8
Hey again folks, there’s a ton of people that are still calling for $BTC to drop a lower low which means we most likely won’t be coming out of this bear market any time soon. And if you’re like me, you might be trying to find safe places to park your stables in order to buy whatever dips may be coming down the road. The definition of “safe” has drastically changed over the past few months as there’s been a lot of FUD since the UST/Celsius/Voyager collapses, so if you have a strong aversion to even the likes of $USDC or $USDT, then well…you might be running out of options here except to just hold onto fiat.
For the following strategies I’ll be covering, they all meet the following criteria:
- No algorithmically-backed stablecoins: I know that there are some great algo-backed stables out there generating some crazy returns, but after the Terra death spiral, it will be some time before I trust anything that’s linked algorithmically again.
- No lock-up periods: If you’re looking into earning into the 20%+ APY range, I highly recommend that you check out my previous articles on platforms such as Freeway or Haru Invest where you can earn significantly more if you agree to lock-up your funds for 30+ days.
- The protocol pays out in the native asset (stablecoins, not in alts): I know there’s some great returns that can be had with platforms like echnida or platypus finance, but the rewards from staking are all in altcoins, which are too volatile in price, especially in a bear market.
With these factors in play, I will breakdown the following protocols and try my best to identify the pros and cons of each so that you hopefully might be able to make a better decision for where you want to park your stables as you’re waiting this bear market out. In no particular order we have:
Overnight.fi — Up to 12% APY
Overnight.fi is stablecoin protocol that utilizes other stablecoin protocols, mores specifically with USDC, USDT, and DAI. Their main chains are on Polygon and Binance, but more recently they have added Avalanche and Optimism. Overnight.fi is very transparent and you could technically utilize the same strategies that they do which are all made public:
All of their smart contract addresses are publicly available through their whitepaper and they were also audited by earlier this year. Essentially how Overnight.fi works is that you swap $USDC for $USD+, which will automatically rebase your yields on a daily basis for as long as you hold your $USD+. $USDC/$USD+ can be swapped either way directly on the DAPP.
The average USD+ APY can vary, and it can vary significantly, ranging over the past month from around 4–11% APY on Polygon, around 5–33% APY on BSC, and 5–14% APY on Avalanche, and 2–36% on Optimism. Because these ranges vary, it’s important to check out the average USD+ APY that’s neatly listed out for each chain:
Currently the chain that has the highest average yield for the past week is BSC with 12%, but you can see in the graphic above that if you zoom out to the monthly average, it’s even higher at 14.5% APY.
: Overnight.fi is relatively easy to use, their strategies are transparent, and the rebasing mechanism is genius — it means no gas fees wasted and nothing to keep track of except how many tokens are in your wallet.
: The rates can vary a lot and are not fixed. Some days you might have stellar returns of 20%+and others you might have below 4%.
Ref. Finance — Up to 13.73% APY
Ref Finance is by far the most widely used DeFi protocol on the Near blockchain, and the most popular farm on Ref Finance is the USN-USDT liquidity pool, where by staking $USN (the Near network’s native stablecoin) with $USDT, you can earn nice APR directly back mostly in $USN plus a small (0.18% APY) portion in the platform’s $REF token.
If you’re unfamiliar with $USN, originally when it was first launched it was only partly backed by $USDT, with the rest being backed by $NEAR itself, but starting in July with their start of $USN v2.0, they made a move to completely back $USN with $USDT:
: $NEAR is heavily VC backed and seeing how well it’s stuck around for the bear market, it’s most likely not going around anywhere. Ref Finance has also been audited twice, with the most recent report from June 2022
: Getting $USN can be quite a challenge if you’re unfamiliar with the Near network, and it involves bridging your $NEAR and creating a Near wallet. Also, it’s undetermined for how long these high APR’s will last, as they were only supposed to last until the end of August. But to date, the APR’s are still there and has a lot of TVL locked.
Midas Investments — Up to 14.7% APY
Out of all the strategies I’m listing in this article, is the only platform that I’m listing that’s a non-custodial platform, for as far as I know, they’re the only one that is offering 11.6% APY in stablecoins (if you want your yield paid out in native stablecoins) or 14.7% APY if you’re wanting to get paid out in their native $MIDAS token — all without any lockups. There are other CeFi platforms that are offering more, but they all require varying lock-up periods.
I’ve written about Midas several times before, and they’re also the platform that I trust, having been around for more than 4 years and surviving multiple bear markets. If you’re interested in reading a full in-depth review, I’d recommend reading about my analysis of their first investments report or else my review on the $MIDAS token itself
: Out of all the strategies I’ve listed, Midas has definitely been around the longest and they’ve shown stellar results while at the same time pivoting responsibly through whatever the market condition may be, while having little impact on their yield rates.
: Because it’s a CeFi platforms, if it’s “not your keys, then it’s not your crypto.” That being said, I’ve scoured through different user reviews and no one over the past 4 years has ever had their funds locked up, and transparency about how they generate their yields has been increased as they are now regularly publishing monthly investment reports.
Beefy.finance — Up to 12% APY
There are several different liquidity pools on Beefy.finance that are currently generating great returns, including their USDC/BUSD/USDT vault on Fuse
And their DAI/BUSD/USDC/USDT Vault on BNB
If you’re unfamiliar with Beefy.finance, they are a self-described “Multichain Yield Optimizer” where you can easily access liquidity pools to more than 15 different blockchains. Where Beefy.finance really shines is that you can “zap” into any LP and then auto-compound in that same native LP token. In other words, Beefy.finance automatically takes whatever rewards you gain from the LP and reinvests back into that same LP pool. The way that Beefy.finance makes money is that they skim a bit off the top as a “performance fee.”
There’s a few considerations that you should take when using Beefy:
- Look at the historical rate of returns to track volatility. There are some pools that might look great, but the pool itself could just be experiencing a temporary spike in activity.
- Check out the TVL because that will give an indication of how sustainable the yield rates might be. If you compare the two LP’s I’ve outlined above, with a TVL of more than $1 Million, the DAI/BUSD/USDC/USDT Vault will probably be a lot more sustainable long term than the USDC/BUSD/USDT vault on Fuse that only has a TVL of $60k.
- Each pool has a “safety score,” and Beefy will help you breakdown where the APY’s and also outline whether or not the contract(s) are audited.
: The Beefy team has been evolving quickly, constantly adding new projects and chains in order to allow users to access countless numbers of liquidity pools, that and their ‘Zap” feature makes the whole process easy and quick to get in and out of each pool.
: The APR’s can be quite volatile, so if you want to sustain higher APR’s every day, it might take a bit of extra effort checking in on the rates. A greater than 10% APY can go down to 1.38% overnight:
Runner-up: Zunami Protocol (Up to 12.77% APY)
Zunami Protocol is a “yield aggregator” similar to Overnight.fi, but it uses different strategies, namely the $USDD Pool, $PUSD Pool and $MIM Pool on Convex finance. Essentially you can deposit BUSD/USDT on BINANCE or DAI/USDT/USDC on the Ethereum network and they will batch deposits together for DeFi protocols, saving on gas fees in the process.
They’ve had some pretty high and consistent APY’s since their inception, but the reason why I listed them as a “runner-up” is because I’m still a bit skeptical of their main strategy — $USDD. $USDD is technically an overcollateralized stablecoin like $MIM, but from what I’ve gathered, somewhere down the roadmap they’re still planning on making it work on a minting/burning algorithmic-method like $UST/$LUNA. This on top of the prolonged depegging situation that happened back in June, just makes me a little bit wary:
However just like Overnight.fi, I think Zunami really has a good thing going and I imagine that yield aggregators such as these will just continue to grow as they can easily help simplify the DeFi space for new users.
Conclusion
If you’re like me, the $UST collapse and completely changed the way I look at stablecoins, and it’s made me very risk adverse to crazy-high yields. Yet now that the majority (hopefully) of the tide has rushed out of this bear market, it’s a great indicator for me to see that the projects still left standing are being smart and risk adverse, while at the same time allowing people to still earn pretty solid returns.
Hopefully you’ve discovered a new protocol to capitalize off of and if you’ve heard of any others that aren’t listed here, please drop me a comment below because I’d love to check it out. If you’re interested in digging for more stablecoin opportunities with disregard to my low 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 out there.
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.
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!
