Only a year ago, Compound released its COMP governance token and by launching their liquidity mining program, they unleashed what would become known as DeFi Summer! While the past cannot guarantee what future the market holds for us in DeFi, the momentum of DeFi on Polygon / Matic seems to indicate we’re in for a wild ride.
Polygon now boasts just under $4B in TVL and according to Alex Svanevik of Nansen, you can see Polygon usage measured by transactions has gone parabolic.
Luckily, we’ve already discussed quite a few of the hit DeFi products on Polygon so I wanted to shift gears today and provide a guide of the biggest, most reputable applications on Polygon with farming programs to consider participating in.
Assuming you’re well acquainted with Polygon as a thriving sidechain of Ethereum, meaning it bridges to Ethereum but does not inherit the security or decentralization of Ethereum, let’s get started!
How to Ape into DeFi Summer 2021 on Polygon
Before we get started, please be aware of a few major risks.
- Smart contract risk is always my top concern. Some of these apps can be covered by Nexus Mutual including Curve, Aave, PoolTogether, and mStable since Nexus cover inherits L2 and sidechain support now.
- As an LP in QuickSwap or Cometh Swap, one can experience impermanent loss assuming the 2 tokens in the LP don’t remain in perfect 1:1 correlation.
- Be aware the APYs I quote below will likely change by a little or a lot whenever you read this. The APY is very dependent on the price of governance tokens and liquidity in farming pools.
- As always, this is not financial advice.
Here’s a breakdown of all the farms I’m considering or already participating on Polygon, ranked in no particular order! Reminder, if you need to bridge assets to Polygon from Ethereum, go to Zapper Bridge and follow this tutorial to migrate stablecoins, ETH, and other assets.
mStable
- Opportunity: Earn up to 23.68% APY with stablecoin deposits (imUSD)
- How to earn yield: Go to mStable’s app, flip the network to Polygon, and deposit USDC, DAI, or USDT to mint imUSD and simply hold the imUSD to accrue lending interest + swap fees
- Highlighted Risks: Newer farms so smart contract risk, likely rates will normalize to below 100% APY as more liquidity deposits
QuickSwap
- Opportunity: Earn up to 120% APY in QUICK as an LP
- How to earn yield: Go to QuickSwap’s app, become an LP, and deposit the LP to earn QUICK rewards. Their QUICK allocation to different LPs changes weekly
- Highlighted Risks: Impermanent loss could be brutal in more volatile LPs
PoolTogether
- Opportunity: Earn up to 105-130% APY in the USDT pool with subsidized MATIC rewards and have a chance to win the lottery pot from USDT lending interest
- How to earn yield: Go to PoolTogether’s app and deposit USDT into the USDT pool to earn QUICK rewards.
Highlighted Risks: Minimal smart contract risk given PoolTegether is one of the most audited and reputable protocols in DeFi
Curve
- Opportunity: Earn up about 55% APY in interest, Curve fees, and WMATIC rewards
- How to earn yield: Go to the Curve Polygon app, deposit USDC, DAI, and/or USDT, and be sure to click Deposit and stake in gauge to begin earning WMATIC rewards. Refer to this guide in Zapper Learn if you need more…
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.
