If you believe Defi is an amazing field but are not sure which company will stand out, Defi Indexes are probably the way to go. To start with Zerion has a list of them:
DPI by IndexCoop
Taking DefiPulse Index as an example, it has a portfolio of all leading Defi companies, with the biggest being Uniswap. The index itself has a market cap of $143m, and you can purchase DPI, its token representing a share of the portfolio, on Uniswap or the official website IndexCoop. This is probably the earliest index fund for Defi.
In addition to holding DPI, you can provide liquidity for DPI by pairing this with ETH on Uniswap and then deposit the LP tokens to the incentive pool of IndexCoop. The yield is about 18% now, fees plus INDEX rewards.
DPI has a fork version, BasketDAO, which follows the same principal but with higher incentives now and a more robust DAO mechanism. Holders of BASK, its platform token can decide on the weights of the portfolio. Currently, the yield from this platform is over 70%.
DEFI5 by Indexed Finance
If you think the DPI index is too diversified, then DEFI5 by Indexed Finance suits you better. This is an index for Uniswap, Aave, Compound, Curve and Synthetix. The index has a much smaller market cap of $13m and it only takes in the blue-chips of defi. There’s no on-going incentive programs for this product now.
Indexed Finance offers some other index products, e.g. NFT indexes or Oracle indexes. Relevant to defi, there’s a more aggressive version than Defi5, named CC10 (10 top tokens of cryptocurrency), which comprises of defi majors and some oracle tokens like Chainlink.
Indexed Finance also has a Degen defi index, which comprises of newer tokens like 1inch or Badger. The details are not available on the official website. Currently, there’s an incentive program going on for this (but ending on 2 May):
PIPT by Power Pool
PIPT by Power Pool is slightly more diversified than DEFI5, with including of insurance platform Nexum, Yearn, and Power Pool’s own token CVP. Incentives are available for the Sushiswap pair PIPT-ETH.
Power Pool has a few other products, much concentrated around Yearn’s ecosystem.
There are a few other smaller or standalone indexes, such as the Defi Index of Synthetix, or some Defi-centric funds on dHedge, or smaller index funds by PieDAO.
Holding one of the indexes and benefit from the rise of Defi is the simplest way to ride the defi boom. In addition, one can provide liquidity for a defi index with ETH, as Defi majors generally move in line with ETH, and the yields now are reasonable. We consider this is a way to enhance ETH yield and will incorporate this as a strategy for ETH product.
(Serenity Team, 26 April 2021, Twitter: https://twitter.com/SerenityFund)
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