⍺ DeFi Alpha: Set Sail On The Arbitrum Odyssey

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 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:

prePO is a decentralized trading platform allowing you to gain synthetic exposure to any pre-IPO company or pre-token project. Check us out at prepo.io
ZetaChain is the first public L1 blockchain that natively connects with any chain and layer including Bitcoin and Dogecoin without wrapping or bridging assets. Dive into the docs to start building the future of multichain.

📈 Yield Alpha

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

ETH – Earn 13.23% vAPR with the Curve sETH LP staked in Convex
- This yield is accrued CRV, CVX, and trading fees.
- To participate, one must first deposit ETH or sETH into this Curve sETH LP and then stake the LP here in Convex.
BTC – Earn 24.22% vAPR with the Curve pBTC LP staked in Convex
- This yield is accrued CRV, CVX, and trading fees.
- To participate, one must first deposit pBTC, renBTC, sBTC, or WBTC into this Curve factory pool and then stake the LP here in Convex.
AVAX – Lend sAVAX on Benqi using Yield Yak at 9.8% APY
- This yield is issued in sAVAX, paid by borrowers on Benqi.
- To participate, one must deposit into this YieldYak farm.
SOL – Lend SOL to leveraged farmers on Tulip Protocol at 9.41% APY
- This yield is backed by interest paid by borrowers on Tulip.
- To participate, one must deposit SOL in the Tulip lending tab.
MATIC – stake MATIC with MaticX and LP MaticX-MATIC on Balancer for a net 37% APY
- 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, I 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 – mint pATOM and stake the pATOMs on Ethereum to earn more pATOMs on pSTAKE at a rate of 13.5% APR
- 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 – stake with sFTMx by Stader, earning 13% APY
- 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 – stake with the first HBAR liquid staking derivative by Stader, earning 40.9% APY
- The yield is issued in HBAR rewards, as HBARX is earning validator rewards.
- To participate, deposit HBAR to receive HBARX here on Stader.
- Caution: This is in beta and withdrawals will not be possible until July 2022 or later.
Stablecoins – LP with DOLA, USDC, USDT, and/or DAI at 16.63% vAPR in the Curve DOLA+3Crv LP staked in Convex.
- This yield is accrued in CRV, CVX, and trading fees.
- To participate, one must first deposit into this Curve DOLA-3Crv LP and then stake the LP here in Convex.

🪂 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.

Arbitrum Odyssey

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

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

Week 1 is Bridge Week, and naturally, we’ve got you covered in this week’s Degen Tutorial.

https://twitter.com/arbitrum/status/1537942320741355520

Hop Airdrop

$HOP went live on June 9. Claim here.

If you followed the guide posted in previous issues of DeFi Alpha, you should be eligible.

Optimism Airdrop

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.
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
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 – Layer 2 scaling solution for Ethereum using zero-knowledge (ZK) proofs. Testnet guide here. Bridge some assets using StarkGate.
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 recently 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

How to Revoke Token Spending Permissions with Revoke.Cash

Over the last 24 hours, four major DeFi websites have had their DNS hijacked by bad actors who intended to trick users into giving unlimited token spending approvals to contract addresses that would allow them to drain your wallet of a specific token.

As of this writing, we have confirmed that this style of DNS hijack attack, similar to what BadgerDAO experienced back in late 2021, happened to the following DeFi application websites:

Convex Finance – convexfinance.com
DeFiSaver – defisaver.com
Allbridge – allbridge.io
Ribbon Finance – ribbon.finance

Even more concerning, all of these website domains were managed through the same service provider Namecheap.com, which has led many to speculate if there’s a rogue employee at Namecheap or if an employee account is compromised. The attack was designed to fool even the most advanced DeFi users by using attack contract addresses with the same first 4 and last 4 characters of the legitimate address. Once approved, the attack contract can drain your wallet funds, based on unlimited spending permissions for certain ERC20 tokens.

Convex Finance has already confirmed that its DNS was hijacked, resulting in some users mistakenly approving malicious contracts. Ribbon reported only 2 users were prompted to approve malicious contracts, while DeFiSaver reported no users affected, and we’re waiting to find out if any Allbridge users were affected.

Whether you were affected or not by these recent attacks, we want to show DeFi users how to identify unlimited spending approvals and revoke such spending limits so you can sleep easier, not having to trust that a contract won’t ever be compromised by a bad actor or by a rogue contract mistakenly approved.

Step 1: First, I go to revoke.cash and connect my Ethereum wallet. I can check which tokens and token addresses might have Unlimited spending approved. See in red below a few examples of “Unlimited allowances” in my wallet for specific tokens like BAL, CHI, and DAI.

Step 2: Depending on whether I regularly use any of these contracts in DeFi apps and/or whether I recognize them, I might consider using the Revoke button in black next to the Unlimited allowance to reset token spending approvals to 0. Then, I can rest assured that no dApp, developer, or potentially bad actor can use the spending approval to drain my wallet of a token.

Let’s assume I’m ready to revoke the Unlimited allowance for BAL token so I click the black Revoke button and follow the prompts in MetaMask to Confirm setting my spending permission to 0 BAL.

🦍 Defiant Degen Tutorial

Arbitrum Odyssey – Set Up A Liquality Wallet and Bridge ETH

https://twitter.com/Liquality_io/status/1538940984855257088

gm Defiers!

The Arbitrum Odyssey is upon us, and it’s time to figure out the best strategy to obtain all the NFTs and rewards on offer over the next 8 weeks.

Week 1 of the Odyssey is Bridge Week, which means that all you need to do is bridge some ETH over to Arbitrum using one of the supported bridges.

All bridgers will be able to claim an NFT (no minimum amount required).
Users of the bridge with the most volume will be eligible for a bonus NFT.

There are over a dozen bridges to choose from, and dedicated degens may want to use the ones that are yet to issue tokens themselves. Some of these bridges are offering additional incentives on top of the Odyssey rewards.

https://twitter.com/OlimpioCrypto/status/1539189740460810241

However, for those of you that are pressed for time and looking for an easier option, this handy Dune dashboard tracks bridge volumes in real-time using on-chain data.

We can see that Hop Protocol is currently in the lead, followed by Celer Network, Across.to and Hashflow.

Which brings us to Liquality.

Liquality is a multi-chain browser extension wallet with inbuilt bridging capabilities. Essentially, you can bridge ETH from mainnet to Arbitrum using Hop Protocol from within the wallet itself.

Since they’re also offering a ‘surprise reward’ for Odyssey participants, it’s a good time to try it out.

Let’s get started.

Step 1: Download and install the Liquality wallet.

https://liquality.io/wallet.html

Step 2: Create a new wallet.

Make sure you backup your seed phrase in a secure location and set a password to access your new wallet.

Step 3: Transfer some ETH from your regular wallet or a centralized exchange to your Liquality wallet on Ethereum mainnet.

Click on the ‘Receive’ button and choose ETH as the asset you wish to receive. You’ll see a pop-up showing your Ethereum address which you can copy over to Metamask.

Once your transfer is confirmed on the blockchain, you should be able to see your ETH balance in Liquality.

Step 4: Bridge ETH to Arbitrum by clicking the ‘Swap’ button and choosing ARBETH as the destination asset.

Review and confirm the swap transaction. You’ll be able to monitor the transaction under the ‘Activity’ tab.

It took approximately five minutes for the transaction to be completed.

You should now be able to see your ETH balance on Arbitrum.

That’s it! You’ve now qualified for the basic Week 1 NFT, a surprise reward from Liquality, and a potential bonus NFT assuming Hop maintains its current lead in the standings.

As this quest ends on 6/28, monitor the Dune dashboard for last minute changes and use the winning bridge to ensure that you qualify for the bonus NFT.

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.