Take a look at the on-chain income strategies of DeFi Degens: Sommelier Finance, IPOR, DYDX
Original compilation: Kaori, BlockBeats
Editors note:
Sommelier Finance is a protocol built on the Cosmos blockchain that aims to expand the capabilities of decentralized finance based on Ethereum. The project currently provides two main services - liquidity mining and algorithmic trading strategies. For users, they only need to choose one of them and lock their funds in the pledge pool to get benefits. Crypto DeFi KOL Emperor Osmo (@Flowslikeosmo) wrote an article introducing several newly launched staking pools by Sommelier.
The dYdX V4 mainnet will be launched soon and will provide native DYDX staking and income distribution. DeFi researcher Thor Hartvigsen (@ThorHartvigsen) built a calculator to estimate DYDX staking yield and APY.
IPOR Labs aims to help mature DeFi’s money market by building interest rate derivative financial instruments and standardize interest rates throughout the industry. IPOR stands for Inter Protocol Over-block Rate, which is a mid-market interest rate determined by block-to-block source. Crypto KOL DeFi Made Here (@DeFi_Made_Here) wrote an article to study how to achieve high and low risk rates of return in IPOR Labs.
BlockBeats has compiled the above three tweets about DeFi protocol yields for readers to study. They are compiled as follows:
Analysis of Sommelier Finance’s three new pledge pools
Original author: Emperor Osmo, Original link」
The fastest growing revenue aggregator on the market is the Cosmos Application Chain. Sommelier Finance has maintained significant growth momentum, with TVL exceeding $40 million.
before mediscussSommelier has significant growth prospects this year. Over the past month, they have launched a new staking pool with significantly higher yields, which has fueled this growth. Now, let’s delve into these strategies.
1、Real Yield ETH（APY 11.06% ）
This staking pool was created by Seven Seas and Define Logic Labs to maximize ETH returns by:
- Leveraged staking on Aave
- Compound and Morpho are also involved in providing liquidity for ETH liquid pledge tokens on Uniswap V3.
2、Turbo stETH ( 10.23% APY)
StETH is a highly liquid crypto asset that allows for staking pools:
- Use various dynamic strategies such as leverage staking
- Take advantage of CL terms on DEX
- Create arbitrage opportunities between LST-ETH pegs to optimize users’ ETH earnings
3、Turbo GHO (APY 3.00% )
The staking pool utilizes Aave’s over-collateralized stablecoin GHO. The goals of this vault are:
- LP and GHO pairing on Uniswap V3
- Pair with USDC, DAI, USDT or LUSD
This allows users to earn substantial profits on stable currency pairs.
Sommelier Finance’s growth has translated into more staking pools, which has also resulted in more fees for stakers. Fees incurred by SOMM’s stakers to date continue to grow.
This is the result of achieving good product-market fit. Users are eager to earn income from alpha assets like ETH, and Sommelier provides them with safe strategies to achieve this goal. This is just the beginning of the journey to profitability for all stakeholders.
DYDX Delta Neutral Staking Arbitrage (20-30% + APY)
Original author: THOR HARTVIGSEN; Original link」
I built a calculator that estimates DYDX staking yield and APY (if you hedge this risk by shorting DYDX on Vertex).
1. What is the annual interest rate of DYDX pledge?
First, we must estimate how much of the total circulating supply of DYDX will be staked. Here are some other perps for comparison:
SNX - 58% staked
GMX - 74% staked
GNS - 73% staked
On average, an estimated 68% of the DYDX supply will be staked. What about fees allocated to stakers? Assuming all fees are allocated to stakers and taking year-to-date annualized fees, we get:
The annual distribution is $79 million (assuming no growth, so assuming small size) which results in a staking APR of 26.4% - pretty crazy!
But now we face DYDX price risk. So lets go one step further:
2. Short the same amount of DYDX on Vertex
Vertex is a cross-margin order book and AMM trading protocol that recently added DYDX-perp.
Using the calculator shown below, you can choose your preferred leverage and see how much DYDX you need to short to eliminate price risk.
Since funding in the DYDX-perp Vertex market is very active, you can get paid by shorting DYDX.
All in all, there are:
- Current Vertex financing rates
- 5x leverage when shorting DYDX
- DYDX pledge annual interest rate assumption
Your APR is 31% while remaining delta neutral. Similar to earning 31% annual interest on stablecoins, but with the following risks:
- Smart contract risks (dYdX and Vertex)
- If the leverage on Vertex is set too high, there is a risk of liquidation
You can pass thisLinkCopy it to your Google Sheets account to use this calculator. Please note that this operation cannot be completed until DYDX staking goes live.
How to achieve returns with different risks in IPOR Labs
Original author: DeFi Made Here; Original link」
9% stables yield
20-50% returns on stables with ipor exposure
40% quasi-DN yield
20% risk-free ETH yield
All of the above can be achieved through IPOR Labs, which is becoming one of the most attractive farms in the DeFi field and the best place to implement complex strategies with high returns.
With the launch of v2, LPing and running liquidity mining strategies on top of Ipor becomes more attractive. Some whales realize this and move their stablecoins from the underlying protocol to Ipor to gain additional exchange fees + ipor mining incentives.
(For example, this whale is worth 650,000 DAI)
Liquidity providers can further increase their yield through pwIPOR (staking ipor). In fact, Ipor becomes a place where whales earn 20% -50% APR on stables. But Ipor offers more than just LPing, you can also run a variety of strategies to increase your returns.
The simplest way to passively obtain high returns on stables is to put LP into a pool. The annual interest rate of about 7-9% is a very competitive stables return. This strategy is the most passive and carries the least risk, but it is also the least profitable.
Yields can be further increased through pwIPOR (pledged ipor), and with just 3.8% ipor exposure, you can increase your annualized return to 18.5%.
The token value would have to fall by 80% for this strategy to be less profitable than pure liquidity mining.
Trader Nicolas (@TradingAlpinist) found that he had a soft spot for the 1,000 DAI provided by 700 IPOR pledges and entrustment. Generating a return of approximately 30% with a risk ratio of 44%. Greater risk = greater reward.
Nicolas has been trading interest rate derivatives for 27 years. He shared several more complexStrategy, such as a quasi-delta neutral position in ETH, with an expected return of 40%. The idea is to sell futures on leverage and farm a pool of stocks on IPOR to increase pwIPOR.
An easier way to earn high DN yields on IPOR is to lend USDC on Aave, which earns 8.7% APY (at the time of writing this post, it has reached 13%+), and then earns 3.3% APY Rate to borrow ETH. Then deposit ETH into the Ipor pool, and you will receive a DN annualized rate of return of 12.2% at a loan-to-value ratio (LTV) of 70%. (These yields may change over time).
With just 3.5% ipor exposure, you can increase your staking yield and generate an annualized yield of 19.1%, with a DN of 70% loan-to-value.
(USDC is 8.7% + ETH on Ipor is 13.7% - Aave is 3.3%)
Nicolas latest strategy is to cover the downside risk of ETH by buying options, and since there is no downside risk and unlimited upside, you can earn about 20% on ETH. This strategy has the greatest risk to reward ratio, but is more complex + you will be exposed to ipor.
These are just some examples of how users can leverage IPOR to maximize returns while liquidity mining. The entire protocol is more than just liquidity mining, but if you are looking for above-average stables/ETH returns, then you should check out IPOR Labs.
For more sophisticated users, Ipor is a great hedging tool. Sometimes the spread between fixed and effective rates is as little as 10 basis points. Its also a great tool for speculating on interest rates.
