⍺ DeFi Alpha: 20% Fixed Yield On ETH and BTC Using 88mph + Yield Farming on Metis
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 decentrali...
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, where 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!
- 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 - Fixed rate lending WETH in 88mph on Fantom for a total of ~20% APR
- This yield is issued in WETH lending interest, and then mostly MPH rewards.
- To participate, Deposit WETH (on Fantom) into the 88mph dApp under Earn.
- WBTC - Fixed rate lending WBTC in 88mph on Fantom for a total of ~20% APR
- This yield is issued in WBTC lending interest, and then mostly MPH rewards.
- To participate, Deposit WBTC (on Fantom) into the 88mph dApp under Earn.
- AVAX - On YieldYak, you can earn compounding lending interest with AVAX on Benqi at 10.4% APY
- This yield is issued in AVAX and is auto-compounding thanks to YieldYak
- To participate, Deposit AVAX into the Yield Yak Benqi AVAX single-asset farm here.
- SOL - lend stSOL with Francium on Solana to earn 4.2% APY (from Francium) + 5.9% APR from the underlying SOL staking rewards in stSOL
- This yield is backed by borrowing interest paid by leveraged yield farmers on Francium as well as the 5.9% APR in staking rewards thanks to the liquid staking derivative stSOL by Lido.
- To participate, go to the Francium dApp under Lendand deposit stSOL (by Lido).
- LUNA - LP with LUNA-LunaX in TerraSwap to earn up to 50% APY
- This yield is backed by auto-compounding LUNA staking rewards thanks to LunaX, trading fees on TerraSwap, and SD token rewards by Stader.
- 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 sit back to passively collect rewards.
- The LunaX staking derivative alone is earning 9.86% APY.
- ATOM - mint pATOM and stake the pATOMs on Ethereum to earn more pATOMs on pSTAKE at a rate of 12% 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 7% APR
- Stablecoins - earning a minimum of 33% APR as an LP for the Defrost H2O Curve factory pool on Avalanche
- This yield is issued partially in stablecoins compounding the LP + MELT rewards.
- To participate, Deposit H2O, DAI, USDC, or USDT (on Avalanche) into the Curve LP here and then stake the LP on Defrost Finance’s Farming tab here.
🪂 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.
- 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
- Stader Labs - by depositing LUNA into LunaX (a liquid staking equivalent of LUNA) and pairing LUNA<>LunaX as an LP here on TerraSwap, one can farm SD rewards, the Stader protocol token that’s yet to be generated but is launching any day now, following its upcoming CoinList auction
- Element Finance - stake/lend to earn fixed interest with fixed terms on Ethereum
- 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.
- DeFi Saver - a one-stop dashboard for creating, managing and tracking DeFi positions across Aave, Compound, Maker, Liquity, and Reflexer
- 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
- Hop Protocol - become an LP to enable bridging instantly between Ethereum Mainnet, Polygon, Arbitrum, or Optimism 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.
- 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.
- 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
- 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
How to Earn Fixed Interest with 88mph on Fantom
Opportunity:88mph is a protocol for earning fixed yield rates. It launched back in fall 2020 and they’ve been a long time innovator in DeFi, with ideas around tokenizing yield that are now being adopted by many other protocols. Despite the long term track record as builders launching across Ethereum, Avalanche, Polygon, and Fantom, they have about $75M in TVL. This is a battle-tested protocol and credible team, so I’m delighted to highlight some undiluted yields one can earn by simply lending stablecoins and blue chip tokens and then staking the MPH rewards.
Time to Complete: 5 minutes if paying the recommended HIGH gas price on the FTMScan Gas Tracker.
Estimated Length of Rewards Program:One can set a lending period with fixed interest rates as long as 365 days.
Gas + Protocol Fees:Based on gas prices fluctuating between 200-400 Gwei on Fantom, it could cost as little as $1 or much higher.
Fees:Other than network fees paid for Fantom transactions, be aware an early withdrawal of your deposit is allowed, but requires a 0.5% fee.
Risks: As always, this is not financial advice and you should do your own research. The following are risks I incur when participating in this opportunity.
- Smart contract risk, oracle failure, and governance attacks in 88mph, plus any other associated DeFi protocols like Scream
- Systemic risk in DeFi
- Pegged assets such as stablecoins may de-peg
- First, assuming I have tokens on Fantom in a wallet like MetaMask, I can go to the 88mph dApp under Earn for Fantom to connect my wallet.
- After reviewing the potential tokens I can earn fixed interest with, I choose to deposit my WFTM to earn 2.274% APR + 16.03% in subsidized MPH rewards.
- I specify how much WFTM to deposit and how many days (in this example 30 days but you can lock in for as much as 365 days, which will likely bring the fixed interest rate down).
- I follow the prompts to Approve and then Deposit my WFTM.
- Lastly, I can return to claim my MPH anytime as I earn it, and then stake the MPH for xMPH on the Stake tab (eventually veMPH in the near future) to earn protocol fees.
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🦍 Defiant Degen Tutorial
Bridging to Metis and Yield Farming on Drachma DeFi
Metis is a Layer-2 scaling protocol for Ethereum that utilizes Optimistic Rollups. Natalia Ameline, the mother of Ethereum founder Vitalik Buterin, is a member of the Metis team, which recently released its roadmap for the first half of 2022.
Drachma DeFi is a new stableswap protocol on Metis that will offer “Curve style hyper-efficient, low slippage swaps for both pegged and unpegged assets”, according to the website.
Drachma launched a beta liquidity mining program on Feb 9.
To participate, we will need to provide liquidity to the USDC-USDT pool.
Note that the DRACHMA token has not been launched yet, so you will only be able to claim your rewards when it goes live.
DRACHMA has a total supply of 100M tokens and will be fully community-owned, so participation is the only way to acquire some before the official launch. Tokenomics can be found here.
Let’s get started.
Step 1: Add the Metis Andromeda network to MetaMask. I used Chainlist, a handy tool for connecting to EVM-compatible chains.
Step 2: Head to the Metis Bridge and connect your MetaMask wallet to the Ethereum network. Enter the asset and amount you wish to transfer and confirm the transaction.
Gas fees on Metis are paid in METIS tokens. First-time users who bridge over $2000 worth of ETH, USDC or USDT will be airdropped 0.05 METIS. It’s recommended that you buy some more so that you don’t run out of gas. You can do so on Netswap.
You are now ready to DeFi on Metis.
Step 3: Navigate to Drachma DeFi: https://farm.drachmadefi.io/#/
You’ll need equal amounts of USDC and USDT to provide liquidity.
Step 4: Add liquidity.
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 farm to earn $DRACHMA tokens, which you can claim once the token is launched.
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 the different ways you can maximize stablecoin yield without going “too degen.” 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 are 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.