CAPPIES here we go — Part 2 of our farming yield series! Let’s cut to the chase and share the learnings
Note: I watched through countless youtube videos, googled up and also read various reddit posts and condense the information below. These are my observations and I still consider myself as a noob so feel free to share you comments/ideas too!
Top alphas on yield farming
1)Check if your choose farm is rugproof !!!!
BUT there is no 100% rugproof service. Minimally you should only partake in safe farms which are audited by The RugDoc . Nothing is 100% in this world but at least they raise your odds in getting into safe farms.
Note: Once you made it, remember to donate to The RugDoc for making crypto a safer place for all of us 😎
2) Checking out new farms
There are always new farms sprouting out on various networks every single day. Its bloody hard to catch up. Thankfully we have the people from vfat.tools . New farms are constantly added here so be sure to check them out!
3) Never stop learning about yield farms
As the saying goes, always DYOR (Do Your Own Research!).. Not easy but there are plenty of resources online to level up. I am not a technical person but there are still tons of idiot-proof resources to learn. A decent resource such as youtube videos BSC Checker shares more light on ‘Masterchef’ and ‘Timelock’; which are essential features on all yield farms. Defi.yield is also a fantastic resource to read all about “Timelock” and “Masterchef”!
Note: It is not easy to create sustainable farms. It is also a challenging task for devs to create successful and sustainable farms. Having said that, farms are constantly being reinvented with innovative solutions such as layered farming. Never stop learning!
4) Certik certified. Audited by Hacken. Audited by Techrate
What does that even mean?! Do not trust those simple words that are staring in your face. Did those farms go for the free check route? Or was it a full-fledged paid service into the codes? Is the pdf attached?
4) Beware of impermanent loss in pairings !!
You can use an advanced IL calculator from defi.yield or you can use a simple IL calculator from dailydefi too. Some things to note are;
a) Both assets increase in price at different rates
Yes, you will suffer some IL loss but in absolute USD terms, you will still gain.
b) One or both assets decrease in prices
You will suffer more IL loss as the higher-priced asset will be sold off to buy the lower-priced asset to maintain the 50–50 liquidity balance.
Best yield farming strategy (for now…)
As mentioned before, the yield farm space is changing so fast.. My strategy is base on my personal conclusion that
ALL NATIVE TOKENS (OF FARMS) WILL EVENTUALLY DROP OFF TO ZERO. SO THERE IS LITTLE OR NO UTILITY IN HOLDING THEM
Disclaimer: Stable farms such as Bunny, Pancake, Aave, Curve etc often give lower (<100% APY). Do consider those if your risk appetite is low. The following steps are meant for “degen” high yielding farms (~>1000% APY )
To ensure we gain substantial and quick returns for best yields on high-yielding farms, you can reference the following steps;
1. Ensure you have a truckload of funds (yield farming is a capital play) 😝
2. Snipe those newer farms which usually have >10k% APY (the APY will decrease rapidly so you need to catch them early)
3. Check your choose farm is somewhat SAFE via The Rug Doc
4.Only choose single-sided farms (to avoid impermanent loss)
5. Ensure you are aware of any deposit or transfer fees
6. Take extra note of the harvesting timeline. Always harvest them once available. Sell the native tokens for USDT/BNB (stable coins which you prefer to hold)
7. Once the rate of rewards (USD) <<< that the rate of price drop of native tokens (USD)= GTFO ! #timetochangefarms
Disclaimer: For point 6, I welcome any other mathematical formulas to calculate the point at which the farm no longer yields us the best results. I ain't no math wizard so would love to hear your comments below!
Alright cappies! Hope this 2-part article series is helpful in your yield farming journey. Do share your experience below if any. As always, Google is your best friend and th3cappy is always here to help!
