Accumulation phase —Some of the Best DeFi Yields off LPs During the Bear Market

By June 22, 2022DeFi
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Yes, it’s a bear market but it doesn’t mean that you should not put your tokens to work while we’re waiting to come out of it.

Why Accumulate?

If you’re completely sold on a project, and believe with 100% conviction that they’re going to survive this crypto winter, or else if you’re simply stuck with a whole bunch of alt-bags that have lost 85% of their ATH-value and you’re refusing to sell, it makes sense to try position your crypto to work as hard as possible until the winter is over. In this season we’re seeing with the depegging of stETH that even staking has it’s risks, but in my search to find some of the highest yields (with little to no impermanent loss) out there, I thought I’d share some of highest yields on tokens I own that are currently available.

And an added caveat, with the recent scare of Celsius’ collapse, the following methods are all based on DeFi methods rather than CeFi. So the major security risks are theoretically only smart contract-based, allowing you to maintain control of your keys and crypto. There are other CeFi platforms out there that might that might offer better returns, but like Celsius, many of these are/were using leveraged positions which involves a lot of risk.

Without further ado…

$FTM (20~40% APY)

One of the first places I look for yield farming is usually on beefy.finance. They’ve setup their farms so that you can earn native LP tokens with auto-compounding, and as far as being hands-off, beefy usually takes the cake. With $FTM, they currently have a LP with $beFTM, which stands for Beefy Escrowed Fantom. You can read about the tokenomics here, but essentially 1 beFTM is minted for every 1 FTM that is deposited through their Beefy Delegator vault. Is the peg safe? For the past month for the most part it certainly seems to be, but that being said, there definitely are a couple of instances where it has lost its peg:

That being said, $beFTM is completely 1:1 backed by $FTM so I suspect that it will only depeg if there’s a significant amount of quick buy/sell pressure. Therefore theoretically, this LP should come with little chance of impermanent loss assuming that $beFTM maintains it’s peg.

$AVAX (At least 15.7% APR)

This LP is available on app.platypus.finance, and I say “at least” 15.7% APR because that’s the base-rate for staking. If you’re unfamiliar with Platypus, it essentially works similar to Convex/Curve where you can earn greater yields if you stake their native $PTP token and subsequently earning $vePTP. $PTP is at a ridiculously low price right now (currently sitting around $0.12, a far cry from the ATH of over $7) so being able to accumulate a good deal of $vePTP has never been easier to do. If you’re curious about how high your yields can grow, they spell out their formula of how to maximize your boosted APR here or else you can check out their Booster Calculator on their app where you can plug in how much $AVAX and/or how much $vePTP can affect your boosted APR:

A sample calculation that shows a boosted APR of 121.2% APY

The major risks: Unlike with beefy.finance, with Platypus you will not be paid out in the native$ AVAX, but instead with $PTP and $QI. Therefore your rates could be significantly decreased if the price for either $PTP or $QI decrease. Also, the reason why they advertise their rates in APR instead of APY is because none of this is auto-compounded, meaning that every time you claim your rewards, you’ll be on the hook for the gas fees.

Stablecoins Strategy #1 (DAI/USDC/USDT 20~39% APY)

I’ve written about Zunami before, but since then, Zunami protocol has gotten even that much more attractive because at time of writing they are currently offering 39.03% APY and it looks like the rate keeps climbing:

A quick walkthrough of Zunami — all through DeFI, you deposit either $DAI, $USDC, or $USDT via ERC20 and your funds are utilized through primarily 3 different Convex strategies broken down accordingly:

Now we know from the UST/LUNA fiasco and all of the other depeg scares lately that nothing beats the likes of DAI/USDC/USDT, so this comes with some risk because like $UST, $USDN is an algorhythmically-backed stablecoin and $MIM, like $DAI is an overcollateralized stablecoin. The newest stablecoin out of the three is $PUSD or Polygon USD, which is minted 1 $PUSD for every $1 worth of $MATIC that is staked on the Polygon network. If you’re interesting in reading more about $PUSD, you can check out their white paper here. Having only been around since early 2022, in my opinion it remains to be tested. But with all that being said, it only makes a 6.9% portion of the three strategies that Zunami uses.

Stablecoins Strategy #2 (MIM-USDC ~42% APY)

With the recent volatility seen on $MIM, I suspect that this is one of the main reason why the APY’s on this Beefy Finance vault has skyrocketed, but right now you can earn around 42% APY on the MIM-USDC LP vault:

As I mentioned before with $FTM, Beefy’s vaults are great because you earn your yield in native MIM-USDC and it’s auto-compounded. $MIM did have a depegging scare this past week, but I really think that it’s shown its meddle after surviving the Sifu fiasco and the crazy price action drops we’ve seen over the past week. If you’re interested in reading further, I’d recommend taking a look at one of their latest articles addressing FUD around abracabra’s insolvency claims.

Conclusion:

As you can tell, although none of these strategies come without some risk, but if you’re worried about getting your funds locked in CeFi with fear of insolvency, then these might be better options for you to consider.

Are there any other vaults out there that you’ve found that are worth taking a look at? If so, I’d love to hear about it in the comments. Thanks again for reading, and please be sure to follow me on twitter to get all of my updates: https://twitter.com/CryptosWith

Disclaimer: Hey folks, so I must state again that we’ve seen a lot of tokens depeg, death spiral, or just simply just absolutely tank in value, so please do not consider any of this to be financial advice, and instead simply information that is for educational purposes only.

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