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DeFi Alpha: Trade Floor Prices Of Popular NFTs Using nftperp on Arbitrum

  • Yields: Up to 17% APY on Stablecoins, 10-24% APY on ETH and BTC
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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.

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Two years ago, DeFi investors could easily name every yield farm without much effort. It was a simpler time, where only a handful of protocols presented limited options to trade, lend, borrow, stake, and provide liquidity.

But times have changed! From 2019 through the end of 2021, DeFi TVL grew a staggering 250X, and although DeFi liquidity contracted in 2022, we see this sector gearing up to expand again in 2023 and beyond.

In order to keep up with the latest and greatest DeFi yields, we bring you this weekly guide.

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.

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: 24.6% 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 the Curve LP under the ETH-pETH vault under aCRV Vaults on Concentrator.
  • BTC: 9.73% projected vAPR with the Curve multiBTC​+sbtc2Crv LP staked in Convex
  • MATIC: 14.6% 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, one may use the Stader MaticX dApp to mint MaticX.
    • One can deposit into the MaticX-WMATIC pool on MeshSwap and stake the LP.
  • ATOM: 20.6% 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.
  • BNB: 22.39% APY with 50/50 BNB/BNBx LP staked on ApeSwap
    • This yield is issued in SD, BNB staking yield (thanks to BNBx), and trading fees.
    • To participate on BSC, one may deposit BNB for BNBx here on Stader.
    • Alternatively, one can zap BNB into the BNB/BNBx LP here on ApeSwap. Then, one can follow the prompts to stake the LP tokens under Jungle Farms.
  • AVAX: 7.28% APY staking AVAX with ankrAVAX by Ankr
    • This yield is issued in AVAX.
    • To participate, one must deposit AVAX for ankrAVAX here on Ankr.
  • SOL: 7.57% 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 for sFTMX here on Stader.
  • Stablecoins: 16.8% APR with the USDC/DOLA LP staked in Velodrome on Optimism
    • This yield is accrued in VELO.
    • To participate, one must deposit and stake in this USDC + DOLA LP.

Please be aware we do not always report the highest yield rates because some high yields may be less sustainable due to high inflation token rewards or fewer LPs participating.

Starter Tutorial

How to Privately Seed a New Ethereum Wallet with Aztec’s zk.money

One of the frontiers of DeFi yet to be fully realized is privacy. Private DeFi is only in its infancy, accessible through simpler use cases of sending and receiving payments on earlier blockchains like Monero and Zcash.

When it comes to the world of DeFi use cases, there are few nascent options: one being Secret Network built on Cosmos, with just over $6B TVL and a modest $7.3M in value relayed via IBC the last 30 days, which we will look to cover in future tutorials.

The second option is built on the Aztec Network, the first private ZK-rollup built on Ethereum. This groundbreaking tech enables decentralized applications to scale with privacy while inheriting the security of the Ethereum network.

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As of today, Aztec is the only zero-knowledge rollup built with a privacy-first architecture from the ground up, meaning users can access popular DeFi apps on Ethereum L1 such as Aave, Euler, Curve, Lido, and Yearn–but completely privately.

By proving Aztec transaction validity through zero-knowledge proofs on Ethereum, Aztec reduces transaction costs by up to 100x.

We’ve previously covered how to privately access these DeFi dApps mentioned above, using the Earn option on zk.money, powered by Aztec Connect, a VPN-like privacy tool for DeFi.

Meanwhile, their first product, a private transfer protocol built on Aztec, has grown exponentially with users, while being an estimated 96% cheaper than competing private transfer protocols.

Today, I’ll cover how one can use the private transfer product on zk.money to seed a new Ethereum wallet with ETH to transact.

This is a common need users run into: creating a new wallet without wanting to leave an easily verifiable connection between every wallet on-chain. Privacy is a right. Full stop. And Aztec / zk.money can help us protect ourselves as early DeFi users.

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

  • Smart contract risk in zk.money smart contracts

  • Front-end spoof attack on the zk.money website

  • zk.money is still an experimental tool and Aztec cautions transactions of more than 5 ETH

  • It’s worth noting this is even more experimental than most DeFi we cover

  • Admin key compromise

  • Systemic risk in DeFi composability

Step 1: First, let’s assume I created a new Ethereum wallet address on L1 and I need to deposit ETH to be able to transact and pay fees. However, I don’t want to send ETH from an existing wallet and have an on-chain transaction linking the 2 wallets. I can use Aztec’s zk.money app to send a private ETH transfer.

Step 2: The wallet from which I will send ETH will need to create an Aztec Account by going to zk.money -> under Access. I click Retrieve Aztec Address with my Ethereum Mainnet wallet (ie MetaMask) and sign a gasless transaction (a key generation transaction) to verify it’s my wallet, and a second to prove it’s my signature.

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Step 3: I proceed to a third gasless transaction after clicking Retrieve Spending Key. Once confirmed, I am prompted to Copy to Clipboard some information that can be used to recover my account in the future (but it’s not anything sensitive like a seed phrase and in my case, I just click Copy and don’t save the information, because it’s NOT necessary).

Then, I click Next Step.

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Step 4: Similar to an ENS, I can pick an “alias” and it costs me nothing extra. This will be handy for sending cheap, fast transactions on the Aztec zkRollup if I should send transfers to this Aztec wallet address in the future. I also select the Default speed or Fastest speed. I normally choose Default to spend less on gas depositing ETH into my new Aztec L2 account.

Because I’m only seeding a new wallet after this step, I might deposit as little as 0.01 ETH or less. I am prompted to confirm a transaction in MetaMask and pay a small bit of gas (ie $1 of ETH) and then wait for the transaction to confirm, and wait further until my ETH arrives in my new Aztec account (however long it estimates on-screen, normally 15 mins – 2 hrs).

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Step 5: The final step is once my ETH arrives in my Aztec L2 account, I’ll see zkETH available here on the Wallet tab of zk.money meaning I now have “shielded ETH” I can privately transact with. I now have 2 options, the first of which I’ll just describe but the second option that is my preference.

  • I can click Send and and use the Send To L2 option to send a completely private transfer to another Aztec address (note Aztec addresses are different hexadecimal addresses than the Ethereum L1 address controlling it so don’t ever copy/paste an L1 address into this option). I can follow the prompts to Send this L2 transaction but the end result is my ETH arrives in another Aztec L2 address and not on L1 where I want it!

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  • Instead, having clicked Send next to my zkETH in the Wallet tab, I’ll use the left option reading Withdraw To L1 and paste in any L1 wallet address, in this case the new separate wallet address on Ethereum Mainnet I originally wanted to seed with new ETH. I’ll choose Default speed to save on gas and leverage the greater privacy of a larger group of payments.

  • I click Next and then next screen Confirm Transaction, followed by signing a transaction which includes a small fee in ETH and wait for my 0.01 ETH to arrive back on Ethereum L1 in my other wallet address!

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Degen Tutorial

Trade Floor Prices Of Popular NFTs Using nftperp on Arbitrum

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As its name suggests, nftperp is a perpetuals trading platform on Arbitrum that allows users to speculate on NFT floor prices, facilitating some interesting use cases:

  • Smaller traders who are priced out of collections like CryptoPunks and Bored Apes can trade with as little as $5.

  • NFT holders can hedge their jpegs if they expect volatility (around important announcements, for example)

You can take a long or short position on supported collections with up to 5x leverage. Currently, nftperp supports the Punks, BAYC, MAYC, Azuki and Milady collections.

The project raised $1.7M in November 2022 and recently announced a trading rewards program.

nftperp uses a virtual automated market maker (vAMM) model whose key features are:

  • There are no liquidity providers or orderbook

  • Zero-sum game: One trader’s gain is another’s loss

The platform has been running in closed beta for a while but is now open to the public.

Let’s dive in.

Step 1: Bridge ETH to Arbitrum (if needed)

Since nftperp operates on Arbitrum, a Layer 2 network, you’ll need to bridge some ETH.

Head to bungee.exchange to find the most cost-efficient bridge to use.

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Step 2: Open a Long or Short position on nftperp

https://beta.nftperp.xyz/trade/

Clicking the ‘Pro’ button on the top of the screen enables the chart display.

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Choose the collection you wish to trade, enter the amount and adjust your leverage. Your liquidation price will be displayed under the ‘Approve’ button.

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Approve your aETH and confirm the transaction once you are satisfied with the parameters.

That’s it! Traders will earn monthly vNFTP rewards.

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.

  • 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.

  • 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.