How to Find the BEST DeFi Liquidity Pools (Crypto Passive Income)
https://www.youtube.com/watch?v=Qel38BU5Jpc
Transcript:
I’m going to be showing you how you can find the best DeFi liquidity pools using the all-in-one Metrix Finance liquidity provision software. So we’re going to dive right into this video, and since we are looking for liquidity pools, we are going to be using the Discover page. The Discover page on Metrix Finance is where it’s going to aggregate all the data.
It’s going to show a bunch of liquidity pools, practically thousands if we select all exchanges and all networks, and then from there we can decide to simulate performance. So we get a good idea on what our APR is actually going to be before we deploy and we make a data-driven decision. We could also build out the portfolio and track performance using Metrics Finance, but we won’t cover that in today’s video.
Anyways, most people when using Metrics Finance like to select just all exchanges and all networks, but my personal preference is segmenting these exchanges. And the reason why is because over on orca if we were to look at the fee to tbl ratio on these the highest ones are going to be 21 6.2 percent 5.
4 percent five percent whereas if we were to do the same exact thing over here on say these four exchanges you could see the highest fee to tbl ratio is 1.33 the data is a lot different so i like to segment between these four, and I like to go and segment between Orca and Radium, and then I like to segment between Velodrome and Aerodrome, just because there’s different data on each of these exchanges.
Now, when it comes to the actual networks, there’s not really much segmenting to do. If you want to select all, that’s completely fine. That’s if you don’t care about what networks you’re on. Personally, I find the best results on these networks right here. Ethereum, Arbitrum, Optimism, Polygon, Base, and BNB.
And that’s just simply because that’s where the majority of the TVL is for these four platforms up here. And these ones have minor amounts of TVL, maybe a couple million dollars, or maybe 10 to $20 million or so. I always like to put my TVL higher than $1 million.
And I like to do it lower than $50 million million dollars now some of you may ask why i’m doing it lower than 50 million dollars the reason why is because i don’t want to find a bunch of liquidity pools that already have a bunch of money in them that’s just going to waste space and really it’s only going to factor out like 10 pools or so but ultimately i want to find the pools that are kind of a little bit untapped and when i say untapped there’s still going to be pools out there with 43 million or something along those lines and those are still solid pools but ultimately the higher the tvl is a lot of the times the lower the apr is going to be in those
pools which is why i put a max of 50 million dollars and by the way guys today we are going to be using some of the metrics pro features which is a subscription for metrics finance again metrics finance is a free tool and then there are convenience features and advanced analytics if you do sign up for the pro subscription with that being said if you head to the link down below in description there is going to be an extended trial so instead of getting a five day free trial you are going to be getting a 14 day free trial so
there’s no risk whatsoever you can try this out try to make some money using metrics finance by finding better pools simulating accurate performance making data-driven decisions on your positions and then from there decide if you want to actually pursue with the $40 per month subscription.
And while we’re on the topic of subscriptions, if you guys are enjoying today’s video so far, make sure to drop a like and subscribe when notifications turned on so you don’t miss out the free value that we bring to DeFi strategies on YouTube. Anyways, I have a list of 548 pools right here. That’s still a lot to look through. So I personally always like to look through the assets first, right? So if I’m looking to pair stuff with Ethereum, and let’s just say some of those assets I want to pair with Ethereum are Aether, Render, Link, GRT, Aave, Unitoken.
I can just list those out right over here on the pool section. I type in the asset, I put a comma, I type in another asset, I put a comma, type in another asset. And this is going to show me all pools that include one of these assets. And then by putting must include ETH right over here, that’s going to show me pools that include ETH with one of these assets, basically.
So you’ll notice that now we only have 14 different pools. And this is a very, very easy way to just instantly see the pools that you want to include in your portfolio for assets that you are already aware of, that maybe you’re already comfortable with the risk. We have some good returns over here like 155 on ethereum to render there’s a hundred percent on ethereum to aether and it is important to keep in mind that these yields can be higher and the reason why is because metrics finance assumes a broader range
at the start on discover and then from there you can narrow down your range you could go with the tighter range and you can squeeze out more juice and get a higher apr but let’s just say maybe we’re not familiar with assets that we want to include in pools.
Well, I would still recommend typing in one asset over here, like must include ETH, if that’s what you’re looking for. Or if you’re looking for stablecoin ones, put must include USD. That’s going to show you ones paired with stablecoins. And the reason why is because you want to have a general idea of what type of pool you want to be in before you actually deposit.
So I usually like to be in stuff paired with eth so i’m going to type in eth from there i still have 416 different options so i usually filter my fees apr between 40 and 500 i personally do not like taking on exposure to the ultra high risk meme coins the meme coins that have no tbl stuff like that right i also don’t want to look for pools that have a return that’s so low that’s not worth it for me to manage so i do 40 to 500 because usually above 500 is those meme coins under 40 a return that’s so low that it’s not worth it for me to manage. So I do 40 to 500% because usually above 500% is those meme coins. Under 40% is stuff that’s not going
to get that good of a return. Now, even then 40% is low, but remember, as I said earlier, we can tighten up on the range and we can squeeze out more juice, which is why we assume 40. Because if we do go with the tighter range, we might end up getting 65, 80, hey, even 90, 100% depending on the pool.
And then we have 220 pools right here. I also like to go over the daily fees to TVL ratio, sort it so it’s in sequential order. And then I like to go to the middle ground in the actual pages. So you’ll notice that there are 22 pages here. I will go to page 11 and I will find the middle amount. And the middle amount right over here is going to be roughly 0.04%.
And I will do at least or higher than 0.04%. And the reason why I do that is because it cuts out the bottom half that’s not as good, that doesn’t have as high trading activity compared to the top half, basically. This is essentially displaying, hey, this pool right here has a $1 million TVL, but on average, on a daily basis, it has about $3,500 of daily fees. When we divide those daily fees by the TVL, we get this number right here so this is showing us pools that have a high amount of fees compared to the overall tvl and just like that we’re at 105 pools and if we really really really want to zone in and find even better pools we can sort by pools that
have volatility lower than 15 now that’s not going to cut out a lot but that cuts out seven we can even go down to like 13 or 10 or so uh and go down from there basically now in my opinion that’s not going to cut out a lot, but that cuts out seven. We can even go down to like 13% or 10% or so and go down from there basically.
Now, in my opinion, there’s not much of a difference between 80 pools and 105 pools. So I would just go about looking through these 105 pools. Now, as you’re looking through these pools, if you don’t know what these assets are, like Cosmic maybe, search them up on CoinGecko, pull up their website right from CoinGecko and learn more about their ecosystem and their project and one tip that i will give you is if you can’t find enough information about their ecosystem and project from their main landing page you probably should not invest into it they could have the best
product ever but if they do not know how to market their product which is the basics of having a good landing page and having a good website then you probably should not be investing into it like for example when you go over to metrics finance we tell you exactly what we do. We help you find the best pools.
We help you simulate the performance before investing. We help you build out portfolios with multiple positions and we help you track your position performance after you actually enter into your positions. You can see screenshots of what our app actually is and see how it exactly works. You can see all of our different features.
Each and every single site that you go to for cryptocurrency asset should be doing the same. It should be showing you all the information, telling you about it, telling you how they make money, right? Because you are investing into their ecosystem, you’re investing into their project.
So let’s just say that we were to do Aave token. Well, we would pull up Aave token right over here, and we’d head right over the website on Aave. And in this instance, it’s actually going to throw us over to the ave app but if we want to go to the ave website directly we just type in ave.
com it allows you to lend and borrow basically supply borrow swap and stake and more there’s 31 billion dollars of liquidity across ave you could see exactly how the model works you earn interest by supplying assets to pools and then you can borrow against your collateral which is the supply section for multiple networks and assets.
You can see the numbers, 31 billion in net deposits, 170 billion in volume, 7.11% average stablecoin supply APY on the Ethereum network last year. You can see all the data. So this is exactly how you should be analyzing websites. You’d be like, okay, what is this? And then from there, see how the actual token, in this case, Aave token, falls into the ecosystem.
So that right there is how you find the best pools. If you guys want us to make a video on how you can simulate potential performance and how we could say, okay, right here, we’re seeing 71%. Let’s dive into it. Let’s analyze this and see what type of return we can get after choosing a range, analyzing the volume, analyzing the liquidity distribution.
