Decentralized Finance (aka DeFi) continues to grow exponentially on Ethereum, since the Compound’s COMP distribution program launched in May. While it can be exciting to learn about this new fast-paced p2p finance system, it can be overwhelming and near impossible to track all the new yield earning opportunities. Thankfully, I have you covered! Here are the top 5 yields being earned in DeFi + a bonus idea, in order of highest earning APY (annualized percentage yield).
BONUS: I want to kick off with the YFI governance token issued by a popular DeFi protocol yearn.finance, which recently completed its initial YFI distribution, including a staking program combined with 3 Balancer liquidity pools. It’s worth noting the daily APY being earned over this 7-day program reached as high as >1000% APY on one pool due to the YFI token growing from $0 to as high as $5,000 in a few days. YFI is available to buy and sell on DEXs like Balancer and was recently listed on some CEXs as well. I’d recommend checking 1inch.exchange for the best YFI rates on Ethereum DEXs. I am highlighting this as an opportunity because the YFI community is voting on new yield farming programs to possibly begin in a week. The YFI token garnered attention for its limited initial supply of 30,000 tokens, all distributed via a yield farming program I talk through in this DeFi tutorial on How to Earn YFI. Stay tuned for new opportunities!
- Current daily APY: TBD
- Previous all-time high daily APY: >1000%
- Yield to be earned: YFI, CRV (yet to be generated), BAL, Balancer pool fees, and stablecoin interest
- Assets Required: DAI, USDC, USDT, TUSD or yCrv and/or YFI
- Where to go: Learn about YFI and the governance proposals for yearn.finance at gov.yearn.finance and check out ygov.finance where future YFI staking opportunities will be enabled.
- Risk(s): The founder openly “tests in product” which leaves greater risk for smart contract bugs, which can lead to a total loss of funds. Another major risk is the illiquidity of YFI combined with 98%/2% Balancer pools for yCrv/YFI. Balancer warns “This is an extremely risky pool. A liquidity pool is only as good as its weakest token. If the YFI token is infinitely minted, a huge percent of the entire pool supply can be stolen.”
#5 Balancer is a great way to gain exposure to a customizable number of assets and weights within a pool. By being a Balancer LP, you also earn pool swap fees and rewards for providing liquidity. A Balancer LP can earn an ROL (Return on Liquidity), based on assets you already have or want exposure to. Balancer LPs get paid in a weekly proportional distribution of BAL on top of the pool swap fees accruing to their liquidity provision.
- Current daily APY: Up to 29.4%
- Previous all-time high daily APY: >60% (based on >$20 BAL)
- Yield to be earned: BAL, Balancer pool swap fees
- Assets Required: Varies according to 1 or all assets in the Balancer pool
- Where to go: Use this tool to find the right pool according to ROL and assets you want exposure to. Then, click the link to the corresponding pool link on the far left of this Predictions.Exchange calculator tool.
- Risk(s): Smart contract bugs, liquidity crunches, governance compromise
#4 The mStable native interest rate is probably the easiest way to earn in DeFi. As of today, it’s earning 31% APY. To participate, one must deposit stablecoins (DAI, USDC, USDT,…
Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
I’m passionate about helping others do the same, so I run multiple educational channels on crypto investing.
