DeFi Alpha: Earn 50% APR On Tricrypto With Convex On Arbitrum

Featured Yields: Up to 63% APY on Stablecoins, 21% APY on ETH

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. It is meant to be highly actionable and shareable.

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.

Latest Developments

Before we get started, here are the top headline-grabbing events from this week that every savvy DeFi investor ought to keep on their radar.

DeFi Alpha Call

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

If 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: 20.4% 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: 4.49% APR 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 into this Curve pool and then stake the LP here in Convex.
MATIC: 8.27% net APY with 50/50 MaticX-WMATIC LP on QuickSwap
- The yield is backed by validator rewards using the MaticX LSD (5.76% APY) + QuickSwap trading fees + QUICK rewards.
- To participate on Polygon, one may use the Stader MaticX dApp to mint MaticX.
- Then, deposit into the MaticX-WMATIC pool on QuickSwap and stake the LP under Gamma Farms.
ATOM: 23% 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: 26% APY with 50/50 BNB/BNBx Ellipsis LP in a Beefy Finance vault
- This yield is issued in SD, BNB staking yield (thanks to BNBx), and trading fees.
- On BSC, one can deposit BNB for BNBx here on Stader.
- Then, one can deposit BNB and/or BNBx here on Ellipsis and stake the BNB/BNBx Ellipsis LP here on Beefy Finance.
AVAX: 7.24% 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: 6.8% APY staking SOL with stSOL by Lido
- This is backed by SOL 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: 63% APR with the DOLA/USDC LP staked in Ramses on Arbitrum
- This yield is accrued in RAM tokens.
- To participate, one must deposit and stake in this DOLA + USDC 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 Buy ETH at a 12% Discount and Other Tokens on Pendle Finance

At times, I feel like I have pushed harder than most on the narrative that DeFi fixed income can become an enormous sector.

However, as of today, I’ve been nothing but tragically wrong about this. A common protocol design in the DeFi fixed income sector used by APWine, 88mph, Sense Finance, Element, and Pendle is known as a stripping protocol, where you tokenize the principal vs yield of a yield-bearing asset. The strategies and concepts behind these stripping protocols have always been promising for sophisticated DeFi degens but also a bit complex.

Until now! I believe there is a promising new product design deployed by the Pendle Finance team during the depths of this bear market. Because protocols like Pendle remove the yield from the principal of an asset, it allows the principal asset to be purchased at a discount, in the form of PT (Principal Token) under the Discounts tab on Pendle Finance.

Pendle now offers this simplified offering of longing “discounted tokens” for different maturity dates, which is really just reframing the idea of earning a fixed interest rate to something that’s more universally relatable–buying tokens at a lower price than what’s in the market!

It’s stupidly easy to use: just pick out which asset(s) to go long and consider how big or small the discount is, as well as the maturity date. They’ve taken their complex underlying protocol and made it dummy-proof for DeFi users to do the most obvious thing–buy tokens at a discount compared to what’s the market price.

Today, I’ll show how I can long discounted ETH and other tokens depending on my willingness to wait for the position to fully mature.

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

Smart contract risk in Aura, Balancer, Ankr, KyberSwap, Pendle (or any protocol associated with the underlying)

Systemic risk in DeFi composability

Stablecoins are capable of depegging

Front-end spoof attack on the Pendle app

Execution risk–Pendle could shut down their frontend before maturity

Governance attacks on PENDLE

Step 1: First, I go to the Pendle app under Discounts to consider which pool to long based on asset, discount, and maturity date. For this example, I’ll long ETH at the largest discount (12.5%), based on my willingness to wait 374 days until my position fully matures.

Step 2: Having clicked on discounted ETH via Aura ankrETH-WETH at a 12.5% discount, I follow the prompts to Approve WETH and Buy Now, meaning I’m buying ETH at a 12.5% discount, but it won’t fully mature for 374 days until March 27, 2024. If for some reason I need the ETH sooner, I can use the AMM on Pendle to sell out of the maturing PT at a discounted price.

Degen Tutorial

Earn Up To 52% APR With The Convex/Curve Tricrypto Pool On Arbitrum

This week, we’re revisiting one of DeFi’s most popular offerings, Curve’s tricrypto liquidity pool, which offers equal exposure to Bitcoin, Ether and the USDT stablecoin.

Curve Finance pioneered efficient stablecoin swaps when it launched in 2020 and quickly grew into one of the largest decentralized exchanges. Its TVL peaked above $26B in January 2022 prior to the collapse of UST, and currently stands at a respectable $5B.

Liquidity providers (LPs) on Curve are rewarded with its $CRV governance token, with emissions directed through a weekly DAO vote.

We’ve covered the Curve Wars extensively, and the DEX now plans to issue its own stablecoin, which should make things even more interesting.

Meanwhile, Convex Finance is a protocol built atop Curve that makes it possible for yield farmers to obtain boosted $CRV yields without locking any $CRV tokens themselves. It’s popular with yield farmers, as evidenced by nearly $4B in TVL.

The Curve tricrypto pool on Arbitrum currently has a base yield of 24%.

But by going through Convex, one can access the fully boosted yield enabled by Convex’s stash of locked CRV. Convex charges performance fees of 17%, resulting in a net yield of 50% APR, which is still double the base yield.

With Arbitrum’s ARB airdrop around the corner, it’s likely that trading volumes on the network will pick up once the token is live, resulting in additional trading fees.

Let’s get started.

Step 1: Bridge Assets to Arbitrum

You can deposit ETH, WBTC or USDT in the tricrypto pool.

If you don’t already have assets on Arbitrum, you’ll need to bridge them along with some ETH for gas fees.

Using Bungee’s convenient Refuel feature lets you do both in a single transaction.

Step 2: Add Liquidity On Curve

https://curve.fi/#/arbitrum/pools/tricrypto/deposit

Enter the amount you wish to mint and confirm the transaction after approving your assets.

Step 3: Stake LP Tokens In Convex

https://www.convexfinance.com/stake

You can claim your CRV rewards here at your convenience.

Airdrop Alpha

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

$ARB Announced!

Layer 2 network Arbitrum has finally announced its ARB token that will be available to claim on March 23.

Check your eligibility here.

We’ve been tracking Arbitrum ever since last summer’s Odyssey, in addition to tutorials on GMX, Radiant, TreasureDAO and more, so our readers should certainly be eligible!

$PRIME Claim

If you hold Parallel cards, you can claim your PRIME tokens here.

Blur Airdrop

$BLUR is Live!

If you followed our step-by-step tutorial, you can claim your tokens here.

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

Arbitrum – one of the leading L2s for Ethereum. Claimable on Mar. 23

Arrakis Finance – a trustless algorithmic market-maker, for auto-managing Uniswap V3 LPs on Ethereum, Polygon, Arbitrum, and Optimism

Base – A new Ethereum L2, incubated by Coinbase and built on the open-source OP Stack, that could potentially have a governance token in the future

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

DeFrag – instant loans for Treasure gaming NFTs on Arbitrum

Farcaster – a “sufficiently” decentralized social network where users will have the freedom to move their social identity between applications

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 – The same can be said 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. The airdrop has been distributed. Check your zkSync wallet.

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.