Before we get started, this is not a recommendation or endorsement to buy any token mentioned.
The last several months have taught every crypto investor–there is no risk-free yield in DeFi or centralized crypto finance. However, despite the downturn in crypto prices and the decrease in economic activity in CeFi and DeFi, new protocols continue to launch on Ethereum, Ethereum L2s, and alternative L1s. One very early stage ecosystem building for EVM-compatible finance applications is Moonbeam. Moonbeam is “a specialized Layer 1 that extends the base Ethereum feature set with additional features such as on-chain governance, staking, and cross-chain integrations.” Moonbeam is designed to tackle cross-chain interoperability challenges by making it easier to deploy applications on Polkadot. The native token used for paying network fees (aka gas) on Moonbeam is GLMR. As of this writing, only ~$150M in assets are transacting across open finance applications on Moonbeam.
As we saw in the bull market, early builders are quick to copy the most popular applications from Ethereum, including decentralized exchanges (DEXs) or automated market-makers (AMMs). StellaSwap is one of the first automated market-makers (AMMs) on the Moonbeam parachain network. StellaSwap offers familiar uses like trading tokens, earning yield as a liquidity provider (LP), and staking LPs or STELLA tokens to earn additional rewards.
Today, I’ll show how I can become an LP in an all stablecoin pool composed of MAI, USDC, USDT, DAI, and FRAX, earning ~25% APR as of this writing, based on yield from trading fees + STELLA rewards. This assumes I either have stablecoins already on Moonbeam parachain or will need to bridge assets using the Moonbeam Native Bridge.
How to Earn Up to 25% APR with Stablecoins on StellaSwap