Bear Market Investment Guide: High-quality DeFi financial management options in the "post-Anchor era"
Original compilation: Amber
Original compilation: Amber
As the cryptocurrency market has taken a sharp turn for the worse, the incentives for liquidity mining have generally declined, and the DeFi rate of return has also declined, and the activity on the chain has shown obvious signs of cooling. Gone are the days when you can deposit stablecoins in money market agreements and still earn double-digit annualized returns. Nowadays, you can hardly find a stablecoin with an annualized return of more than 4%. Currency management.
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Total DeFi TVL, data source: DefiLlama
However, for those users who are willing to take certain risks, today’s DeFi market is by no means worthless. An attractive option. However, before the official launch, there is still a reminder that DeFi is still a cutting-edge concept. While reaping excess returns, you must bear corresponding risks.
Maple Finance
Networks: Ethereum, Solana
Asset(s): ETH, USD
Estimated Yield: 5-9% APY
Introduction
Introduction
Maple is an under-collateralized lending protocol. Users can lend tokens to institutions represented by Alameda Research and BlockTower Capital on the platform. Loans on Maple are originated through lending pools managed by third-party specialized cryptocurrency firms that conduct due diligence on the creditworthiness of borrowers in their respective pools. The protocol, which runs on Ethereum and Solana, has disbursed more than $1.3 billion in loans since its inception.
financial strategy
risk
risk
Before deciding to lend funds on Maple, users should be aware of several key risks. The first is liquidity risk, as lenders on Maple are subject to various lock-up periods, currently 90 days for each of the aforementioned pools. In addition, the lender of course bears the risk of the borrower not repaying the loan. While this is a permanent, on-chain stain on the borrower's reputation, it is certainly within the realm of possibility for the borrower to default on their loan. Given that the principal coverage ratio of the fund pool is very low, and the principal coverage ratio of each fund pool is between 1.5-3.5%, in the event of a breach of contract, the percentage of compensation that users can obtain will be very limited.
Convex Finance
Networks: Ethereum, Solana
Assets: USD
Estimated rate of return: 8-11% annualized rate of return
Introduction
Introduction
Convex is a yield protocol built on top of Curve. Curve employs a governance token model where holders of the protocol's native governance token, CRV, can lock up their tokens in exchange for veCRV, an illiquid, non-transferable token. veCRV holders can get an increase in CRV rewards (up to 2.5 times) when providing liquidity, and the size of the increase is proportional to the number of tokens held by LPs.
Given that the cost of CRV required to capture large yields is prohibitive for many users, Convex offers an attractive option for any Curve liquidity provider staking their LP tokens, whether they hold There is veCRV, which provides boosted rewards, increasing their returns.
financial strategy
risk
risk
While LP stablecoin pools on Curve and betting on Convex are not considered risky since many of these assets are pegged to each other, there are still several potential risks that users should be aware of. First, the Curve pool has the potential to become unbalanced if the market loses confidence in an asset in the pool, meaning not all LPs can exit each asset in the same proportion. Additionally, users are exposed to two layers of smart contract risk from Convex and Curve.
Balancer
Networks: Ethereum, Arbitrum, Polygon
Asset(s): ETH, USD
Estimated rate of return: 5-11% annualized rate of return
Introduction
Introduction
Balancer is a decentralized exchange. The protocol is highly customizable as it supports the creation of multi-asset liquidity pools with different weights, rather than the traditional equal-weight model like other AMMs such as Uniswap and Curve. The Balancer fund pool has set up a vault structure, so that idle funds can enter other agreements, such as the lending market, to earn additional income for liquidity providers. Like Curve, Balancer leverages the ve model where BAL holders can lock their tokens into veBAL, allowing them to earn more rewards when providing liquidity.
financial strategy
Like Curve, there are a number of pools on Balancer where liquidity providers can earn without incurring impermanent losses. This includes the bb-aUSDT-DAI-USDC pool, currently yielding between 8-18% (depending on the size of the LPs boost), where users can earn transaction fees, BAL rewards, and Aave's interest income without using The liquidity will be deposited in the money market to further increase LP income.
risk
risk
The risks of providing liquidity on Balancer are similar to the risks of providing liquidity on Curve. In addition to the risk of smart contracts, LPs have a risk to each underlying asset in the pool, and to it becoming unbalanced. Additionally, users who take risks on Curve and provide liquidity to pools containing non-homogeneous assets run the risk of incurring impermanent losses.
GMX
Network: Arbitrum, Avalanche
Assets: ETH, BTC, USD
Estimated rate of return: 30-45% annualized rate of return
Introduction
Introduction
GMX is a decentralized contract exchange platform running on Arbitrum and Avalanche. The protocol enables traders to gain up to 30x leverage by allowing them to borrow from multi-asset liquidity pools known as GLPs.
GLP is similar to an index because it is generated against the performance of a basket of large-cap assets such as ETH, BTC, and stablecoins such as USDC, DAI, USDT, and FRAX. The weight of each asset in GLP is determined according to the utilization rate of the positioning. When traders on the DEX are long, volatile assets are assigned a higher weight, and when they are short, stable coins account for a higher proportion of the pool. Large specific gravity.
income strategy
risk
risk
GLP holders should be aware of several key risks. First, as with providing liquidity to any pool, LPs take price risk on the underlying assets within the index. Furthermore, in providing leverage to traders through GLPs, liquidity providers are essentially on the opposite side of their trades. The price of GLP reflects this, rising when the market moves against traders' positioning and falling when the market moves in line with it. Finally, GLP holders of course also bear the risk of smart contracts.
Other Competitive Options
Notional Finance (annualized rate of return 3-6% - risk: low)
Users can lend ETH, USDC, DAI, and BTC on this Ethereum-based lending platform to earn fixed-rate lending interest currently between 3-6%.
Tokemak (6-9% annualized rate of return - risk: medium)
Users can unilaterally deposit ETH and various stable coins such as USDC, DAI, alUSD, FEI, and FRAX into the decentralized market-making protocol to obtain TOKE token rewards.
Ribbon Finance (14-25% APY - Risk: High)
summary
summary
It is true that the DeFi market has passed the stage of "gold everywhere", but there are still some attractive opportunities in front of us, and users still have the opportunity to earn relative to the traditional financial market under the premise of relatively controllable risks. , and use it to "earn coins" in a bear market.
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