Before we get started, a reminder that this is not a recommendation or endorsement to buy any tokens mentioned in this tutorial.
It seems history is poised to repeat itself as DeFi protocols are developing on other L1s, outside of Ethereum. While I spend most of my time on Ethereum-based DeFi, I’ve been exploring and farming now on Polygon, Terra, Avalanche, and Solana. Being one of the few non-EVM-compatible L1s, Solana has a notably fast-growing ecosystem of DeFi applications, boasting about $2.47B in TVL, the third most TVL among L1s, behind BSC at $19.36B and $114B on Ethereum.
One of the earliest and most important DeFi protocols to launch on Ethereum was Curve, a stablecoin and like-asset AMM, providing the deepest liquidity and least slippage for trading stablecoins, tokenized BTC, and derivatives of ETH. In fact, Curve now ranks #1 in terms of TVL on Ethereum-built DeFi at $11.6B.
This July, Saber launched as Solana’s first AMM, specifically optimized for trading pegged assets like Curve. It is now the second largest TVL on Solana at $633M, just behind the “Uniswap of Solana” called Raydium.
While Solana DeFi is still in its early stages of development, the same high risk, high rewards liquidity mining programs are rapidly growing on Solana, much like during the DeFi Summer on Ethereum in 2020.
How to Earn Up to 51% with Tokenized BTC on Saber AMM
In today’s opportunity, I’ll show how I can earn high yield as an LP on Saber, staking the LP to earn additional SBR rewards on top of the trading fees accruing to my share of the liquidity pool. I can earn yield using stablecoins, tokenized BTC, SOL, wrapped LUNA, and more but I’ll speak to an example where I use tokenized BTC, sent via the Wormhole Bridge from Ethereum to Solana.
Please also be aware of a few major risks.
- Smart contract risk on Saber protocol.
- Oracle failure could contribute to a loss of funds.
- There’s centralized risk in using the Wormhole bridge by Solana.
- Pegged assets can de-peg.
- The quoted APYs/APRs could fluctuate depending on the amount of competing liquidity to earn rewards and the trade volume in these liquidity pools.
- As always, this is not financial advice. You should not follow any of my writing as an investment strategy.
1 – First, assuming I’ve never used DeFi on Solana before, I need to set up a Solana compatible wallet. MetaMask and other EVM-only wallets will not work with Solana. So the best wallet I’ve used, founded by former 0x engineers, is Phantom Wallet. It’s a browser extension wallet that sits on Chrome just like MetaMask and allows me to connect a hardware wallet like Ledger. I can follow instructions here for installing and setting up Phantom.
2 – Next, I am going to need some SOL to pay transaction fees. The only way I know how to get SOL into my wallet is to buy it on a centralized exchange like FTX or Coinbase and then deposit/send it to my wallet address in Phantom.
3 – I will then check the potential yields I can earn on the Saber Farms page here to see whether I want to earn with stablecoins or tokenized BTC or some other token.
4 – Let’s assume I identify the pBTC-renBTC LP earning about 48% APY thanks to trading fees + SBR rewards (issued by Saber for staking the LP). With that in mind, I’m ready to transfer some tokenized BTC from Ethereum to my new Solana…
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.
