What if you could make $100 a day in passive income?
How about $500? $1,000?
There are a plethora of ways to yield farm in the #cosmos ecosystem.
How and what are the risks? 🤔
That’s what this 🧵 is gonna be about!
1/x
How about $500? $1,000?
There are a plethora of ways to yield farm in the #cosmos ecosystem.
How and what are the risks? 🤔
That’s what this 🧵 is gonna be about!
1/x
First off, yield farming has significant risk.
It’s not some magic trick to earn unlimited money.
Price can go down, yield can decrease, and funds are often locked for long periods.
Make sure to do your own research before jumping into any yield farm.
2/x
It’s not some magic trick to earn unlimited money.
Price can go down, yield can decrease, and funds are often locked for long periods.
Make sure to do your own research before jumping into any yield farm.
2/x
So… what are the best options in the #cosmos ecosystem?
Where do I yield farm?
How risky is each one?
Right now, my favorite option is liquidity pools (LP) on @osmosiszone.
3/x
Where do I yield farm?
How risky is each one?
Right now, my favorite option is liquidity pools (LP) on @osmosiszone.
3/x
Some quick pool APR numbers:
$ATOM / $OSMO (SFS: 77%
$UST / $OSMO (SFS): 134%
$LUNA / $OSMO (SFS): 117%
$JUNO / $OSMO: 165%
4/x
$ATOM / $OSMO (SFS: 77%
$UST / $OSMO (SFS): 134%
$LUNA / $OSMO (SFS): 117%
$JUNO / $OSMO: 165%
4/x
My current pools:
$ATOM / $OSMO (SFS)
$JUNO / $OSMO
$ATOM / $JUNO
$HUAHUA / $OSMO
$ATOM / $HUAHUA
$ATOM / $STARS
5/x
$ATOM / $OSMO (SFS)
$JUNO / $OSMO
$ATOM / $JUNO
$HUAHUA / $OSMO
$ATOM / $HUAHUA
$ATOM / $STARS
5/x
My favorite pool?
$ATOM / $OSMO (SFS)
With Superfluid Staking (SFS), you effectively get passive income on your passive income.
SFS thread:
I’ll get into my thoughts on specific pools later (tweets 19-26).
For now, let’s discuss overall strategy.
6/x
$ATOM / $OSMO (SFS)
With Superfluid Staking (SFS), you effectively get passive income on your passive income.
SFS thread:
I’ll get into my thoughts on specific pools later (tweets 19-26).
For now, let’s discuss overall strategy.
6/x
Do you chase high yields on new coins?
Do you go with the low but steady yields?
Do you try some combination of the two?
I personally go with a combination of the two, but let’s explore each.
7/x
Do you go with the low but steady yields?
Do you try some combination of the two?
I personally go with a combination of the two, but let’s explore each.
7/x
Chasing High Yields
If you take this path, it’s important you get in early.
First, the APR is usually highest in the beginning.
You can either sell your rewards or compound them.
8/x
If you take this path, it’s important you get in early.
First, the APR is usually highest in the beginning.
You can either sell your rewards or compound them.
8/x
Second, there’s a greater chance price appreciates as more people chase yield.
Why is this important?
Because you can recover your principal much quicker if price goes up.
Let’s take $HUAHUA, for example.
9/x
Why is this important?
Because you can recover your principal much quicker if price goes up.
Let’s take $HUAHUA, for example.
9/x
If you bought on day 1 of external incentives, you paid ~.005 (less if you bought when they were announced).
Within a few days, price was nearly .01.
Any APR you received at such prices was effectively double compared to your principal.
10/x
Within a few days, price was nearly .01.
Any APR you received at such prices was effectively double compared to your principal.
10/x
What do I mean by effective APR?
Example:
I invest $100 and price doubles to $200.
If I LP at 1200% APR, it normally takes 1 month to recover my investment.
With price double, rewards are 2x relative to my investment (2400% APR).
Thus, it would only take 0.5 months.
11/x
Example:
I invest $100 and price doubles to $200.
If I LP at 1200% APR, it normally takes 1 month to recover my investment.
With price double, rewards are 2x relative to my investment (2400% APR).
Thus, it would only take 0.5 months.
11/x
Let’s say you bought $HUAHUA at ~.01 and 500-600% APR.
(For historical prices and APRs, I’m going purely based on memory.)
Price went down shortly after, decreasing your investment value by ~50%.
Your effective APR is now ~50% lower, meaning 500% APR is only 250%.
12/x
(For historical prices and APRs, I’m going purely based on memory.)
Price went down shortly after, decreasing your investment value by ~50%.
Your effective APR is now ~50% lower, meaning 500% APR is only 250%.
12/x
Keep in mind: the 250% effective APR is only relevant to how long it will take to recover your initial investment.
If your goal is purely to increase the number of coins in your wallet, 500% is the relevant APR.
13/x
If your goal is purely to increase the number of coins in your wallet, 500% is the relevant APR.
13/x
Low but Steady Yields
The interesting thing is that “low” isn’t really even necessarily that low.
Have you seen the APR on the $JUNO pools on Osmosis?
We’ll get to specific pools soon.
For now, why invest in lower yield LPs?
14/x
The interesting thing is that “low” isn’t really even necessarily that low.
Have you seen the APR on the $JUNO pools on Osmosis?
We’ll get to specific pools soon.
For now, why invest in lower yield LPs?
14/x
Stability, baby.
Lower yields usually means less sell pressure.
I mean, quality is also important.
But if everyone is getting a ton of rewards, more people are likely to sell.
Supply and demand. Maths. You get it.
More on sell pressure later.
15/x
Lower yields usually means less sell pressure.
I mean, quality is also important.
But if everyone is getting a ton of rewards, more people are likely to sell.
Supply and demand. Maths. You get it.
More on sell pressure later.
15/x
Combination
You get to be a degen while also being responsible.
Mix and match.
Try all the flavors.
This is the approach I use.
16/x
You get to be a degen while also being responsible.
Mix and match.
Try all the flavors.
This is the approach I use.
16/x
Is it the best one?
I don’t know… I ended up having way less $JUNO than I would’ve hoped.
But I did get into some high-yield pools early.
Sometimes, I compounded.
Other times, I sold rewards.
17/x
I don’t know… I ended up having way less $JUNO than I would’ve hoped.
But I did get into some high-yield pools early.
Sometimes, I compounded.
Other times, I sold rewards.
17/x
I was debating whether I should share that I’ve sold rewards.
There’s a culture of holding until forever.
Being shamed for taking profit.
Do what works best for your financial situation.
And don’t let anyone pressure you otherwise.
18/x
There’s a culture of holding until forever.
Being shamed for taking profit.
Do what works best for your financial situation.
And don’t let anyone pressure you otherwise.
18/x
Let’s touch on some specific pools.
$ATOM / $OSMO (SFS): 77%
The premiere pool.
Risk: low
Reward: medium
Unless a long bear market hits, this pool should be a safe bet.
19/x
$ATOM / $OSMO (SFS): 77%
The premiere pool.
Risk: low
Reward: medium
Unless a long bear market hits, this pool should be a safe bet.
19/x
$JUNO / $OSMO: 165%
$JUNO / $ATOM: 167%
Risk: low-medium
Reward: medium-high
More upside than the $ATOM / $OSMO pool with similar risk.
$JUNO is still young and has quickly proven itself.
20/x
$JUNO / $ATOM: 167%
Risk: low-medium
Reward: medium-high
More upside than the $ATOM / $OSMO pool with similar risk.
$JUNO is still young and has quickly proven itself.
20/x
$HUAHUA / $OSMO: 173%
$HUAHUA / $ATOM: 237%
Risk: high
Reward: high
It’s a meme coin, but it has actual application.
External rewards will also continue for several more months.
More on external rewards later.
21/x
$HUAHUA / $ATOM: 237%
Risk: high
Reward: high
It’s a meme coin, but it has actual application.
External rewards will also continue for several more months.
More on external rewards later.
21/x
$STARS / $OSMO: 197%
$STARS / $ATOM: 224%
Risk: medium-high
Reward: high
The @stargaze NFT launch was smooth with many more projects coming soon.
Will be interesting to see price impact as project volume increases.
Sadly, external rewards end soon.
22/x
$STARS / $ATOM: 224%
Risk: medium-high
Reward: high
The @stargaze NFT launch was smooth with many more projects coming soon.
Will be interesting to see price impact as project volume increases.
Sadly, external rewards end soon.
22/x
$LUNA / $OSMO (SFS): 117%
$LUNA / $ATOM: 52%
Risk: low
Reward: medium
Hard to rate this one.
$LUNA has been on a tear.
But if something goes wrong, it can go really wrong.
For now, will rate it the same as $ATOM / $OSMO.
23/x
$LUNA / $ATOM: 52%
Risk: low
Reward: medium
Hard to rate this one.
$LUNA has been on a tear.
But if something goes wrong, it can go really wrong.
For now, will rate it the same as $ATOM / $OSMO.
23/x
$CRO / $OSMO: 56%
$CRO / $ATOM: 35%
Risk: low-medium
Reward: low-medium
This coin went on a huge run in November when it renamed Staples Center.
A lot of its value comes from its prepaid card and farming options, both which require varying amount of staked $CRO.
24/x
$CRO / $ATOM: 35%
Risk: low-medium
Reward: low-medium
This coin went on a huge run in November when it renamed Staples Center.
A lot of its value comes from its prepaid card and farming options, both which require varying amount of staked $CRO.
24/x
$SCRT / $OSMO: 77%
$SCRT / $ATOM: 37%
Risk: medium
Reward: medium-high
The APR for these are on the lower end, but the upside for $SCRT is significant.
Biggest question is scaling.
Also… competition in the NFT market and future of privacy in #cosmos.
25/x
$SCRT / $ATOM: 37%
Risk: medium
Reward: medium-high
The APR for these are on the lower end, but the upside for $SCRT is significant.
Biggest question is scaling.
Also… competition in the NFT market and future of privacy in #cosmos.
25/x
$UST / $OSMO (SFS): 134%
$UST / $LUNA: 67%
Risk: very low
Reward: low
These pools are strong options for hedging, especially $UST / $OSMO given its high APR.
Here’s a thread from @0x_Hank on it:
26/x
$UST / $LUNA: 67%
Risk: very low
Reward: low
These pools are strong options for hedging, especially $UST / $OSMO given its high APR.
Here’s a thread from @0x_Hank on it:
26/x
$XPRT / $UST: 257%
Risk: low
Reward: low-medium
70% $XPRT, 30% $UST.
Stablecoin percent + high APR bring down risk while also enhancing reward.
27/x
Risk: low
Reward: low-medium
70% $XPRT, 30% $UST.
Stablecoin percent + high APR bring down risk while also enhancing reward.
27/x
There are a few other pools that you might consider if you prefer LPing to staking.
Here’s my thread on the subject:
28/x
Here’s my thread on the subject:
28/x
When considering smaller projects like $CMDX and $DVPN, look at liquidity and APR.
Low liquidity means that one big buy or sell can vastly move price.
Low APR means less incentive for people to provide or continue providing liquidity.
What about high APR?
29/x
Low liquidity means that one big buy or sell can vastly move price.
Low APR means less incentive for people to provide or continue providing liquidity.
What about high APR?
29/x
That depends.
If it comes from external incentives (paid in native token), it can lead to more sell pressure:
- Selling to take profit
- Selling to increase other side of pool
If its internal incentives (paid in $OSMO), it won’t increase sell pressure.
30/x
If it comes from external incentives (paid in native token), it can lead to more sell pressure:
- Selling to take profit
- Selling to increase other side of pool
If its internal incentives (paid in $OSMO), it won’t increase sell pressure.
30/x
Honorable mentions to $XPRT / $OSMO, $ROWAN / $OSMO, $NETA / $OSMO, three pools with high internal incentives.
All three also have liquidity above $5 million… still low but not miniscule.
31/x
All three also have liquidity above $5 million… still low but not miniscule.
31/x
Things to keep in mind:
- External incentives in many pools are ending
- Internal incentives are dropping as more projects list
- SFS will increase liquidity, further decreasing internal incentives
- Osmosis thirdening in June will also decrease internal incentives, by 33%
32/x
- External incentives in many pools are ending
- Internal incentives are dropping as more projects list
- SFS will increase liquidity, further decreasing internal incentives
- Osmosis thirdening in June will also decrease internal incentives, by 33%
32/x
What about other options?
@junoswapdex will be interesting.
WEN $RAW?!
There will likely be high APR early before liquidity explodes.
Will also be high risk as $RAW’s value is unknown.
Here’s a thread from @EncryptionDog on JunoSwap and $RAW:
33/x
@junoswapdex will be interesting.
WEN $RAW?!
There will likely be high APR early before liquidity explodes.
Will also be high risk as $RAW’s value is unknown.
Here’s a thread from @EncryptionDog on JunoSwap and $RAW:
33/x
What about staking?
Staking is best when you really like a coin as it doesn’t have impermanent loss like LPs.
Here's my thread again on the subject:
34/x
Staking is best when you really like a coin as it doesn’t have impermanent loss like LPs.
Here's my thread again on the subject:
34/x
Current staking APRs:
$ATOM: 16%
$OSMO: 66%
$JUNO: 91%
$HUAHUA: 273%
$STARS: 105%
$LUNA: 7%
$CRO: 15%
$SCRT: 25%
Be aware of long unbonding periods!
35/x
$ATOM: 16%
$OSMO: 66%
$JUNO: 91%
$HUAHUA: 273%
$STARS: 105%
$LUNA: 7%
$CRO: 15%
$SCRT: 25%
Be aware of long unbonding periods!
35/x
Thanks for reading!
If you found this thread helpful, please like and retweet the first tweet and give me a follow.
Let’s bring more people into the #cosmos ecosystem :)
Here’s the link:
37/37
If you found this thread helpful, please like and retweet the first tweet and give me a follow.
Let’s bring more people into the #cosmos ecosystem :)
Here’s the link:
37/37
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