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Each week we will be providing the latest APRs from leading staking and yield farming platforms together with news from the industry.
Staking and yield farming has been a major driver in the huge growth in the DeFi sector. Investors are being enticed by the massive APRs on offer. Totally new projects tempting investors with returns of 10,000+ % are able to attract a deluge of money from investors who don’t seem concerned with the high risks involved. This weekly review aims to look at the best platforms out there and the ones to avoid. We attempt to weed out the platforms that we think won’t stand the test of time.
Liquidity mining is here to stay. Our challenge is picking the winners from the losers. However a credible platform does not protect against the risk of a cyber attack or market risk. Cyber attacks or poor code are common in this space with Safe Dollar, Iron Finance and Pancake Bunny all being recent victims. No platform is totally safe. However as the market evolves investors will be able to insure themselves against these kinds of risks but that is something for the future, we are stuck with each other for now.
We wanted to start by reviewing a few of the newer promising platforms out there at the moment remembering these are not recommendations and you must always do your own due diligence.
Osmosis (OSMO) – APR up to 1,331% – https://www.coingecko.com/en/coins/osmosis
Osmosis is an automated market maker (AMM) protocol built for liquidity providers.
Osmosis is one of the newer additions to the liquidity mining community. It differentiates its offering in a few ways. Whilst most AMMs require that assets be added at a 50–50 ratio Osmosis allows for pools with customized weights.
Osmosis also attempts to counter the disloyalty of the typical yield hunter by introducing exit fees (a small fee LPs pay when withdrawing liquidity from a pool) as well as something they call Bonded Liquidity Gauges. These are mechanisms for distributing liquidity incentives to LP tokens that have been bonded for a minimum amount of time. 45% of the daily issuance of OSMO goes towards these liquidity incentives.
Osmosis is an exciting project although we are a little concerned we could find very little on the team behind it. Any platform that is handling client money should have the balls to stand and be counted, investors should expect nothing less. Whilst there is the obvious risk that the project is new and has no track record it has already amassed over $80 million of TVL in a short period of time. Its token OSMO had nearly $2m of volume in the last 24 hours which bodes well for investors wanting to exit when or if the time comes. However there is insufficient information on the project’s tokenomics which is required before investors start diving into this platform.
Maple Finance (MPL) – APR 30% – https://www.coingecko.com/en/coins/maple
Maple is a decentralized corporate credit market enabling institutions to borrow on an undercollateralized basis. For the first time, this enables users to access credit at a fixed rate to reinvest in their businesses in a capital efficient manner. Whether you are a crypto miner looking to fund hardware, a market neutral fund seeking to borrow to deploy basis trades or a market maker seeking to boost liquidity in trading pairs, institutional corporate credit is a vital cog in the crypto puzzle.
For liquidity providers, Maple offers a sustainable yield source, through lending to diversified pools of crypto’s premium institutions. The protocol is governed by the Maple Token, which enables token holders to participate in governance, share in fee revenues, and stake in Liquidity Pools.
As an investor investing in a Maple pool may be more risky compared to Compound, but they are compensated with yields of 30%, compared to Compound’s top rate of 4.6%. Maple we believe is a platform worth further investigation.
Finding losers in this market is far easier than finding potential winners. Of course we are not going to get it right every time but it should be obvious that many of the platforms we select in this category are exceptionally high risk compared to more established platforms.
Tedd.Finance – APR up to 17,200%
Tedd.Finance is one of the most recent meme tokens offering APYs of 100,000% + made possible apparently by investing in farming pools. In their brief history they have managed to amass over $500,000 in TVL. The highest return on their website is 17,200%. Of course this is a new project and investors are taking the bet that they will be able to quickly liquidate their tokens if the need arises. That is unlikely to be easy.
TikTak – APR up to 1,376%
Despite its attractive headline APRs TIKTak suffers from the same problem many of the newer platforms suffer – lack of liquidity. Remember most platforms pay returns in their native tokens so if there is no liquidity you are screwed. In the case of TikTak it is a bit like being paid in pebbles, the token has no listing and therefore no transparency and could be subject to price manipulation.
Please feel free to contact us with any platforms you would like us to review at firstname.lastname@example.org.
These publications do not constitute financial advice or a recommendation to buy in any way. Always do your own research and never invest more than you can afford to lose. Investing in cryptocurrencies is high risk, and you could lose 100% of your investment.
Until next Friday!