⍺ DeFi Alpha: Build a Virtual City Based On Your On-Chain Activity Using Phi

Yields: Up to 22% APY on Stablecoins, 4-27% APY on ETH and BTC

DeFi Alpha is a weekly newsletter published for our premium subscribers 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! Before the current bear market took hold, DeFi liquidity had 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 Cosmos and Solana. Any given day, a new DeFi or NFT project is launched.

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 opportunities.

This is DeFi Alpha by The Defiant.

Any information covered in DeFi Alpha should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions. Any mention of a token or protocol should not be considered a recommendation or endorsement.

Together With

DeFi Saver is an all-one management app with unique automation options for top DeFi lending protocols. The app is now available directly within the Compound app for Compound v3 users.

DeFi Alpha Call

The DeFi Alpha call is held every Monday at 2pm ET in Discord.

In case you missed it, check out the recording of this week’s call.

Yield Alpha

Each week we will provide options to earn yield on ETH, WBTC, stablecoins, and other major tokens.

ETH: 27.7% APY with pETH/ETH Curve LP staked in Convex via Concentrator
- This yield is accrued in aCRV + trading fees compounded in the LP.
- To participate, one must Deposit into the pETH/ETH Curve LP here (not stake).
- Then, one must stake/deposit the Curve LP under the ETH-pETH vault under aCRV Vaults on Concentrator.
- Caution: pETH is an ETH derivative minted when a user borrows against their NFT and burned when they decide to repay their loan. pETH has a risk of depegging.
BTC: 4.14% projected vAPR with the Curve HBTC+WBTC LP staked in Convex
- This yield is accrued in CRV, CVX, and trading fees.
- To participate, one must first deposit HBTC and/or WBTC into this Curve factory pool and then stake the LP here in Convex.
MATIC: 9.6% APY with 50/50 MaticX-WMATIC LP on MeshSwap
- The yield is backed by validator rewards using the MaticX liquid staking derivative + MeshSwap trading fees + MESH rewards + SD rewards.
- To participate on Polygon, I use the Stader MaticX dApp to mint MaticX.
- Then, I deposit into the MaticX-WMATIC pool on MeshSwap and stake the LP.
ATOM: 20% APR staking ATOM with Keplr Wallet on Cosmos Hub
- The yield earned is issued in ATOM.
- To participate, one must set up a Keplr Wallet, go to the Cosmos Hub validators on Keplr Dashboard, rank by APR, choose a validator, and click Delegate.
- Then, I specify how many ATOMs and follow the prompts to Delegate.
AVAX: 6.4% APR lending AVAX to the sAVAX/AVAX pool on Platypus via Vector
- This yield is issued in PTP, QI, and AVAX.
- To participate, one must deposit into the AVAX Stake option here on Vector.
- Depending on the pool’s coverage ratio there may be a deposit or withdrawal fee.
SOL: 7.49% APY staking SOL with stSOL by Lido
- This is backed only by Solana staking yield.
To participate, one must deposit SOL here or buy it on a Solana DEX.
FTM: 4.7% APY staking sFTMx liquid staking derivative by Stader
- The yield is issued in FTM rewards, as sFTMX is earning FTM via validator rewards to support Fantom’s PoS network.
- To participate, one must deposit FTM to receive sFTMX here on Stader.
HBAR: 9.7% APY staking with HBARX liquid staking derivative by Stader
- The yield is issued in HBAR rewards, as HBARX is earning validator rewards.
- To participate, one must deposit HBAR to receive HBARX here on Stader.
Stablecoins: 22% APR with the jEUR/sEUR LP staked in Velodrome on Optimism
- This yield is accrued in VELO.
- To participate, one must deposit and stake in this jEUR + sEUR LP.

Please be aware we intentionally do not report the highest yield rates because often, those yields are less sustainable and in some instances, artificially elevated due to high inflation tokens or fewer LPs participating.

Starter Tutorial

Earn Up to 8.6% APR with ETH-frxETH Curve LP Auto-Compounding via Concentrator Compounder Vault

Disclosure: DeFi Dad has been an active member of the Aladdin DAO which created Concentrator products.

Previously, we have covered Concentrator for its novel auto-harvesting vaults, which boost yields by automatically claiming, converting to cvxCRV, and staking cvxCRV to compound yields.

Concentrator vaults have grown to mainly support ETH, BTC, stablecoin, and CRV/cvxCRV-based Curve LPs, including Frax Finance assets such as their stablecoin FRAX and their more recently launched frxETH. frxETH acts as a stablecoin loosely pegged to ETH, so that 1 frxETH always represents 1 ETH.

Another innovation of Frax during this bear market has been the launch of sfrxETH, a ERC-4626 vault designed to accrue the staking yield of the Frax ETH validators. DeFi users can exchange frxETH for sfrxETH by depositing it into the sfrxETH vault, allowing them to earn staking yield on their frxETH. As validators accrue staking yield, an equivalent amount of frxETH is minted and added to the vault, allowing users to redeem their sfrxETH for more frxETH.

Among many necessary steps for sfrxETH to work as a DeFi product, Frax had to launch new Curve pools to initially build liquidity for swapping ETH<>frxETH.

Today, I’ll show how I can take advantage of that need for ETH-frxETH liquidity by being a Curve LP and staking the LP with a Concentrator Compounder Vault, which then earns me a combined 8.6% APR in yield backed by Curve trading fees, FXS, CRV, and CVX rewards.

Before we get started, please be aware of these risks.

Smart contract risk in Frax Finance, Curve, Convex, and Concentrator

Front-end spoof attack on the Concentrator website

Exploits in economic design of any of these DeFi protocols mentioned above

Governance attacks or admin key compromise

Systemic risk in DeFi composability

Pegged assets like frxETH can potentially de-peg

Step 1: First, I go to the Curve LP deposit page for ETH-frxETH, connect my Ethereum mainnet wallet, and deposit ETH, frxETH or a combination of both (1-3 transactions). I’m careful to only Deposit and not Deposit & Stake!

Step 2: Next I go to the Concentrator dApp to stake the Curve LP on the Concentrator Compound vault for afrxETH, connect my wallet, specify depositing 100% of LP tokens, and follow the prompts to Approve & Deposit (2 transactions).

Degen Tutorial

Build a Virtual City Based On Your On-Chain Activity Using Phi

Phi is a Polygon-based ‘social world’ that lets you build on a virtual plot of land using items based on your on-chain activity.

It’s a fun project that aims to encourage people to use various DeFi protocols and “accelerate the overall network effect of the Web3 ecosystem.” You can claim various items (buildings, monuments, vehicles etc.) by completing on-chain quests, which can then used to adorn your land.

These items are NFTs that can be traded on the secondary market.

Phi is currently running quests for popular DeFi protocols including Uniswap, OpenSea, ENS, Curve, Snapshot, Lido and Sudoswap. In addition to the NFTs, you get points for completing each quest and leveling up your land.

It’s free to join and claim the NFTs, but requires an ENS domain and some MATIC for gas fees.

Let’s dive in.

Step 1: Claim Phi Land

https://land.philand.xyz/

Make sure you’re connected to the Polygon network and connect your wallet. Select the ENS domain you wish to use (if you have multiple names) and create your land.

Once the transaction is confirmed, you’ll see an empty 8×8 plot of land.

Step 2: Claim Quest Objects

https://quest.philand.xyz/

After creating your land, connect your wallet to the quest page and click the ‘Check Eligibility’ button. You’ll be presented with a list of all the items you can claim.

Claim all the NFTs. Note that each claim is a separate transaction requiring a small amount of MATIC for gas fees.

Step 3: Build Your City

After claiming the objects, head back to the land page.

Before the objects can be placed on the land, they have to be deposited. Click on the wallet icon at the bottom of the page.

Deposit the objects you wish to use and start decorating.

Some new quests are expected soon, so keep an eye out for them.

Happy Holidays!

🪂Airdrop Alpha

In each DeFi Alpha guide, we update a list of DeFi protocols that have yet to announce and/or launch a token.

Blur Airdrop 3

Blur has announced that its third airdrop round will be geared towards users to place bids on the marketplace. You can find our step-by-step tutorial from last month here.

ACX Airdrop

Cross-chain bridge Across Protocol has launched its ACX token.

If you followed our guide and participated in the referral and bridging program, you can claim your tokens here.

Arbitrum Odyssey

Layer-2 rollup Arbitrum kicked off a months-long program on June 21.

Participants will be able to claim NFTs based on completing various tasks.

Week 1 was Bridge Week and we walked you through it in a previous issue of DeFi Alpha.

In a previous Degen Tutorial, we covered a series of on-chain quests.

We’ll be watching for the Odyssey to resume, now that Nitro is live.

Optimism Airdrop

Congratulations if you followed our guide betting on a hunch that Optimism would release a token!

In a previous DeFi Alpha, we covered a series of on-chain quests that could make you eligible for the next round of $OP airdrops.

$OP is Live! Claim guide here.

Arch Finance – a protocol for comprehensive indices that provide access to differentiated sources of market risk.

Aztec – an open source L2 bringing scalability and privacy to Ethereum, with zkSNARK proofs, having launched a private DeFi yield aggregator zk.money.

DeFi Saver – a one-stop dashboard for creating, managing and tracking DeFi positions across Aave, Compound, Maker, Liquity, and Reflexer

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

Jupiter – The leading DEX aggregator by trading volume on Solana

Lens Protocol – A decentralized composable social graph, underpinning an emerging landscape of Web3 social media dApps including Lenster, Lenstube, and Orb

LI.FI – A cross-chain bridge and DEX aggregator protocol

Liquality – A cross-chain, non-custodial browser extension wallet, similar to MetaMask but with more integrations for swapping cross-chain.

Magic Eden – The leading NFT marketplace by trading volume on Solana

Nested – a crypto social trading platform built on Ethereum and other chains

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

Sense Protocol – A decentralized fixed-income protocol on Ethereum, allowing users to manage risk through fixed rates and future yield trading on existing yield bearing-assets

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

StarkNet mainnet is live! Bridge and swap some tokens for a potential airdrop. Guide here.

SudoSwap has released details about its SUDO token and airdrop.If you followed our guide from August 12 and created some trading pools, you should be eligible!

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

ZigZag – a DEX on zkSync that’s announced an upcoming airdrop.

zkSync is a Layer 2 scaling solution for Ethereum that uses zero-knowledge proofs to enable scalable low-cost payments. Bridge some assets and do some swaps for a potential airdrop. Guide here.

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.