Egggg yolk, what is going on with my people, the Chico Army and if you're new around these
parts, a viewer of the tubee!
My name is Tyler the host of the crypto channel, that knows when you get famous, you can’t
just become a total creep, unlike Chris D.Elia…you know how we don’t snap DP’s, it time for
Chico Crypto!
The new way to make those “gains” in the crypto markets.
I’m sure you have heard about it, seen some of the memes on the crypto subreddits or on
crypto twitter.
What am I talking about?
Yield farming to maximize your crypto ROI.
Now one of the most popular memes, is this one, which does a good job of explaining yield
farming crypto.
You have the virgin trader vs. the chad yield farmer.
Virgin trader, does single swaps, looks for moon coins, uses centralized exchanges, and
buys their exchange tokens, while watching charts all day and trading BTC/USD.
While the Chad Yield Farmer is looking for healthy APRs, does multiple token swaps in
a single transaction, uses DEXs, earns governance tokens, plants tokens, and farms with wBTC..we
aint using tether her on Chico.
So, basically a yield farmer, is someone who is knowledgeable about DeFi.
You have to be, to understand DEXs, token swaps, collateral, dapps & more.
And they use that knowledge, to turn DeFi into a Return on investment maximizing machine.
So, I’m not going to recommend any of you, to try and dive into the world of Yield farming,
if you are a newbie.
You should learn about all the DeFi lego’s first, which my channel has a ton of content
on, stablecoins, DEX’s, tokensets & more.
I have made a DeFi playlist going through all my old videos for you guys, so check out
that playlist first, read from other sources and understand, before trying to become a
CHAD.
So, 1st thing’s first...Compound, we have to talk about their new token & governance..as
they were the spark which kicked off this yield farming craze.
. Compound over the past 5 days, has been moving up, down & all around.
Peaking above 370 dollars per for some time, and putting it’s market cap above 1 billion,
but since has come back down, touching 230, before bouncing back and pushing back up to
260...and now the market cap is around 630 million.
Now, I know the Coinbase pro listing, and all that has something to do with the pump,
but compound’s token governance and issuance, is something special & it kicked off a craze
in the space, pushing compound as the #1 DeFi protocol on DeFi pulse, dethroning Maker...so
we gotta understand it.
Out of the 10 million created COMP tokens, nearly 4.3 million of them are reserved for
something called liquidity mining.
So kind of like how bitcoins are mined and new coins are created, compound will be issuing
new COMP tokens to those who contribute liquidity to the protocol.
Right now, about 3000 COMP tokens, are issued everyday, at a rate of about .5 comp, per
ethereum block.
The emission and reward is split 50/50 to each functional pool of compound, the supplier
pool and the borrower pool.
This emission will go on for about the next 4 years.
So, right now, there is a massive incentive to use compound, to supply and borrow, of
which you earn COMP governance tokens for, which are still in price discovery mode.
Why do you think, the total value locked in compound went ballistic?
Over 6xing in the span of a few days!
Going to compounds website, we can see, out of this value locked up it’s split between
a supply and borrow pool, of which the supply side is much larger than the borrow side,
with many more individual suppliers than borrowers.
Over 7 times more suppliers than borrowers, actually.
So remember, compounds COMP tokens, the reward is split, 50/50 between the two sides, thus
borrowing on compound, you have the ability to get a much higher percentage of the liquidity
mining rewards.
Split between over 26 thousand people, or split between just over 3500...I would take
the latter on the borrow side, but why don’t we just do both?
So, let’s just see what we could do, with a Chico version of yield farming.
Well, we wan’t to earn those sweet compound tokens, and to do this you can’t just supply
or borrow tokens, that aren’t being used much in the protocol, if you wan’t receive
a bulk of the rewards, you have to be in the “hot” tokens
So going to compound’s stat’s we can see the highest percentage, on both supply and
borrow APYs, are basic attention token, zrx, and wrapped bitcoin.
These are where higher percentages of comp are being paid out.
So our first step in yield farming...will we start at compound?
Nope, we go to the DeFi lego container, and pick out the best piece for ROI.
As we can see, from DeFi rate, which puts together all the protocols and their supply
and borrow apys together in one place...Aave, we can borrow, wBTC for just 7.18 percent.
Then changing to supply APYs, we can see that there is 16.99 percent APY, for lending it.
Hmmmm?
So let’s do it.
Let’s borrow wBTC from Aeve...to borrow on Aave, you need to put down some collateral.
And the collateral we wan’t to put down, is something that is getting a healthy APY
on that platform, and stays stable.
We will choose Dai, as it is getting a great 3.84 percent APY...we are just going to do
a small amount for an example, just over 82 dai and once deposited into Aave, you need
to make sure the use as a collateral slider is slid over to green.
The next step, is to go to the borrow section and here is a pure example of how crazy, these
yield farming protocols are.
So I was preparing this video and script, and was able to get my Stable APR with Aave,
by borrowing wBTC at 11.98 percent stable APR, I submitted the transaction.
Literally right after this, the APR’s jumped, both variable and stable...as we can see,
stable jumped from that 11.98 percent up to 38.14 percent, and variable jumped from the
7.18 percent to 28.94 percent.
Now when I submitted my transaction, I had a choice variable or stable.
And I knew this crazy stuff was going to happen, so I went with the stable one, even though
the rate was higher, nearly 4 percent.
But if I chose a variable, my low rate of 11.98 percent would not have been locked,
and I would have jumped with variable rate jumping….wheeeww timing!
So now we have borrowed wBTC on Aave, put down 82 dollars in Dai, and was able to get
as we can see, .00634 WBTC, with a locked in borrow rate of 11.98 percent.
Now, it’s time to go lend it, where we can get the best returns.
DeFi Rate told us compound, so let’s go there.
As we can see our borrowed wbtc is there, the rate has dipped a bit, to 16.33 percent
but that is still above our borrow of 11.98 percent on Aave.
So let’s click on it, and first we need to enable.
I’ll do that...once confirmed, we need to supply, clicking on Max put’s our whole
balance up for supply, which i want to do.
Clicking supply, I need to wait for the transaction to confirm, and once confirmed it will just
take you back to the home screen.
We can just go back to the dashboard, to see our supply balance, with our wrapped bitcoin,
the .00063, earning 16.33 percent apy.
And we are also earning.
Compound tokens!
And there is a great tool out there, to see how much you earn for supplying and borrowing
to compound from predictions exchange, which I left the link for in the description below,
but if we put in our .006, we must round down with this, and then enter calculate...we can
see how much we could earn just from that .0063 of a wBTC.
Over a year, you would earn .07 COMP, and 9.43 cents in interest at the current rates.
Which is a net APY of 52.12 percent!
Of course that is just for, a small amount of wBTC.
But, what if I had supplied them an entire one, a whole wBTC.
That comp, jumped up to 12.3 per year, worth 3629 dollars at current prices..and interest
earned?
Just over 1571 dollars, for a combined APY of 54.06 percent.
But remember, we also used DAI, supplied that to borrow WBTC on Aave, and we are earning
interest from that supply.
Since doing the video, it has dropped to 3.72 percent, but that is OK< we can see the balance
grow in real time, on the platform.
But remember, we are also borrowing the wBTC at a rate of 11.98 percent, so you could actually
take what we are earning from dai, 3.72 percent and minus that from your borrow...and we are
actually borrowing at 8.26 percent.
And then lending on compound, at 16.33 percent APY.
But if that rate dips, and goes below the 8.26 percent level on compound, I need to
get out, because this farming technique...would’t make sense.
Which you can do at any time, on all of the platforms.
You are in control of your loans, your collateral..there is not wait, you can do it in an instance.
You get why they call this Yield Farming Now?
Things rapidly change, and you have to be on the ball...I’m sure today, the rates
are much different all around.
And that is just a high level look at things, and I want to provide the Chico Army the best
content possible.
So, you have to know about InstaDapp, a very powerful and since compounds launch, surging
DeFi tool.
They have their own compound finance section, which includes maximizing your compound position
by folding 4x.
Which I could explain, but another great youtuber, DeFi dad, has already covered thoroughly on
what to do.
That video is in the description, if you want to check it out.
So, the compliexities of yield farming, go beyond, just what we have talked about.
Chainlink god on twitter, put out this tweet.
Wew, DeFi yield farming is addictive.
Deposit link to aave, use collateral to borrow wBTC, depost wbtc to curve finance, receive
Curve Ren WSBTC Liqudity Pool token, which is 36 percent ren btc, 25 percent wbtc, and
39 percent sBTC.
Stake pool token on synthetic io, and thus he is farming synthetic, REN, BValance, and
Curve finance’s token.
Wowahweeewaaaa.Is all Chico has to say…
Now, this isn’t just a free lunch, you have to be knowledgeable, you have to research,
and you have to take risks.
Each and every single one of these dapps, and protocols, have risks, since most are
run with Solidity language, and thus are turning complete and have attack vectors.
That is why, like everything in crypto, you never risk, more than you can afford to lose,
and that goes with Yield Farming but the question this all comes down to...is are you a Chad
or are you a Chode?
Cheers, I’ll see you next time!