Bear Market Stablecoin Financial Management Review: Where Can You Get High Returns?

DeFi has made great progress in the past two years. Now, even when the market is not good, many people will not completely withdraw from the crypto market, but choose to hold Stablecoin. But for some DeFi newcomers, it has always been a headache to let Stablecoin bring them a considerable fixed income. In the following, the editor of Rhythm has sorted out several popular Stablecoin Farming strategies for you:

Money Lego: Yearn + Abracadabra + Curve

Yearn, Curve, Aave and other OG protocols are the first projects that people think of when mentioning DeFi, but in terms of Stablecoin income, they have become very "boring", and many Stablecoin Farming pools now have an APY of around 4%, and basically no more than 10%. Although this is already very attractive compared to ordinary bank interest rates, as DeFi, they have not yet fully realized their "degen" potential.

Abracadabra is a cross-chain lending platform that allows users to use their income assets as collateral for lending. Through Abracadabra, we can fully utilize Yearn and Curve to achieve compound interest. This article provides three strategies for everyone. For the sake of unity, we take USDC as an example:

Strategy 1

First, deposit USDC into Yearn Vault and receive an equal amount of Token yvUSDC. USDC deposited in Vault can earn around 3% APY.

Next, go to Abracadabra.money, pledge yvUSDC and borrow the corresponding amount of MIM Stablecoin. Of course, we need to pay a 0.05% fee and 0.8% interest per year. Also pay attention to the maximum pledge-to-borrow ratio in the red box, which varies depending on the currency.

Then go to Curve and exchange MIM for USDC again. In this way, while maintaining 90% liquidity, we can still get 2% APY, which is basically free.

Strategy 2

If you feel that the above strategy is not profitable enough, you can keep the borrowed MIM and deposit it into the MIM pool on Curve. In addition to the 0.25% APY, you can also get CRV Token with an APR of up to 9.35%, plus SPELL Token with an APR of 0.13%.

Strategy Three

This strategy is called "9,9" by many DeFi degens. After we exchange MIM back to USDC, we can deposit it into Yearn Vault again to get more yvUSDC and use it to borrow MIM. Through repeated loops, we can get higher compound interest APY.

The example in the figure is USDT

Alchemix

Alchemix is ​​a very popular stablecoin protocol on Ethereum. The amount owed by users on the platform will automatically decrease along with the protocol’s earnings on Yearn.

First, we need to deposit a certain amount of DAI as collateral, in return we can get an APY of about 7%.

We can then lend out the Alchemix platform's Stablecoin alUSD, with a maximum collateral-to-loan ratio of 50%. As the text in the red box indicates, the APY earned by the user's deposit will be automatically used for repayment.

After lending alUSD, we can also exchange it back to DAI and repeat the above steps to obtain compound APY.

ProtoFi

Of course, the several strategies mentioned above need to be operated on Ethereum. For ordinary users or DeFi newcomers, the gas fees are too high. Therefore, it is more reasonable to look for Stablecoin Farming strategies in the relatively cheap public chain ecosystem.

ProtoFi is an AMM and Farming protocol on Fantom, which has been quite popular recently. The protocol uses a dual-currency system to allow users to become owners of the protocol while reducing the selling pressure of the native token.

ProtoFi has three different Farming pools: Nucleus, Fusion, and Particle. First, we need to find a Stablecoin LP pool in Fusion. In this article, we choose the MIM-USDC pool. After providing liquidity to the pool, we will receive PROTO Token in return, and the current APR is about 40%.

After obtaining a certain amount of PROTO, we can go to Nucleus and provide liquidity for the PROTO-USDC pool. In return, we get ELCT Token, and the current APR is about 825%. Of course, since PROTO is not a stablecoin, users face the risk of impermanent loss.

But the more innovative thing about ProtoFi is that users can get a part of the future income of the protocol through ELCT. Click Fission and deposit the obtained ELCT to earn DAI or wFTM. The current APR is 200%.

It should be noted that ProtoFi uses a mechanism called Quantum Supply. The release ratio of PROTO will be continuously adjusted according to the market value/TVL to control the selling pressure in the market.

Anchor

Anchor is probably one of the most used strategies. Its Stablecoin APY has amazing stability and has remained at around 20% over the past year. Therefore, it is considered by many to be the most suitable yield strategy for DeFi newcomers. Anchor has the following three main application methods:

Directly stake UST

This method is the simplest and safest. Just deposit your UST directly into Anchor and earn 20% APY.

Liquidity Staking LUNA

If you don’t have UST but have LUNA, you can first pledge your LUNA on Lido and get an equal amount of bLUNA, earning an APY of about 9%.

Then deposit bLUNA into Anchor and borrow UST. Anchor now encourages lending, so the UST you borrow will also earn you additional APY.

After depositing the borrowed UST again, you can get a higher compound interest APY.

Degen Box

If your UST is on the Ethereum mainnet, there is a more degen farming strategy. Abracadabra provides a lending strategy called "Degenbox", which can automatically convert the borrowed MIM into UST and deposit it into Anchor, and continuously loop.

After depositing UST as collateral, click "Change Leverage" to adjust the borrowed leverage according to your needs. The protocol will then automatically deposit the borrowed assets into Anchor to earn APY. As you can see, by increasing the leverage, the APY obtained by users can far exceed the original 20%.

How to capture the best APY?

DeFi updates and iterates very quickly, with new protocols appearing almost every day, so the flow of funds is also rapid. Perhaps a strategy that can still get a high APY today will no longer be so attractive a month later, so the ability to find and track the current best strategies is particularly important. This article provides the following two methods:

Beefy Finance

Beefy Finance is a multi-chain yield optimizer that allows its users to earn compound interest on their crypto assets and convert them back to the original tokens staked by the users. Through a series of investment strategies protected and executed by smart contracts, Beefy Finance is able to automatically maximize users' yield opportunities in various LP pools, AMMs and other DeFi projects.

First, select the public chain you want to use.

Then look for Stablecoin yield strategies with higher APY in Vault. As shown in the red box, some strategies may receive a Boost from the protocol and thus receive a higher APY.

Coindix

Coindix is ​​a website that monitors DeFi returns in real time. We can also find the Stablecoin return strategies with the highest returns on each chain.

After going to the Coindix website, you can select different public chains in the top bar, select specific protocols in the left column, and select different asset profit strategies in the middle.

For example, the current MIM and UST Curve pools on the Ethereum mainnet have very good returns.

The top Yearn also uses the Curve MIM-UST LP pool

In terms of overall returns, the current Stablecoin strategy with the highest returns is still Fantom. However, it should be noted that the TVL on the right side of the red box is that some strategies can provide high APY due to low TVL, but as more funds flow in, the TVL will naturally drop.

The above are some of the currently popular Stablecoin profit strategies, as well as methods to find the current optimal strategy. I hope it can be helpful to everyone.