Defi Farm #24 - October 9th Weekly Update

ABY - always be yielding

Author

Andy Page
October 09, 2022

Hi everyone,

Welcome to the 24th weekly edition! Let's dive in 🤿Over the past 7 days:SPY: +0.47%BTC: +1.0% ETH: +1.1% 

Major L1's:SOL: +1.9%AVAX: -0.2%Near: -0.9%Algo: -4.7%FTM: -1.0%

Today I'll go over:- Exploring UniV3 positions part 2- Interesting news from this week- Cool projects and protocols I came across this week- Defi farm of the week

Exploring UniV3 Positions - Continued

Last Sunday I put some USDC and GMX into the Uniswap 1% fee pool on Arbitrum.

When I entered the pool, GMX = $38.48 and I set a price range of roughly +/- 30% ($26.90-$50).

Throughout the week, GMX actually went live on FTX and Binance which caused some insane volatility. GMX ranged from $36-$54. My position was out-of-range for about half a day during the week but I keep it, untouched. This morning GMX is at $46.98.

Because there was so much volume on GMX across all chains this week, the APR for this farm was pretty high + volatile, it ranged anywhere from 95% - 210% APR. It averaged out at 142.48% or 2.74% for the week. Those rewards were paid out in equal parts USDC and GMX.

This all sounds great and I'm not complaining but just remember the effects of impermanent loss. If I were to withdraw the GMX-USDC today, I'd have a lot more USDC than I deposited and a lot less GMX.

I'm still up on my position but because GMX had such a great week, it would have been better to just hold USDC and GMX in my wallet. When I entered the pool, I was effectively slowly DCA-ing out of GMX on the way up. The farm rewards have yet to make up for what I would have had if I had just held in my wallet.

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So what benefits come with farming and entering LP positions on DEX's?

In my opinion, farming is all about risk mitigation over a longer time frame. Farming gives you the ability to passively DCA into and out of positions while also earning yield (income) that can further mitigate the risk of those positions and the risk of impermanent loss

Interesting news and things from this week

Some cool stuff happened this past week. Here is just a small sampling.

Interesting protocols/projects I found this week

Noxx (link) - a new payroll tool that enables companies to hire pseudonymous talent and still be legally compliant. This is incredibly cool! It will be interesting to see if pseudonymous talent is a trend that continues.

Interesting protocols/projects I found this week

With ETH gas prices remaining low, I would recommend people consider checking out yield opportunities on ETH mainnet.

There are a few pools in particular on Convex that I think are worthwhile right now.

The ETH+stETH pool is paying 6.36%, tricrypto2 (USDT+wBTC+wETH) is paying 12%, staking CRV to cvxCRV earns 15% APR. While these yield numbers aren't the highest around, that yield is being paid in quality tokens.

Things to be careful of:ETH fees are still expensive when compared to other chains. You probably don't want to be claiming your rewards too often.

Some pools have pretty low liquidity just make sure you look at that before entering a pool.

That's all I have for this week! Stay safe out there and as always, stay yielding!

If you ever want to chat with me and nerd out about defi/web3, I made some time available on my calendar each week. Feel free to schedule some time!

-Andy