Wondering where to earn sustainable, high yields on your stables?
Here are 3 places you can chill on regardless of market conditions, carefully selected based on 3 criteria:
- Minimum 20% APY for at least the next 6 months
- No exposure to small-cap farmed tokens
- Easy to understand, easy to use
Let’s get into it.
GoodGhosting
- APY: 20-40% on DAI and cUSD
- Chains: Polygon & Celo
Sources of yield:
- Lending rates on Aave (Polygon) & Moola (Celo)
- Interest earned from users who drop out from pools
- MATIC/CELO rewards
How it works:
- GoodGhosting launches a pool for hundreds of users to deposit stables every week
- The stables are lent on Aave (Polygon) or Moola (Celo)
- Some users who fail to deposit weekly exit the pool (they might’ve forgotten, or withdrawn)
- Users who stay in the pools earn the interest & MATIC/CELO rewards accumulated by the dropouts
So all you have to do is deposit weekly for a few weeks before you “win” your yield. In addition, GoodGhosting partners up with projects such as @aavegotchi & @unstoppableweb to reward pool winners with exclusive @goodghosting NFTs! These NFTs will be upgradeable the more pools you complete, while pushing your position up the GG leaderboard.
You may follow their Twitter to get notified when they launch their next pool.
dApp-specific risk: Forgetting to deposit weekly/monthly. In this case, you won’t earn any yield (it will be earned by the “winners” of the pool), but you will get your principal back.
Anchor Protocol
- APY: 20% on UST
- Chain: Terra
Sources of yield:
- Interest from borrowers on Anchor
- Staking yields on bETH and bLUNA collateral
- Anchor’s Yield Reserve
With the market downturn, many users have flocked to Terra’s most popular DeFi protocol to take advantage of its 20% yield on UST. According to DeFi Llama, TVL on Anchor has risen by $3.07b since January 31st, a 44.9% increase in TVL within 3 weeks.
However, only 18.4% of Anchor’s $9.9b TVL is currently being utilized by borrowers. With more demand from savers than borrowers, Anchor’s yield reserves have declined by more than 80% from $70m on Dec 29th to $13.1m on Feb 9th, according to Mirror Tracker.
To keep yields for savers at 20%, Luna Labs has infused $450m to Anchor’s Yield Reserve. As outlined by n3mo from Hashed, it’s a temporary measure to bootstrap TVL on Terra before Anchor implements its proposed long-term solutions to sustainability, including:
- Implementing its v2 borrow model
- Adding more collateral types to attract other borrowers and staking yields
- Earning yield on un-utilized UST through other DeFi protocols
Nonetheless, if you’re comfortable with holding UST, Anchor’s yield reserves should satisfy demand from savers, and is still a viable option to earn 20% yield for the next 6 months.
Abracadabra MIM Degenbox
If the two positions above aren’t degen enough for you, you can leverage on your Anchor position by using Abracadabra.
A strategy that needs no introduction, you essentially:
- Deposit UST on Ethereum as collateral on Abracadabra to mint and borrow MIM
- The borrowed MIM will be converted to UST and deposited to Anchor to earn the 20% yield
- Repeat the loop
Warning: Due to high gas fees from flash loans and exits, only consider this if you intend to deploy a 4-5 figure UST position for a few months.
Potential Risks:
- Liquidation if MIM or UST depeg
- And, of course…
Honorable mentions:
There are several other attractive positions on stables on the following protocols:
- Tempus: 9.5% fixed APR on DAI (Fantom)
- Pangolin: 19% APR on UST-USDC (Avalanche)
- ProtoFi: 18.8% APR on MIM-USDC (Fantom)
However, do note that Pangolin and ProtoFi LP positions are highly exposed to native tokens farmed from liquidity mining. The yield APRs are based on figures as of 25th Feb. You can find more potential opportunities on this Excel by snips.
Another honorable mention for bearish ETH hodlers is an ETH-USDC LP position on Uniswap V3 (now also on Polygon). You can provide pure USDC liquidity at a range below the current ETH price - a price range where you are comfortable buying ETH at (i.e. a range of strike prices).
When the price of ETH enters your range, you are effectively swapping USDC for ETH. The key difference is that you’re simultaneously earning transaction fees from Uniswap.
Not sure what range to set your LP position at? Here’s a guide.
Be safe out there!
Disclaimer: This article is purely informational, not financial advice. Users are obliged to do their own research before committing any capital to the DeFi protocols above, realising any risks associated, including smart contract exploitation and stablecoin depegging. LongHash Ventures is also an investor in GoodGhosting.