I used Beefy finance for four months so you don’t have to

Beefy finance is a so called yield aggregator: you can provide liquidity in a pool of choice and your lp tokens automatically compound. I was interested in the returns of such a platform so here are my results. First, I picked a pool with two projects I liked that weren’t too volatile with respect to each other to mitigate impermanent loss (look up the meaning on YouTube). Eventually I chose the ETH-gOHM lp pool with an APY of 70.2% at that time. In total I put in $246 dollar, or $123 in each.

ETH-gOHM lp

Today, 131 days later, my lp tokens increased with 12.5% but the total value of my stake decreased with -8.8%. However, if I would have executed a buy and hold strategy instead my holdings would have decreased with a whopping -23.6%. In the pool, my amount of ETH increased with 30% and the amount of gOHM with 1.5%. The eventual APY turned out to be 38.9% due to declining APY over time in this pool. All in all, this strategy performed better than buy and hold during the past four months in this bear market but it is of course susceptible to recency bias. During a bull market this strategy could very well underperform buy and hold instead.