated by staking ETH .
Currently, the strategy is yielding 17.5%, compared to an average APY of 14% over the past seven days. Not as high as the previous few, but at least LUSD and MAI seem to be "stable" as Stablecoin.
Here's my recent roundup of high-yielding opportunities that have proven relatively safe over time.
