Hey folks, it’s been a long while since I’ve given a stablecoin update, but with all the excitement that’s going on over at Base, I figured that it’d might be informative and helpful to talk about some of the stablecoin plays that are available out there. With all the strategies I’ll go over, you’ll notice some themes including:
- They all have exposure to a wildly inflationary altcoin
- The LPs across all protocols involve pretty much the same LP-pairs, including USD+/USDC, USD+/DAI+, and/or MIM/USDC.
- All of the rates are very volatile
And as I’ve done in my other stablecoin articles, I’m going to attempt to breakdown what I see are currently the most lucrative strategies, as well as all of their identified pros and cons. However before I get into it, I must make doubly clear that I am not invested in any of these strategies because I find them a bit too risky. Why you might ask?
Before we get started, a bit of a primer and disclaimer…
Base is really hot right now
Just in case you’ve been living under a crypto-shielded rock for the past month, Base is a layer-2 OP-stack that’s really the hottest thing since sliced bread. Having gone live just a few weeks ago, Base has shown some crazy growth, amassing almost $160 million in TVL:
Bots or no, last week Base hit nearly 136k active users, making it rival other Etherum layer-2s, falling right behind Arbitrum and Optimism:
All this being said, with all of the strategies that I’m going to outline please keep in mind that many of these platforms are newly deployed, and haven’t stood the rigorous testing of time as some of the OG platforms have on other chains. I am not a dev and don’t have the slightest clue how to read/audit smart contracts, so if you’re going to ape into any of these strategies, please do so at your own risk.
BaseSwap: Up to 22% APR
Starting with the protocol with the most amount of TVL, Baseswap, a fork of Uniswap V2, has three attractive farms including a MIM/USDC pool as well as two that contain Overnight.fi stablecoins including a DAI+/USD+ and a USD+/USDC pool. For these strategies it’s important to consider that you’ll have significant exposure to the $BSWAP token, unless you decide to go through Beefy.finance’s autocompounder. The $BSWAP token hasn’t been doing too well in price action, and the historical rates these strategies reflects this:
As shown in the graph above, it’s doubtful that the rates on these vaults will last for long, so it’s probably a good idea to keep an eye on your stables until a better option arises.
What makes these pools particularly attractive is that they have really healthy levels of Liquidity, each one having more than $1 million in liquidity. BUT, before you go aping in, the next option has even higher rates and even more attractive TVL in their pools…
Swapbased: Up to 86% APR
Swapbased is Base’s 2nd largest protocol, but with only roughly a third of the TVL. This doesn’t mean that you should sleep on Swapbased however because apart from the insanely high yields, the TVL for each LP is quite large as well too.
Similar to Baseswap, you’ll be exposed to the protocol’s native token $BASE, unless you go through Beefy.finance to get your yields compounded. The historical rate of returns on these are also pretty grim, but when you can autocompound for more than 100% APY, one could argue that it doesn’t really matter:
The metric that really caught my eye with Swapbased is how much they’re bleeding token emissions. From the top of their site, they advertise:
You don’t have to be a math wizard to know that $2.4k a day in fee generation is way under than the $50k in $BASE that they’re giving out every day. Sustainable? Definitely not.
Alienbase: Up to 764% APR (not a type-o)
Alienbase is the newest out of the group and has the most astronomically crazy high returns. These pools will give you exposure to the platform’s native $ALB token, which since its release, has seen a crazy amount of price volatility and sell action:
Because this platform is so new, as far as I know during the time of writing there is not autocompounding vault where you can try to minimize your price exposure to $ALB. In addition, as long as there’s insane yields to be had, I imagine that there’s going to be a continued rise in Alienbase’s TVL as well as continued crazy price volatility for the $ALB token.
Velocimeter: Up to 155% APY
Last but not least we have Velocimeter, which is the only Solidly fork on the list. If you haven’t used a Solidly fork before, you’ll notice in the graphic above that there’s ranges for the APR’s that denote how much you can earn depending on how much $BVM/veBVM you have staked.
Even though the historical rate is still pretty volatile, relatively speaking it perhaps has one of the more stable yields which you can also take advantage of on Beefy.finance:
Granted the biggest drawback for this strategy is the relatively low TVL, with the highest yield LP you can utilize (USD+/USDC vault pictured abvove) on Beefy only has around $100k in liquidity, $43k of which is on Beefy.
Without using Beefy, your LPs on Velocimater will give you exposure to the $oBVM token, which also has shown a significant amount of volatility in it’s short lifespan:
Once again, as enticing as these yields might be, if you do decide to ape into any of these strategies, I would be greatly wary about the price volatility of any of the altcoins you might be exposed to, and also I would keep in mind that these LPs are all extremely new and haven’t had that much time exposure.
If you’re interested in digging for more stablecoin opportunities with no lower risk parameters (no algos, no lock-ups, no altcoins) I’d recommend checking out stable.fish — a great compiled list of any LP involving any stablecoin out there. They don’t have their stats updated in real time, but it will give you a really good picture of what’s possible.
And as always, thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!
Disclaimer: And as a final reminder, this is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you. Cheers everyone!
