DeFi track is active again, one article summarizes the on-chain revenue strategies of Degen people

Reviving DeFi track An overview of on-chain revenue strategies implemented by DeFi enthusiasts

Sommelier Finance‘s three new staking pools, DYDX Delta neutral staking arbitrage, and IPOR Labs’ returns in different risk profiles.

Editor’s note:

Sommelier Finance is a protocol built on the Cosmos blockchain, aiming to expand the capabilities of decentralized finance based on Ethereum. The project currently offers two main services – liquidity mining and algorithmic trading strategies. Users simply need to choose one and lock their funds in the staking pool to earn returns. Crypto DeFi KOL Emperor Osmo (@Flowslikeosmo) has written an article introducing several new staking pools in Sommelier.

dYdX V4 mainnet is about to go live, providing native DYDX staking and yield distribution. DeFi researcher Thor Hartvigsen (@ThorHartvigsen) has built a calculator to estimate DYDX staking returns and APY.

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IPOR Labs aims to help mature DeFi money markets by building interest rate derivative financial tools, achieving standardization of interest rates across the industry. IPOR stands for Inter-Protocol Over-block Rate and is an intermediate market rate determined by block-to-block sources. Crypto KOL DeFi Made Here (@DeFi_Made_Here) has written an article exploring how IPOR Labs achieves different risk-profiled returns.

BlockBeats has compiled the above three tweets about DeFi protocol returns for readers to study, as follows:

Analyzing Sommelier Finance’s three new staking pools

Original author: Emperor Osmo, “Original article link“

The fastest-growing yield aggregator on the market is Cosmos App Chain. Sommelier Finance has been maintaining significant growth momentum with a TVL of over $40 million.

I previously discussed the significant growth prospects for Sommelier this year. In the past month, they have launched new staking pools with significantly higher returns, which has fueled this growth. Now, let’s delve into these strategies.

1. Real Yield ETH (APY 11.06%)

This staking pool, created by Seven Seas and Define Logic Labs, maximizes ETH returns through:

– Leveraged collateral on Aave
– In addition to Compound and Morpho, it also involves providing liquidity of ETH collateral tokens on Uniswap V3.
– 2. Turbo stETH (10.23% APY)
– StETH is a highly liquid cryptocurrency asset that allows for pool collateral:
– Use various dynamic strategies such as leveraged collateral.
– Utilize CL terms on DEX.
– Create arbitrage opportunities between LST-ETH hooks to optimize users’ ETH returns.
– 3. Turbo GHO (APY 3.00%)
– This collateral pool utilizes Aave’s over-collateralized stablecoin GHO. The goal of this insurance pool is:
– Pair LP with GHO on Uniswap V3.
– Pair with USDC, DAI, USDT, or LUSD.
– This allows users to generate substantial returns through stablecoin pairs.
– Sommelier Finance’s growth has translated into more collateral pools, which also bring more fees to the collateralizers. Fees generated by SOMM collateralizers have been steadily increasing.
– This is the result of achieving a good product-market fit. Users desire to earn returns through alpha assets like ETH, and Sommelier provides them with secure strategies to achieve this goal. For all stakeholders, this is just the beginning of a profitable journey.
– DYDX neutral collateral arbitrage (20-30%+ APY)
– Original article by THOR HARTVIGSEN: “Original Link”
– I’ve built a calculator to estimate DYDX collateral yields and APY (if you hedge this risk by shorting DYDX on Vertex).
– 1. What is the annual interest rate for DYDX collateral?
– First, we need to estimate how much of DYDX’s total circulation will be collateralized. Here are some other perps for comparison:

SNX – 58% Staked

GMX – 74% Staked

GNS – 73% Staked

On average, it is estimated that 68% of the DYDX supply will be staked. How about the fees allocated to the stakers? Assuming all fees are allocated to the stakers and using the annualized fees from the beginning of the year to date, we get:

The annual allocated fees amount to $79 million (assuming no growth, so assuming a small scale) This results in a staking annual interest rate of 26.4% – pretty crazy!

But now we face DYDX price risk. So let’s go further:

2. Short an equal amount of DYDX on Vertex

Vertex is a cross-margin order book and AMM trading protocol that recently added DYDX-perp.

Using the calculator below, you can choose your preferred leverage and see the amount of DYDX you need to short to eliminate price risk.

Since the funds on the DYDX-perp market on Vertex are very active, you can earn rewards by shorting DYDX.

In summary, there are:

– Current Vertex funding rate

– 5x leverage when shorting DYDX

– Assumption of DYDX staking annual interest rate

Your annual interest rate is 31%, while maintaining Delta neutrality. Similar to earning a 31% annual interest rate through stablecoins, but with the following risks:

– Smart contract risk (dYdX and Vertex)

– Liquidation risk if leverage on Vertex is set too high

You can use this link to copy it to your own Google Sheets account for use with this calculator. Please note, this cannot be completed until DYDX staking goes live.

How to achieve different risk-return profiles on IPOR Labs

Original author: DeFi Made Here; “Original article link“

9% stablecoin yield

20-50% stablecoin yield with IPOR exposure

40% quasi-DN yield

20% risk-free ETH yield

All of these can be achieved through IPOR Labs, which is becoming one of the most attractive farmers in the DeFi space and the best place to implement high-yield complex strategies.

With the launch of v2, LPing and running liquidity mining strategies on Ipor have become more attractive. Some whales have realized this and moved their stablecoins from underlying protocols to Ipor to gain additional swap fees + ipor mining incentives.

(For example, this whale is worth 650,000 DAI)

Liquidity providers can increase their yield further through pwIPOR (pledging ipor). In fact, Ipor becomes the place for whales to earn annual interest rates of 20%-50% in stables. But Ipor offers more than just LPing, you can also run various strategies to increase returns.

The simplest way to passively earn high yields in stables is to deposit LP into the pool, with an annual interest rate of about 7-9%, which is “very competitive”. This strategy is the most passive and lowest risk, but it also has the lowest profit.

Yields can be further increased through pwIPOR (pledging ipor), and with just a 3.8% ipor exposure, you can raise the annual yield to 18.5%.

This strategy would become less profitable than pure liquidity mining only if the token value were to drop by 80%.

Trader Nicolas (@TradingAlpinist) found his special attachment to staking 700 IPOR, providing 1000 DAI, producing a return of about 30%, with a risk ratio of 44%. Greater risk = greater return.

Nicolas has been involved in interest rate derivatives trading for 27 years. He shared several more complex strategies, such as ETH quasi-Delta-neutral positions, with an expected return rate of 40%. The idea is to sell futures on leverage and farm stock pools on IPOR to increase pwIPOR.

One way to easily obtain high DN yields on IPOR is to lend out USDC on Aave, with an annual yield rate of 8.7% (which has reached 13%+ at the time of writing), and then borrow ETH at a 3.3% annual return rate. Next, deposit the ETH into the Ipor pool and you will receive a DN annual yield of 12.2% at a loan-to-value ratio (LTV) of 70%. (These yields may vary over time).

With just a 3.5% ipor exposure, you can increase your pledge yield and generate an annual yield of 19.1%, with a loan-to-value ratio of 70% for DN.

(USDC at 8.7% + ETH on Ipor at 13.7% – Aave at 3.3%)

Nicolas’s latest strategy is to compensate for the downward risk of ETH by purchasing options. With no downside risk and unlimited upside potential, you can earn approximately 20% on ETH. This strategy has the highest risk-reward ratio, but it is more complex and you will also be exposed to ipor.

These are just some examples of how users can maximize their returns while participating in liquidity mining using IPOR. The entire protocol is not just about liquidity mining, but if you are looking for above-average stables/ETH returns, then you should check out IPOR Labs.

For more experienced users, Ipor is a great hedging tool. Sometimes, the spread between fixed rates and actual rates is as low as 10 basis points. It’s also a good tool for speculating on interest rates.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!