The Defiant

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⍺ DeFi Alpha: Supercharged Stablecoin Yields With Concentrator & FiatDAO

  • Yields: 116% APR on Stablecoins, 21-56% on ETH and BTC

  • Starter Tutorial: Earn Up to 67.99% vAPR on Stablecoins with FiatDAO

  • Degen Tutorial: veToken Liquid Lockers from Stake DAO

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: 

  • Oasis.app allows you to borrow Dai against your favorite crypto assets, Multiply your exposure and Earn, all in the most trusted way.

📈 Yield Alpha

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

  • Stablecoins – Earn 116.5% APR with the Curve DOLA LP staked in Concentrator

    • This yield is accrued in mostly CTR + Curve trading fees, due to an Initial Farming Offering (IFO) taking place to distribute 2.5M CTR (50% of total supply).

    • To participate, one must first deposit DOLA, USDC, DAI and/or USDT into this Curve DOLA LP and then stake the LP here in Concentrator -> IFO Vaults -> DOLA.

    • Caution: CTR is still very illiquid, and priced at $5.79 on Balancer. Be mindful of the volatility of any new reward token and how that price affects estimated yields.

  • ETH – Earn 56.14% APR with the Curve alETH LP staked in Concentrator

  • WBTC – Earn 21.06% APR with the Curve sbtc LP staked in Concentrator

  • AVAX – Lend AVAX to the sAVAX/AVAX pool on Platypus via Vector at 13.8% APR 

    • This yield is issued in VTX, PTP, QI, and AVAX.

    • To participate, one must deposit into the AVAX Stake option here on Vector.

  • SOL – Lend SOL to leveraged farmers on Tulip Protocol at 4.21% APY + 5.4% APR 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 DEX or mint it here on Lido.

  • MATIC – stake MATIC with MaticX and LP MaticX-MATIC on QuickSwap for 17% APY

    • The yield is backed by validator rewards using the MaticX liquid staking derivative + trading fees on QuickSwap + dQUICK 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 QuickSwap and stake the LP here.

  • 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 37.8% 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.

🪂 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 was Bridge Week and we walked you through it in a previous issue of DeFi Alpha.

Participants can now claim their Week 1 NFTs.

Week 2 involved the GMX derivatives protocol but was paused after heavy traffic on Arbitrum caused gas fees to spike.

https://twitter.com/arbitrum/status/1542159105946787840

We’ll be watching for the Odyssey to resume.

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.

  • 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 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 Earn Up to 67.99% vAPR with FiatDAO’s FUD LP on Aura

During the last few months, we’ve seen dramatic drawdowns of our favorite DeFi protocol treasuries. The truth is many of the largest treasuries have demonstrated little to no strategy in preserving capital, which is mostly denominated in their own volatile governance token.

Even the most reputable protocols have seen their treasuries shrink by numbers that would make Wall Street CFOs faint. For example, since August 2021, Uniswap’s treasury is down 60-70%, from $4.8B to $1.3B-$1.8B. Aave is currently down just over 85% from $1.08B to $154M.

One of the missing tools that work well in traditional finance, and has not fully developed in DeFi is fixed income. DeFi protocols, funds, and traders could benefit from fixed income to better manage cash flows. Until now, we’ve seen little adoption for earning fixed income with Element, Sense, Yield, Notional, and BarnBridge, among others. These protocols have just begun to enable lenders and LPs to earn a predictable fixed rate of return vs the more common experience of earning variable rates in DeFi.

However, yet another missing parallel from TradFi, is leverage for fixed income positions. Until recently. FiatDAO is a new DeFi protocol for getting leverage against your favorite fixed income assets in DeFi. FiatDAO only launched support for Notional Finance, Element, and Yield positions in mid-May.

This means that anyone who’s earning a fixed rate for a set term can create a position on FiatDAO where they can borrow up to 95 cents per dollar of value deposited (105% collateralization ratio). This opens the door to benefit from fixed income assets while still being able to access liquidity, and in some cases generate higher returns with lower yield rates on stablecoins during this bear market.

The next step in making FiatDAO successful is deepening liquidity for the FIAT token used to borrow against fixed income positions. FiatDAO has launched a new liquidity mining program for their FIAT-DAI-USDC pool on Balancer, with boosted earnings supported on Aura Finance.

Today, I’ll show how I can earn a projected 67.99% vAPR with my stablecoin LP from Balancer staked on Aura. Btw, Aura is to Balancer, as Convex is to Curve. Aura helps me to maximize and boost my rewards as a Balancer LP.

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

  • Smart contract risk in Balancer, FiatDAO, and Aura Finance

  • Systemic risk in DeFi composability given the use of interconnected money legos with shared liquidity

  • Pegged assets such as stablecoins can potentially depeg and if one stablecoin depegs, the entire pool of stablecoins will depeg

  • Yields can go up or down depending on the amount of liquidity in Balancer and Aura

Step 1: First, if I’m prepared to take full advantage of FiatDAO, I could borrow against one of these existing fixed income positions from Notional, Element, or Yield. I can go here to FiatDAO to Create Position if that’s the case.

Step 2: However to keep it simple, let’s assume I’ll just deposit USDC and/or DAI into the Balancer pool of ⅓ FIAT <> ⅓ USDC <> ⅓ DAI. I go to this Balancer pool and click Invest -> specify how much of each token to deposit -> click Preview and follow the prompts to Approve and Deposit my 1-2 tokens. Each token will require an approval and then a final transaction to deposit all tokens.

Step 3: Lastly, I hop over to the Aura Finance app, search FIAT, find this pool below and specify depositing the Max amount of BPT. I follow the prompts to Approve and Deposit my BPT (Balancer Pool Tokens), and I’m done!

🦍 Defiant Degen Tutorial

Maximizing veToken Yields With Stake DAO’s Liquid Lockers

It’s been two years since DeFi Summer, and Curve Finance has firmly established itself as a cornerstone of the open finance ecosystem. Its ve-tokenomics have been adopted by many major DeFi protocols like Yearn Finance and Balancer.

We covered the Curve Wars extensively during the bull market. DeFi protocols discovered that bribing veCRV holders to redirect CRV emissions to their preferred liquidity pools was a more efficient way to incentivize liquidity for their native tokens than traditional liquidity mining.

But for the average DeFi user, locking CRV for veCRV directly to participate in Curve governance and collect those juicy bribes poses some challenges:

  • CRV must be locked for 4 years to maximize voting power (and therefore bribes). That’s an eternity in crypto.

  • Once locked, veCRV cannot be transferred between wallets, making it highly illiquid.

Convex Finance addressed the liquidity problem with its cvxcrv derivative, which can be obtained by locking CRV through the platform and swapped back to CRV through a Curve pool. However, in exchange for that liquidity, lockers trade away their Curve governance rights to Convex token holders.

The Liquid Locker from Stake DAO looks to be the next iteration of liquid CRV derivatives.

  • CRV can be locked for sdCRV, which can be swapped back for CRV on Curve.

  • sdCRV holders retain the option to vote their CRV as they see fit. 

  • Unused voting power and CRV boost capacity can be delegated for additional yield.

  • SDT rewards can be locked for veSDT, which confers additional voting power and boosted yields.

For a more detailed breakdown of how it works, here’s a helpful thread from CurveCap.

The ongoing bear market has seen CRV drop 83% from its peak of $6.50 at the beginning of 2022. So, if you expect Curve to outperform in the long-term, it’s an opportunity to acquire relatively cheap CRV and put it to work.

Risk Warning: This is a directional strategy provided for informational purposes only and should not be considered a recommendation to buy CRV.

Let’s get started.

Step 1: Acquire CRV tokens. You can purchase them through Uniswap, the CRV-ETH Curve pool or on various centralized exchanges like Binance. Using a DEX aggregator like Matcha will ensure that you obtain the best pricing.

sdCRV can also be purchased directly on Curve.

Step 2: Head over to the Stake DAO app, mint sdCRV and stake your tokens.

https://lockers.stakedao.org/

That’s it! Once staked, you’ll start earning the base yield, which is estimated based on currently available bribes. You also have the option to boost the yield by locking SDT for veSDT.

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.

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