Curriculum

Web3 DeFi Tools

Web3 Yield Profits

0/10

Liquidity Pools (LPs)

0/7

Metrix.Finance

0/7

DeFi Tools

0/14

DeFi Trading Tools

0/6

Liquidity Mining

0/5

Uniswap LPs

0/5

SUI DeFi Blockchain

0/3

BNB DeFi Blockchain

0/1

Video lesson

How to Find High APR BTC ETH LPs

How to Find High Yield (APR) BTC + ETH Liquidity Pools

In this lesson, you will discover how to identify blue chip asset liquidity pools and their significant potential for generating passive income. Understanding liquidity pools is essential for anyone interested in both traditional finance and the rapidly evolving realm of cryptocurrencies. You’ll learn how to navigate different tools and strategies to maximize returns while mitigating risks—skills that are indispensable in today’s financial landscape, whether you are trading stocks or cryptocurrencies.

Core Concepts

Liquidity Pools
In traditional finance, a liquidity pool is a collection of assets that provides liquidity for trading activities. In the crypto world, liquidity pools are smart contracts that hold funds on decentralized platforms, enabling users to swap tokens seamlessly. Understanding liquidity pools allows you to participate in decentralized finance (DeFi) and earn fees while helping to facilitate trading.
APR (Annual Percentage Rate)
APR is a standard measure in traditional finance to express the annual cost of borrowing or the return on investment, including interest. In crypto, APR reflects the potential yield you can earn from providing liquidity in a pool. It’s important to grasp APR because it quantifies your earning potential, guiding your investment decisions.
TVL (Total Value Locked)
TVL indicates the total assets locked in a DeFi protocol. In traditional finance, this may translate to total assets under management in a fund. A higher TVL often indicates a more established and trusted liquidity pool, leading to better returns and lower risk.
Wrapped Assets
Wrapped assets in Bitcoin or Ethereum are tokens that represent the value of the underlying asset on a different blockchain. They allow users to leverage the benefits of both ecosystems without actually holding the original coins. For crypto enthusiasts, understanding wrapped assets expands trading opportunities and enhances liquidity.
Correlation
In finance, correlation measures how asset prices move together. In crypto, understanding the correlation between different tokens in a liquidity pool helps you gauge the risk of impermanent loss. Lower correlation typically suggests reduced risk when investing in liquidity pools consisting of a stablecoin and a volatile asset.
Simulation Tools
These tools allow potential investors to predict the outcomes of their investments using historical data. They can calculate projected returns, fees, and risks associated with different liquidity pools. This foresight is invaluable for making informed investment decisions in both traditional finance and the crypto space.
Portfolio Tracking
Just as investors in traditional finance monitor their portfolios for performance, crypto investors can use tools to track their investments and yields. Understanding how to track your portfolio effectively can help you adjust strategies based on performance metrics.

Key Steps

Finding Blue Chip Asset Liquidity Pools

Launch the Metrix.Finance Web App: Start by navigating to the Discover section to explore liquidity pools.
Select Exchanges and Networks: Opt for all exchanges and networks to discover various liquidity pools.
Use Filters: Filter your search by entering “”wrapped Bitcoin,”” “”wrapped Ethereum,”” or other blue chip assets under the “”must include”” section.
Analyze Results: Once you narrow it down, analyze the pool metrics, including fees and projected APR.

Explanation: By using the Metrix.Finance web-app software, you access a comprehensive overview of available liquidity pools. Understanding this step helps you make data-driven decisions instead of relying on guesswork.

Simulating Potential Returns

Estimate Your Deposit: Input the investment amount for simulation.
Set a Range: Determine your investment range to forecast potential APR and fees.
Zoom Out for Historical Data: Review the pool’s history over past days to predict future performance.

Explanation: Simulation tools mitigate the risk of obscure investments by allowing you to visualize potential outcomes. Just as you would consult past returns in traditional finance, these simulations provide the data needed in the crypto arena.

Save and Track Your Portfolio

Save Your Investments: Utilize the save feature to keep track of selected liquidity pools.
Monitor Your Wallet: Regularly check your wallet for updated data on earnings, ROI, and performance.

Explanation: Keeping a close eye on your investments helps you understand market trends and adjust strategies. Regular portfolio tracking is essential in both traditional investing and crypto endeavors.

Make Informed Transactions

Access Decentralized Exchanges (DEXs): Once you identify profitable pools, use a DEX like Orca to execute your trades.
Evaluate Ongoing Performance: Leverage tracking features to assess ongoing performance metrics.

Explanation: Engaging with DEXs allows you to act on your research while using reliable tracking methods to reassess and adapt your strategies.

DeFi Blockchain Passive Income

Finding BTC & ETH (Blue Chip Asset) Liquidity Pools

When participating in liquidity pools containing blue chip assets like Ethereum and Bitcoin on platforms like Metrix.Finance, you engage in a decentralized risk-sharing model that diverges from traditional investment vehicles. Here, liquidity pools function as open-access funds that any user can join—creating new opportunities for everyday investors and democratizing access to wealth generation.

Examples of this include wrapped Bitcoin (WBTC) being swapped for stablecoins, allowing you to retain the value of your original investment while earning yields on stable assets. The crypto world offers an opportunity to create your diversified portfolio with lower entry barriers compared to traditional funds.

Examples

No specific visual aids or graphs were mentioned, but understanding the potential application of these concepts in real-world trading can solidify your grasp on liquidity pools.

Hypothetical Examples:

Traditional Finance: Imagine you invest $10,000 into a mutual fund with an APR of 7%. After a year, your investment grows to $10,700.
Crypto: Now visualize providing liquidity in a pool with wrapped Ethereum and USDC where you project an APR of 10%. Your $10,000 could grow to $11,000 in one year—an enticing alternative!

Real-World Applications

Historically, liquidity pools have reshaped how individuals interact with finance. In DeFi, they offer advantages like higher yields on investments compared to traditional bank savings accounts. As these pools proliferate, analyzing risks and benefits alongside historical data is increasingly important for both casual and expert investors.

Cause and Effect Relationships

A promising liquidity pool leads to increased participation, raising the TVL and, consequently, the APR. Conversely, high volatility in underlying assets might lead to impermanent loss for investors. Understanding these dynamics is paramount for you to make prudent investment decisions.

Similar Dynamics in Crypto

In response to market fluctuations, a liquidity pool paired with a stablecoin offers resilience amidst volatility. This model can provide stable returns even during turbulent market periods, creating a safer environment for investors, akin to diversification strategies in traditional finance.

Challenges and Solutions

Challenges:

Impermanent Loss: A common risk in liquidity pools where changes in asset price lead to losses compared to holding the assets directly.
Market Volatility: Rapid price changes can underpin risk factors in liquidity pools.

Solutions:

Hedging with Stable Assets: Entering pools with stablecoins and blue chip assets mitigates exposure.
Education and Tools: Utilizing simulation tools and portfolio trackers helps you make informed decisions.

You might be concerned about these risks, but being educated and using the right strategies can help you navigate the crypto landscape.

Key Takeaways

Liquidity Pools Functionality: Essential for understanding DeFi mechanics.
Importance of APR: Crucial for evaluating potential investment returns.
Role of TVL: Reflects the trustworthiness and popularity of pools.
Utilizing Simulation Tools: Allows for forecasting returns and assessing risk.
Portfolio Tracking Necessity: Keeps your investments under scrutiny for better decision-making.

By remembering these points, you’ll be better equipped to make wise financial decisions in the cryptocurrency space while applying lessons learned from traditional finance.

Discussion Questions and Scenarios

How does investing in liquidity pools compare to purchasing stocks in terms of risk and return?
What factors should you consider when choosing a liquidity pool?
Discuss the implications of high TVL in a liquidity pool on potential returns.
How do wrapped assets facilitate liquidity and investment strategies?
Compare and contrast the impermanent loss concept in crypto to traditional market risks.

Hypothetical Scenario:

Imagine a situation where the price of wrapped Bitcoin plummets while the stablecoin maintains its value. How would this affect your liquidity pool investments?

Glossary

Liquidity Pool: A smart contract that holds funds to facilitate trading.
APR (Annual Percentage Rate): A metric that shows annual return on investment.
TVL (Total Value Locked): Represents the total assets secured in a financial ecosystem.
Wrapped Assets: Tokens reflecting the value of original assets on another blockchain.
Correlation: A measurement of how assets’ prices move in relation to each other.
Simulation Tools: Software for predicting potential investment outcomes based on parameters.

As you move forward in your learning journey, remember these vital concepts of liquidity pools as you delve deeper into the innovative landscape of cryptocurrencies. You’re well on your way to mastering the art of passive income through crypto investments.

Continue to Next Lesson

Ready to dive deeper? Continue on with the next lesson in the Crypto Is FIRE (CFIRE) training program to further enhance your crypto journey!

Read Video Transcript

How To Find High APR Blue Chip Liquidity Pools (Passive Income)

https://www.youtube.com/watch?v=5KQW3WUqZnQ

Transcript:

So this is an overview on how you can find blue chip asset liquidity pools and we’re going to be using the software Metrix Finance. It’s truly the best software for finding liquidity pool opportunities, simulating your returns to see what type of returns you could be making on the opportunities, and also building out and tracking your portfolio.

So we can go ahead and launch the app right here and head on over to Discover at the top. Now there is a free and paid version of the software, but don’t worry. In the description, you can claim a free 30-day trial of the pro version. And here we can select our exchanges and networks that we want to look through. So first, I’m going to go ahead and select all exchanges and all networks.

And it shows 1,926 pools. That’s a lot of pools to go through. And a lot of these aren’t just blue chip assets. So basically what we do is go to this little filter button next to where it says pool and type in for the include section. We could type in the assets we want to include. But if we wanted to only get in pools, for example, that had wrapped Bitcoin or wrapped Ethereum, we could type that in the must include.

But for now, I’m just going to use the include section. we could type that in the must include. But for now, I’m just going to use the include section. So we can type in wrapped Ethereum, wrapped Bitcoin, USDC, Solana, other blue chip assets. So there’s 1,926 pools. That’s a lot to sort through. And to find the blue chip assets, it can be a bit tough at times.

So we can go ahead and go to the pool section, this little filter button, and type in assets that must be included. So say we wanna look for positions that have wrapped Ethereum. We can type in wrapped Ethereum, and then boom. Now we have 1,049 pools. These all have wrapped Ethereum. But if we type in USDC, now we’ll see only 32 pools in the top right.

So now we’ll see a ton of positions that only have wrapped Ethereum to USDC. I personally only like taking on exposure to blue chip asset liquidity pools. So this is a great strategy for people like me. You can see all the wrapped Ethereum to USDC positions as well as their TVL, their fees, APR, et cetera.

So for this top one, we can go ahead and simulate it in a new tab and you can enter your sample deposit amount you’re looking to deposit for your next investment i’ll type in ten thousand dollars here for the sake of this video and you can scroll down and find your range here at builder wealth we have other videos covering how to find your range but in today’s video i’m just showing you how to find these positions so say i want to have this range or i want to make it a bit broader we can scroll up and see the projected yearly APR along with the estimated monthly APR and the estimated fees we’d be getting per 24 hours. Scrolling down,

you can take a look at the calculation range. You can zoom out to see how this pool has played out over the past 90 days or a past 130 days, etc. And then you can zoom back in to try to get the most accurate simulation possible. Then we have our volume history. It’s really cool that on the software you can see things like the past volume history.

You can even zoom out and see the past volume history. It’s very neat and you can even see the top positions if you want to take a look at top positions for this. You can see how correlated the assets are. This is available on the pro plan but like I said you can claim a free trial. These assets are seven percent correlated they’re pretty much not correlated at all since it’s wrapped ethereum paired with a stable coin and you can even edit with the current prices to see the difference in apr you’d be getting

depending at a different price and you can even change the current price for the simulation if you want to see your apr at a different price point so if you want to take on exposure to the assets you’re looking at and get into the liquidity pool you can save your portfolio in the top right hit the save to portfolio button then you can go to the build section at the top and you can see the pools that you have selected so i’m gonna go ahead and change this one to a 30-day calculation range and now we

can see that with this pool we have a high level overview we can see the estimated fees the monthly yearly etc and we can go ahead and look at other positions you can do the same thing this time we can look at wrapped bitcoin to usdc for example say we want to take a look at this one we can simulate it in a new tab here and enter our deposit amount again and find our range just like last time i’m gonna have this one pretty broad again.

And now we have our range sets and we can go ahead and save it to our portfolio for later. And you can go through, find your opportunities and simulate the positions. So I’ll go ahead and do it for Solana too, since I am currently already in this position on my own personal portfolio. So I’ll go ahead and save that one to my portfolio as well.

And then you can go to the build section and see the current liquidity pools you have saved. And you can edit the range and see the current liquidity pools you have saved and you can edit the range and see the fees apr etc i’m going to match them all to the same calculation range so they’re all set to 30 so it’s easier to look at and understand there we go and from here you would go to the decentralized exchange of your choice so for example if there’s a pool like this one on orca usdc to seoul on orca you’d go to Orca and enter it. And then if you wanna track, for example,

a Uniswap position, just like this one, you could go to the track feature at the top, paste in your wallet address. You can see your current liquidity, your earnings, your profit and loss, your ROI, and other data. It’s super helpful. So if you enjoyed this video, subscribe, hit the notification bell so you don’t miss an upload, and check out Metrics Finance in the link below.