Meet the Projects Working to Boost Your DeFi Yields
February 16th, 2021
Decentralized finance, or DeFi, has quickly grown to become one of the hottest trends in the cryptosphere today.
With the proliferation of decentralized exchanges, open lending platforms, yield farms, prediction markets, and a wide range of other DeFi use cases, cryptocurrency holders now have a wide array of options to turn a yield on their assets.
With so many options available, achieving the maximum possible yield can be a challenge. But fortunately enough, there are also plenty of projects out there looking to doing just that as simple as possible, some of the most prominent include:
EasyFi solves a major predicament that many cryptocurrency investors face at some point — should one asset be sold to buy another? On one hand, the first asset might have appreciated in value, while the second might not perform quite as well as expected.
Through EasyFi, cryptocurrency investments don’t need to be an if/or that scenario, it can be both. This, because EasyFi allows users to easily deposit their current assets as collateral to take out low-interest loans. This sum can then be used to purchase other profitable cryptocurrencies — without needing to sell any assets to raise capital for further investment.
As you might imagine, this allows investors to benefit from the capital appreciation of their collateral, while unlocking liquidity to make further investments — in essence, it’s like investing on leverage. So long as the investment appreciates faster than the interest due, a net gain is made. Given that interest rates tend to be just a few percent, while many cryptocurrencies have experienced several hundred percent growth in the last year, this should be a simple task for those with a discerning eye for high potential assets.
Being based on Matic Network (an Ethereum layer-2 scaling platform), EasyFi is also able to tackle another major profit drain — transaction fees. With Ethereum fees skyrocketing, EasyFi cuts fees dramatically, ensuring users no longer need to contend with exorbitant transaction fees when depositing/withdrawing collateral or repaying loans.
YOP Finance (YOP)
Billed as an ‘all-in-one yOptimization application’, YOP Finance aims to leverage the unique properties of Ethereum and Polkadot to help users easily maximize their yields.
Through YOP Finance’s yPlatform, users gain access to a huge range of DeFi markets in a single place, and benefit from curated insights that make it easy to maximize yields, rebalance their portfolio, and take advantage of some of the most popular yield farming and decentralized exchange platforms. Users are able to easily manage their DeFi investment portfolio across a range of popular DeFi platforms and protocols through its simple and intuitive user interface.
On top of this, users will be able to access a wide variety of market analytics thanks to YOP Finance’s ‘Smart Data Analysis’ tool, which leverages the power of artificial intelligence to generate useful insights about popular tokens and market trends, before distilling this into easy to use data for users to leverage in their yield optimization strategies.
The platform helps users maximize their yield by aggregating everything they need to spot and capitalize on investment opportunities others might miss.
Right now, YOP Finance supports DeFi applications built on Ethereum and Polkadot. But it also plans to integrate support for leading products on several other blockchains in the near future, including Binance Smart Chain, EOS, Solana, NEAR, and NEO — eventually giving users to power to manage their exposure across much of the DeFi landscape.
If you’ve ever used one of the numerous automated market maker (AMM) platforms out there, then you’d know there are essentially two ways to turn a yield from them.
The first is by executing profitable trades, e.g. buying low and selling high, just like on any regular cryptocurrency exchange. But the second option is rapidly growing in popularity with the surging interest in these platforms — we’re talking about providing liquidity.
By providing liquidity to a liquidity pool on an AMM like Uniswap, JustSwap, SushiSwap, etc., users earn a fraction of any trading fees generated when somebody extracts liquidity from the pool. This fraction depends on the total amount of liquidity provided relative to the size of the pool — such that someone providing one-tenth of the liquidity would earn one-tenth of the fees.
However, while most AMMs only pay out a proportion of the fees to current liquidity providers, SushiSwap has a slightly different model. This is because on SushiSwap 0.05% of the trading fees are distributed to holders of SUSHI tokens once they stake their tokens for xSUSHI. Meanwhile, the remaining 0.25% fee is distributed to current liquidity providers.
These SUSHI tokens are earned by initially providing liquidity, and can then be staked long-term to earn rewards forever — even once the initial liquidity has been pulled from the pool. This makes it suitable for those that favor long terms gains over short term profits.
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