Before we get started, a reminder that this is not a recommendation or endorsement to buy any tokens mentioned in this tutorial. Do not follow anything shared by DeFi Dad as an investment strategy.
With every week, a new yield program reveals itself in DeFi. This week is a familiar farm I’ve covered previously on Ethereum, but it happens to be somewhat timely for exposure to ETH and WBTC as they’ve been up in price while DeFi tokens have cooled off a bit.
Recently, Avalanche kicked off a program called Avalanche Rush, with $180M in rewards to attract blue chip DeFi applications and yield farmers. Then just yesterday, Avalanche’s $7M in AVAX rewards began with the launch of 3 Curve pools on Avalanche including an Aave stablecoin pool, another with pool with tokenized BTC, and lastly a pool we’ll focus on today–Tricrypto with 33% ETH / 33% WBTC / 33% stablecoins.
How to Farm up to 36% APY with ETH, WBTC, and stablecoins
With this new Curve Tricrypto pool on Avalanche, one can gain exposure to 33% ETH / 33% WBTC / 33% stablecoins (a combo of DAI, USDC and USDT) while earning a combined 36% APY thanks to 3 forms of yield:
- Trading fees in Curve yielding ~18.75% APY
- WAVAX rewards from Avalanhce yielding 17.26% APY
- And an expected additional boost in CRV rewards once Curve DAO votes next
Before we get started, please be aware of a few major risks.
- Smart contract risk is always a risk but one can already purchase Protocol Cover by Nexus Mutual here for assets deposited in this Curve pool for less than 1.3% APR. So I’m netting almost 35% after paying 1.3% APR. Follow this guide on how to buy WNXM, unwrap it to NXM, and ultimately pay less than the usual 2.6% APR on Nexus.
- Oracle failure could also contribute to a loss of funds.
- Pegged assets like WBTC or USDT can de-peg.
- Impermanent loss is likely here as an LP.
- The quoted 36% APR is likely to change by the time one reads this tutorial. Also the trading volume and the market price of reward tokens are likely to change.
- As always, this is not financial advice.
Here’s how to get started!
1 – Assuming I already have ETH, WBTC, and/or stablecoins, I would then need to bridge my assets from Ethereum to Avalanche by using this bridge run by the core team behind Avalanche. I can follow the prompts after connecting my Ethereum wallet to choose a token like ETH, WBTC, DAI, USDC, or USDT and send tokens in a single transaction to Avalanche. Btws, sending more than $75 of any token gets you an AVAX airdrop, enough to do a few transactions.
2 – I need to be sure I have the Avalanche network settings in MetaMask, so I go to chainlist.org, search Avalanche Mainnet, click Connect Wallet, and click Add to MetaMask.
3 – After the tokens arrive on Avalanche, I’m gonna need more AVAX to pay future network fees (gas) to use DeFi apps if this is my first time. I can use LydiaFinance or Trader Joe to trade for more AVAX. I personally traded for about $50 of AVAX to get started.
4 – I can deposit any combination of these tokens but say I want to maintain my WBTC, ETH, and stablecoin exposure, I can prep the exact ratios of these tokens to maintain my exposure or just deposit 1 or a few tokens and Curve will auto-trade them into the appropriate ratios. Reminder: I am exposed to volatile tokens (ETH or WBTC) and stablecoins in the same pool so impermanent loss…
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.
