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.
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📈 Yield Alpha
Each week we will provide options to earn yield on ETH, WBTC, stablecoins, and other major tokens.
ETH – Earn up to 33% APY with Stake DAO’s active options strategies.
This is a strategy suitable for a sideways market. Yield is generated by selling weekly options and paid out in ETH.
Covered call and put-selling strategies are available. No performance fees are levied. However, there is a 0.5% withdrawal fee.
To participate, deposit ETH into your chosen strategy.
Note that you can incur a loss in a given week if the written options expire in the money.
WBTC – Earn 13.07% APY using Yearn’s WBTC vault on Fantom.
This vault generates yield by folding (supplying and borrowing simultaneously) WBTC on Scream. Earned SCREAM tokens are automatically sold for more WBTC.
To participate, deposit WBTC into the Yearn vault.
If you haven’t used Fantom before, here’s a guide to getting started.
Stablecoins: Provide USDT/USDC/DAI liquidity on Defrost Finance for 91% APR.
This yield is issued in MELT tokens. H2O is Defrost’s overcollateralized stablecoin.
Yields can be boosted by staking MELT tokens.
To participate, add liquidity to the H2O/3crv pool on Curve and stake your LP tokens on the Defrost app.
A step-by-step guide is provided in this week’s Degen Tutorial.
🪂 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.
Gnosis – offers MEV-protected trades through its CowSwap DEX and plans to spin-off Gnosis Safe into its own DAO. By locking $GNO tokens before Feb 15, one will be eligible for a vested CowSwap airdrop and possibly $SAFE tokens if the spin-off proposal passes.
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 Stake $ATOM On The Cosmos Hub For Potential Airdrops
Cosmos bills itself as the ‘Internet of Blockchains’.
Instead of multiple applications running on a single base layer, as is the case with Ethereum, Cosmos allows developers to build autonomous application-specific blockchains. These separate blockchains are able to interact with each other using Cosmos’ Inter-Blockchain Communication (IBC) protocol.
Activity in the Cosmos ecosystem has been picking up after the launch of the Gravity Bridge to Ethereum last month.
The Cosmos Hub is at the centre of the network, secured by its native ATOM token under a Proof-of-Stake consensus mechanism.
Users can stake ATOM tokens and delegate them to their validators of choice to earn staking rewards. More details on the staking mechanism can be found in the official documentation.
New projects that launch on Cosmos have tended to reward ATOM stakers with airdrops, and this trend is expected to continue as the ecosystem grows.
With that in mind, here’s a step-by-step guide to acquiring and staking ATOM.
Step 1: Install the Keplr wallet. You’ll need to generate a new wallet address and record your seed phrase, similar to Metamask. The Chrome extension can be found here.
Once you’ve created your wallet, you can find your new ATOM address on the top-left corner of the dashboard.
Step 2: Acquire some ATOM tokens. The easiest way to buy ATOM is on centralized exchanges such as Coinbase and Binance. A list of exchanges can be found here.
Alternatively, you can bridge UST from Ethereum to Terra, and from there to the Osmosis DEX where you can swap your UST for ATOM. This is a complex undertaking involving multiple wallets and is recommended for advanced users only!
Once you have acquired ATOM tokens, send them to the wallet created in Step 1.
Step 3: Stake your ATOM tokens at
You will be presented with a list of active validators.
Validators run by exchanges are usually excluded from airdrops so you’ll want to avoid those. Staking with smaller validators has the added benefit of improving decentralization of the network.
Blocks United, a smaller Cosmos validator, has posted a useful guide on Reddit on choosing the right validator.
Note that you can delegate your ATOM across multiple validators.
Once you delegate your tokens, you will start earning staking rewards in the form of more ATOM tokens that you can claim at any time.
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.
🦍 Defiant Degen Tutorial
Earn 92% -500% APR on USDT/USDC/DAI By Providing Liquidity On Defrost Finance on Avalanche
Defrost Finance is a DeFi stablecoin protocol on the Avalanche blockchain. Its H2O dollar-pegged stablecoin is collateralized by liquidity provider (LP) tokens and interest-bearing assets. MELT is the protocol’s governance token.
We’re interested in the H2O-3crv pool that’s currently yielding a base APR of 92%. There’s also an option to boost yields by up to 5x through staking MELT tokens.
Step 1: Add the Avalanche network to MetaMask using Chainlist.
Step 2: Bridge your assets. We’re going to use the official Avalanche Bridge since it provides an initial AVAX airdrop for gas fees, but there are many other options – Anyswap, Celer, Synapse etc.
Gas fees on Avalanche are paid in AVAX and you’ll receive 0.1 AVAX when you bridge assets for the first time. I recommend buying some additional AVAX so that you don’t run out of gas at an inopportune moment. You can do so on Trader Joe, which is the major DEX on Avalanche.
Step 3: Add liquidity to the H2O3crv Curve pool. You can deposit USDC, USDT or DAI.
You’ll be asked to approve spending your assets. Confirm the transactions to receive your Liquidity Provider (LP) tokens.
Step 4: Stake your LP tokens on the Defrost farming page.
That’s it! You’re now earning MELT tokens, which you can claim at your convenience.
You can sell the MELT or alternatively stake the tokens to boost your farming yield by up to 5x.
📰 Elsewhere on The Defiant
Tuesday Tutorial on The Defiant YouTube: This week, Robin covered the new Power Perpetuals from Opyn, which let you take a leveraged position on ETH with no liquidations. 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.