CAPPIES UNITE! Today we shall do a live case study on degen yield farming.
I shall follow the farming strategy I previously laid out here “Best yield farming strategy”
CASE STUDY: POLYBUNNY FINANCE
This is a very new farm, and it's slated to open in 6 hours so we are early! Early bird catches the APR 😊 Let’s ty this farm with 100USD and see how much we can earn after subjecting to all the fees and market volatility.
NOTE: Farms with high APR and low TVL (aka degen farms) have a possibility of being rugged. We need to prepare for that circumstance. The strategy will thus be — not to put all our eggs in one farm. Spread a couple of 100USD over a few farms to de-risk since all these degen farms have high APRs at the start.
STEP 1: Do our background check from Rug Doctor
Looks decent. Low risk of being rugged, as approved by Rug Doctor. Let's give it a go then!
NOTE: In the event you get rugged, DO NOT BLAME Rug Doctor. They are a vey helpful resource but at the end of the day — always be responsible for YOUR OWN TRADES.
STEP 2: Only do single-sided farms (to avoid impermanent loss)
I am going for the USDT farm with 100USDT. There is a deposit fee of 4% which means we will only be farming 100*0.96=96USD. With the liquidity of $14,000, the APR currently stands at ~3,000,000%. Notice the price of Polybunny (bottom left) stands at $24k which will drop off quickly once farming kicks off.
NOTE: Last night the liquidity was $10,000; the APR was > 10million%…The APR drops once liquidity increases. Do not get too much hopium into your system and thinking you can be an overnight millionaire (such things only happens in Hollywood)
STEP 3: Deposit funds and start farming!
Note: 100 USDT = 0.04ETH at time of writing. I saw the APR on ETH was higher than USDT thus decided to switch over to the ETH farm. Notice the price drop of Polybunny to $18k too.
STEP 4: Track and be responsible for your farms
Now we wait while we let the protocols do its magic. 😊 We shall take a daily snapshot of the numbers and come up with a daily report. Let’s unravel the truth in the degen farm numbers, fingers crossed!
NOTE: I think its critical to track and be on top of your farms. I do not believe in farm and forget. There are so much opportunity costs in committing that lazy act. If farms reached a point in which its no longer attractive — time for us to act and change farms. There are literally a TON of farms out there; new farms sprouting out every other week. Protocols can only bring us so far, do take charge and be the leader of your own defi success too.
ALRIGHT CAPPIES FARM STARTS IN 4 HOURS. Let's see how many easter eggs this bunny brings us. 😊😊
