Weekly Crypto Staking and Farming Review

Overview

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We started the year by conducting a top down review of all the platforms on our list. We removed Venus as we believe they don’t offer investors anything special, for example you can stake CAKE on Pancakeswap and earn a considerably higher APR. We also added two new platforms from the ‘DeFi 2.0’ contingent, namely Olympus DAO, the reserve currency and Convex Finance.

There are some juicy Staking APRs available from both the centralized exchanges and DEXs including 32% for staking EOS with Kucoin, 23% for staking KAVA with Kraken and 65% for staking CAKE on Pancakeswap. The meanest staking reward was a measly 0.25% for staking Bitcoin on Kraken.

Amongst the most generous farming rewards were Harvest’s 2,359% for MEME20-ETH and Pancakeswap’s 1,197% for INSUR-BNB.

This week we are also reviewing three platforms that have emerged from what is called DeFi 2.0.

This week’s APRs from leading staking and yield farming platforms

There is one thing we would like to draw to your attention. We noticed that more and more platforms are restricting US users. This could be highly inconvenient if this happens after you have invested. We would suggest as a US investor you tread very cautiously when entering this market in these very uncertain times.

Platform Review

This week we are taking a look at the phenomenon which is what has become known as DeFi 2.0. DeFi 2.0 is really only a refinement of all the original DeFi protocols aimed at improving user experience, increasing liquidity and reducing transaction fees (gas) and increasing transaction speed.

The one platform that has taken much of the credit for leading the way in the DeFi 2.0 revolution is Olympus DAO with its OHM token. OHM has spawned a number of copies or forks known as OHM forks, the main ones are Wonderland Abracadabra and Convex Finance.

The market value of these platforms have exploded exceeding over $7 billion. There have been hundreds of copycat platforms, mostly anonymous teams and plenty of rug pulls.

Olympus DAO was launched in February 2021 to solve the problem of borrowed liquidity which can quickly migrate to another platform if APRs prove more attractive elsewhere. With OHM crypto assets are swapped with OHM tokens and Olympus DAO ends up owning their own liquidity. They call this a reserve currency backed by the assets they hold in their treasury. But it is not without risks. The main one being that the value of OHM is 6 times higher than the value of tokens held in their treasury. Put another way, if there was a liquidation token holders would receive 14 cents on the dollar at current valuations. The concept however is a good one and to entice investors OHM and other players in this market are offering massive APRs, OHM is currently paying an APR of 46k%.

Olympus DAO

Olympus (OHM) aims to become a decentralized reserve currency that is community owned, governed by a DAO, and backed by decentralized assets.

The team designed OHM to be a stable reserve currency using economic force. An algorithm is used to rebalance the supply of OHM tokens in the market in order to maintain the peg.

The Olympus project has 2 primary methods to prevent traders from selling off OHM which will introduce buy pressure to the DAO.

1. Staking is used to incentivized token holders to lock their OHM to receive rebase rewards
2. Bonds are introduced to incentivized liquidity providers to lock in their liquidity.

The market cap of OHM is $2.2 billion with TVL or owned liquidity at $300 million. This in our opinion makes Olympus DAO a high risk proposition despite the high APR of 46k%.

Convex Finance

Convex is a protocol that simplifies Curve boosting experience in order to maximize yields. Convex allows Curve liquidity providers to earn trading fees and claim boosted CRV without locking CRV themselves. Liquidity providers can receive boosted CRV and liquidity mining rewards with minimal effort.

If you want to stake CRV, Convex lets users receive trading fees as well as a share of boosted CRV received by liquidity providers. This allows for a better balance between liquidity providers and CRV stakers as well as better capital efficiency.

Curve liquidity providers can deposit their LP tokens into Convex to maximize their CRV earnings with a more efficient boost.

Curve DAO token stakers will be able to earn additional boosted CRV and CVX tokens through the protocol.

Convex Finance has become the top yield farming platform with over $20 billion of TVL. This rapid elevation can be attributed to its improved user experience and attractive returns.

Wonderland

The Wonderland project is a decentralized reserve currency protocol available on the Avalanche Network, backed by assets in the treasury. Its goal is to build a policy-controlled currency system, native on the AVAX network, which optimizes for stability and consistency so that TIME (Wonderland's currency token) can function as a global unit-of-account and medium of exchange. In order to achieve price stability without fiat money, Wonderland intends to optimize the system for growth and wealth creation.

Like Olympus DAO it’s token is backed by its own liquidity. Wonderland’s market value is however below its TVL making this a more interesting proposition than OHM. It’s APR is an eye watering 66,000%.

Before investing into OHM or OHM copycats one must check the following.

1. What is the discount or premium on the assets held in the treasury compared to the market value of the token?
2. What is the quality of the assets held in the treasury?
3. How liquid are the tokens you are buying? It doesn’t matter how much the discount is if you can’t sell them in the market.
4. What is the likelihood of a scam or rugpull? This is an essential consideration when looking at investing in new OHM forks where a good proportion are scams.

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No Financial Advice

This report does not constitute financial advice or a recommendation to buy in any way. Always do your own research and never invest more than you can afford to lose. Investing in cryptocurrencies is high risk, and you could lose 100% of your investment.