Yields: Up to 23% APR on Stablecoins, 11-16% on ETH and BTC
Starter Tutorial: Lend ETH at 3-4% APY with ETH Demand Surging for The Merge
Degen Tutorial: On-Chain Quests To Maximise Your Chances Of An Arbitrum Airdrop
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.
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 and old yield earning 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 provides you with automated management strategies for most trusted protocols. Alongside Stop loss, Take profit and automated leverage, Maker and Liquity users can now rely on the advanced Trailing stop strategy.
📈 Yield Alpha
Each week we will provide options to earn yield on ETH, WBTC, stablecoins, and other major tokens.
ETH – 11.21% APR with the wETH/alETH LP staked in Velodrome on Optimism
This yield is accrued in VELO.
To participate, one must deposit and stake in this wETH + alETH LP.
WBTC – 16.46% projected vAPR with the Curve pBTC LP staked in Convex
This yield is accrued in CRV, CVX, and trading fees.
To participate, one must first deposit pBTC, renBTC, sBTC and/or WBTC into this Curve pBTC pool and then stake the LP here in Convex.
Stablecoins – 23.21% APY with the Concentrator Original Vault for the Curve pusd LP
This yield is backed by Curve trading fees + CVX and CRV rewards periodically harvested and compounded into staked cvxCRV. The yield will ultimately be claimed via Concentrator’s aCRV (equal cvxCRV).
To participate, one must first deposit into the Curve pusd LP and then stake the LP here on Concentrator -> Original Vaults -> search pusd -> Deposit. Alternatively, I can skip the Curve deposit and use most any stablecoin with the Concentrator single-asset deposit under Concentrator pusd Original Vault -> Deposit.
This yield has consistently held up for months between 15-25% APY.
AVAX – 10.4% APR lending AVAX to the sAVAX/AVAX pool on Platypus via Vector
This yield is issued in VTX, PTP, QI, and AVAX.
To participate, one must deposit into the AVAX Stake option here on Vector.
SOL – 7.59% APY lending stSOL on Tulip Protocol + 5.8% APY from the underlying SOL liquid staking rewards issued to stSOL holders
This yield is backed by interest paid by borrowers on Tulip + staking rewards.
To participate, one must deposit stSOL in the Tulip lending tab.
To obtain stSOL, one can trade on a Solana DEX or mint it here on Lido.
MATIC – 27.9% APY with LP MaticX-MATIC on Balancer
The yield is backed by validator rewards using the MaticX liquid staking derivative + trading fees on Balancer + BAL rewards + SD rewards.
To participate on Polygon, one can use the Stader MaticX dApp to mint MaticX.
Then, I deposit into the 50/50 MaticX-MATIC pool on Balancer and stake the LP.
ATOM – 13.5% APR staking pATOMs on pSTAKE on Ethereum
The yield earned is issued and claimable in pATOM.
To participate, one must first mint a 1:1 representation of ATOM as pATOM on Ethereum by using the pSTAKE dApp under Stake
Then, deposit/stake pATOMs to get stkATOMs and earn 13.5% APR
FTM – 13% APY staking with 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 – 27.35% 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.
Caution: This is in beta and withdrawals may not be possible until July 2022 or later.
🪂 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.
NFT AMM 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!🎉
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 this week’s Degen Tutorial, we cover a series of on-chain quests.
We’ll be watching for the Odyssey to resume, now that Nitro is live.
Congratulations if you followed our guide betting on a hunch that Optimism would release a token!
$OP is Live! Claim guide here.
Arch Finance – a protocol for comprehensive indices that provide access to differentiated sources of market risk.
Concentrator – Congrats if you used Concentrator! They’re currently running an Initial Farming Offering (IFO) and are expected to distribute CTR tokens to early users of Concentrator.
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
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
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.
👨🎓 Defiant Starter Tutorial
Lend ETH at 3-4% APY with ETH Demand Surging for The Merge
With The Merge approaching September 15th, there’s increasing demand to borrow ETH for countless strategies such as longing ETH, shorting ETH, hedging, LP’ing to earn trading fees due to ETH volatility, and many more.
Instead of trading the Merge, I want to position myself to passively take advantage of the increased DeFi activity related to ETH. The easiest way to do so is by lending ETH on a battle-tested money market like Aave.
Even after the Merge when Ethereum has shifted to Proof-of-Stake, it’s very likely that we’ll see surging demand to borrow ETH until the borrowing rate is nearly equal to the staking rate of ETH.
But why? Imagine if Aave were offering ETH borrowing at 2% and the ETH staking rewards were as high as 4%. A rational DeFi investor will take advantage of the opportunity to borrow ETH at a lower rate and lend at a higher rate.
Today, I’ll show how I can earn 3-4% APY leading into the Merge and potentially even more post-Merge!
Before we get started, please be aware of these risks.
Smart contract risk in Aave
Front-end spoof attack on the app.aave.com
Exploits in economic design
Governance attacks or admin key compromise
Systemic risk in DeFi composability
Pegged assets such as stablecoins in Aave can potentially depeg
Step 1: First, I go here to the Aave app, under the Ethereum mainnet market, which is currently Aave v2 as of this writing. I can connect my Ethereum wallet.
Step 2: Next, I check the Supply rate for ETH and as of this writing, it’s 3.11% APY so I click Supply, specify how much ETH to deposit and click Supply ETH, following the prompts to confirm a single transaction on my Ethereum wallet!
🦍 Defiant Degen Tutorial
Complete Arbitrum Guild Tasks To Maximise Airdrop Odds
Arbitrum executed its Nitro upgrade on August 31 and everything seems to be running smoothly.
While the Odyssey is yet to resume, Arbitrum recently announced a set of 13 quests, which are some basic tasks that need to be completed on-chain. Most of them involve holding minimal amounts of various projects’ governance tokens.
Note that there’s been no official confirmation that completing these quests will result in an airdrop, but that’s a logical assumption. Of course, there are no guarantees!
Let’s dive in.
Step 1: Join the Arbitrum Guild.
Become a member of the Arbitrum Discord, and you’ll be asked to connect your wallet, Discord and Twitter accounts.
Step 2: After you’ve joined the guild, you’ll need some ETH on Arbitrum to swap for other tokens and pay for gas fees. Use your preferred bridge to send ETH and you’ll receive aETH on Arbitrum.
Bungee is a great place to check which bridge is most cost-effective since rates keep changing. At the time of writing, aETH is actually being offered at a slight discount through Hop Protocol.
With some aETH in hand, we can get on with the quests.
If you completed the first Odyssey task (Bridge Week) and claimed your NFT, that covers the first quest.
Ten quests require you to simply purchase small amounts of tokens issued by protocols operating on Arbitrum.
Treasure (0.001 MAGIC)
Chainlink (0.001 LINK)
GMX (0.001 GMX)
Mycelium (0.001 TCR)
Dopex (0.0001 DPX)
Umami (0.001 UMAMI)
Livepeer (0.001 LPT)
JonesDAO (0.001 JONES)
Sperax (0.01 SPA)
PlutusDAO (0.001 PLS)
The contract addresses are provided on the Guild page and all these tokens can be found on Uniswap, except JONES, which you can find on Sushi.
As you complete the swaps, your roles will be updated on the guild page and you’ll also receive confirmation via Discord DM.
Hop LPs and Arbisquad
The final two quests require you to provide liquidity on Hop Protocol and add “(💙,🧡)” to your Twitter username.
You can add liquidity on Hop here.
That’s it! We’ll keep you informed of the next steps once the Odyssey resumes.
📰 Elsewhere on The Defiant
Tuesday Tutorial on The Defiant YouTube: This week, Robin covered Lifeboat, a tool you can use to keep up with the communities you love in NFTs. 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 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.