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Web3 DeFi Tools

Web3 Yield Profits

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Liquidity Pools (LPs)

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Metrix.Finance

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DeFi Tools

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DeFi Trading Tools

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Liquidity Mining

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Uniswap LPs

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SUI DeFi Blockchain

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BNB DeFi Blockchain

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Video lesson

Smart Yield Farming

Smart Farmer’s Guide: Navigating DeFi Yields

In this lesson, we’re diving headfirst into the vibrant world of Decentralized Finance (DeFi) and exploring how you can uncover the hottest yield farming opportunities. With so many blockchains vying for attention and buzz, it can become a thrilling scavenger hunt to find the best returns. This subject is paramount not only because it can drastically impact your financial future but also offers a tantalizing glimpse into how traditional finance is being reimagined in the crypto space. From understanding the flow of money across different platforms to diving into those high-APY opportunities, you’re about to embark on a journey that will sharpen your financial acumen and familiarity with the cryptosphere.

Core Concepts

Decentralized Finance (DeFi)
In traditional finance, centralized institutions like banks facilitate transactions, loans, and investments. In contrast, DeFi enables peer-to-peer transactions on the blockchain without intermediaries. Insights into DeFi farming and its mechanics are essential for unlocking the full potential of your investments in the crypto world.
Yield Farming
Yield farming involves lending or staking cryptocurrency in order to earn rewards in the form of additional cryptocurrency. This is akin to earning interest on savings in a traditional savings account, but with potentially higher risk and rewards.
Total Value Locked (TVL)
TVL refers to the total amount of assets that are staked or locked in a DeFi platform. It’s a metric used to gauge a platform’s level of activity and trust among investors. Understanding TVL helps you identify robust and growing ecosystems.
Liquidity Providers (LPs)
Liquidity providers supply funds to a DeFi protocol to facilitate trading. By doing so, they earn a share of transaction fees. This concept is similar to investors providing capital for funds or exchanges in traditional finance.
Smart Contracts
Smart contracts are self-executing contracts with the terms of the agreement directly written into code. These are vital in DeFi since transactions occur automatically based on pre-set conditions, minimizing the need for intermediary oversight.
Bridging
Bridging allows users to transfer assets between different blockchain networks. This increases flexibility and opportunities for yield farming across various platforms, comparable to transferring funds between different banks or accounts in traditional finance.
APY (Annual Percentage Yield)
APY indicates the total amount of interest you can earn on your investment over one year, factoring in the effects of compounding. In the crypto ecosystem, APYs can be astronomically high compared to traditional savings accounts, making it a critical concept for investors to understand.

Understanding these concepts is crucial as they form the bedrock of not just your engagement in the crypto ecosystem but also give you insight into how this paradigm shift from traditional finance is manifesting.

Key Steps

1. Identifying Hot Farms

Key Points:
- Research which blockchains are attracting the most liquidity.
- Use platforms like DeFi Llama to track net flows by blockchain.
In the rapidly changing world of DeFi, staying updated with which platforms are gaining traction can offer you invaluable insights into where to stake your assets for maximum yield. Utilizing aggregate sources like DeFi Llama helps you spot trends and understand where funds are moving – essential for identifying profitable yield farming opportunities.

2. Evaluating Blockchain Platforms

Key Points:
- Look into more established blockchains (Ethereum, Binance Smart Chain).
- Compare with emerging players like Arbitrum and Solana.
Distinct blockchains offer various benefits such as transaction speed and costs. By evaluating blockchains based on user adoption and their capabilities in facilitating DeFi transactions, you’ll be better positioned to make informed investment decisions.

3. Checking Total Value Locked

Key Points:
- Assess the TVL of potential platforms.
- A growing TVL indicates increasing usage and trust.
TVL not only gives you a snapshot of a blockchain’s health but also reveals investor sentiment. Platforms with a growing TVL signal that users are finding value – a bright flashing sign that these could be areas worth exploring for lucrative yield farming.

4. Understanding Liquidity Metrics

Key Points:
- Look for liquidity in the pools of interest.
- Consider the historical performance and stability of the liquidity metrics.
The liquidity of a pool can directly impact your returns. So, evaluating the health and activity of strategically chosen liquidity pools ensures that you make informed decisions before committing your assets, especially in the unpredictable realm of DeFi.

5. Exploring Crypto Projects

Key Points:
- Investigate different DeFi projects.
- Check for audits and community feedback before entering new investments.
Each new project offers unique opportunities and risks. By vetting projects for due diligence standards such as audits, user reviews, and historical performance, you equip yourself with better decision-making tools to navigate the crypto landscape effectively.

Incorporating these steps not only enhances your DeFi navigation skills but paves the way for a deeper understanding of how these elements interconnect within the broader crypto ecosystem.

Crypton Yield Farming

When you look at these steps through the lens of traditional finance, they mirror the levels of due diligence and research that investors undertake in the stock market, choosing diversified portfolios based on market sentiment. The main difference lies in the speed and scope of innovation in the crypto space, with DeFi presenting opportunities that were virtually inconceivable within traditional frameworks.

Real-World Applications

Historically, the DeFi sector has evolved rapidly, resembling a gold rush as users sought to capitalize on high APYs and unique opportunities like liquidity mining. The rise of platforms like Uniswap and PancakeSwap exemplifies how decentralized exchanges can challenge their centralized counterparts by offering users greater autonomy and potential profits. Additionally, however, challenges such as liquidity fragmentation and regulatory uncertainty remain as hurdles in the path of this promising frontier.

Challenges and Solutions

While the potential of DeFi is vast, challenges persist:

Market Volatility: Cryptocurrencies are often more volatile than traditional assets.
- Solution: Diversifying investments across multiple protocols can mitigate risks.
Smart Contract Risks: Vulnerabilities within contracts can be exploited.
- Solution: Always prioritize using audited projects to increase safety.

Misconceptions abound as newcomers may think the crypto market is solely driven by speculation. While speculative trading exists, fundamental analysis of DeFi projects allows you to seek out sound investment opportunities based on growth prospects and utility rather than just hype.

Key Takeaways

Understand DeFi vs. traditional finance – the decentralized approach can offer greater opportunities.
The importance of TVL – insightful metrics for judging where to invest.
Yield farming offers potential profits, but be cautious of risks.
Smart contracts unlock efficiency in DeFi that traditional finance cannot match.
Evaluate each platform’s liquidity carefully before diving into investment.
Continuous research is key – the landscape is constantly evolving.

Arming yourself with these insights positions you to intelligently navigate both the thrilling highs and daunting lows of the crypto markets while generating a powerful toolkit to apply throughout your journey.

Discussion Questions and Scenarios

How does the yield potential in DeFi compare to traditional savings accounts, considering risk?
What factors might cause liquidity to flow from one blockchain to another?
Compare a centralized exchange to a DeFi platform. What are the pros and cons of each?
If you were to stake your assets, how would you determine which project to invest in?
What experiences have you had with market volatility, and how did you adjust your holdings?
How critical do you consider the concept of auditing in ensuring the safety of your investments?
In what way do you believe blockchain technology is reshaping the functionality of finance?

Glossary

Decentralized Finance (DeFi): Financial services without traditional intermediaries, operating on the blockchain.
Yield Farming: Earning rewards through lending or staking cryptocurrency.
Total Value Locked (TVL): A metric indicating the total capital in a DeFi project.
Liquidity Providers (LPs): Users who stake assets to facilitate trading and earn rewards.
Smart Contracts: Automated contracts that execute operations based on specified criteria without intermediaries.
Bridging: Transferring assets across different blockchain networks for seamless operations.
APY: A calculation indicating the yield or returns on an investment over one year, considering compounding.

As you venture forth, remember that knowledge is the best investment you can make, particularly in the volatile and exhilarating world of cryptocurrencies. Each lesson further prunes your understanding as a crypto enthusiast.

Continue to Next Lesson

Prepare to dive even deeper into the complex, inviting world of cryptocurrencies with the next lesson in the Crypto is FIRE (CFIRE) training program. The journey is just beginning!

Read Video Transcript

The Smart Farmer’s Guide: Finding Hot DeFi Yields

https://www.youtube.com/watch?v=LMj2qplSoEc

Transcript:

how do you find hot farms what blockchain could they potentially be on we’ll cover that in this video if you don’t know who i am my name is seb monty and i am the general manager of validator.com stake your soul with us you must stake your soul staking your soul gives you 11 approximately apy and if you don’t do it then you lose out to inflation got plenty more videos covering that but if you’re here because of d5 gains then then that’s what I’m very, very keen on. However, not everything is going to work out. So of course,

nothing is financial advice. I’m just going to say it once. Nothing is financial advice. I’m telling you what I’m doing. I’m telling you how I think. And then you can put your comments below. If you’ve got a different viewpoint, go for it. Point is, crypto, we’re here to make money. We’re here to have some fun. It’s addictive making money.

It’s magical internet money. And I think it’s worthwhile. Most of my profits will, of course, go into staking soul. Okay, so how do we actually work out where money is going to be treated best? Well, it depends in crypto, which is kind of small. It depends on bridged volume. We can really only make money with smart contracts. So you can buy Bitcoin, Bitcoin can go up, and then you can sell Bitcoin.

That’s making money, of course, but you can’t liquidity provide or whatever. So we need a blockchain with smart contracts. We need a blockchain that has a whole lot of traction. Cardano doesn’t have a whole lot of traction. Maybe it does sometime this cycle. I’m not going to have a dig at the Cardano doesn’t have a whole lot of traction. Maybe it does sometime this cycle. I’m not gonna have a dig at the Cardano Bros but probably not.

The truth is probably not. So if we go to DeFi Llama, this is the best aggregate source for information, we can see the net flows by blockchain in the last day and right now Arbitrum is getting a whole lot of love 30 milli Binance chain 16.5 sizable amount of money is leaving Ethereum but then where is it going it doesn’t actually show where it’s going that’s strange some money is leaving Solana if we have a look at over the last month we can see Arbitrum is getting a huge amount.

I have no idea why, honestly. And Solana is getting a sizable amount. And then once again, it’s leaving Ethereum. Now, when we see funds go from one ecosystem to another and they continue to go like that, that is a good indicator. It’s a good indicator that money’s going where it’s treated best we can also check out d bridge d bridge is my preferred bridge i do not like a token i don’t think it has good tokenomics mentioned that before just don’t think this upside the token at present last seven days you can see a whole lot of money moved to b and b chain b and b chain is you know created by binance cz is the goat of crypto and he uh

he’s going to put some love into b and b chain it’s not going to be as good as solana but it could be a very good opportunity we’ve got b and b chain we’ve got bear chain there are other ones that will prop up and they could have some decent farming rewards so when you see money go into an ecosystem like here i really don’t see why arbitrum’s getting so much love not on this bridge maybe on another bridge but there could be opportunities this is over the last seven days we would also want to check it over the last day because this couldn’t dictate moves okay so money’s moving. BNB is still leading. Far and wide, they’re leading.

I would love to see Abstract get some love. Abstract, of course, attached to Lucanet and Pudgy Penguins. The issue is they don’t do DeFi. And this is where we can also work out a bit of information here in case I miss something or you do your own research, which of course is your goal.

It’s my goal goal for you you go have a look at the overview and you can have a look at like the top blockchains ethereum’s the top however most of it’s not really active it kind of passively sits there doesn’t really earn much solana’s pretty close to probably being the next but it could be a little bit different but you can also just type in something like i think su Sui’s managing to grow their TVL. This is important, a growing TVL.

And abstract is not, but we’ll check it out. It’s not growing TVL even like over the month. BearerChain has a whole lot. A lot of it is like staked ETH. So it’s not really growing, but it has grown a little bit. In fact, it’s grown quite a bit, to be perfectly perfectly honest since main net went out a couple of days ago now to work out arbitrum we could have a look directly at arbitrum we can have a look at the category that is like dexes dexes liquidity managers things like that and we’d probably want to put in a tvr range we would want a minimal

amount we could of course just search by TVL Lending is not going to do us any good Uni swaps over here and we can have a look and see what’s kind of cooking personally, I do think pancake gets a whole lot of love and We can come to pancake because some multiple networks a whole lot of networks, most of the liquidity, I think, being on BNB chain.

And we can search by the APR and see what’s cooking. If it’s low TVL, we can’t get into anything that has low TVL. Like if you jump onto base chain, and that’s probably going to be also a very worthwhile place to play. All these things with less than $100,000 worth of liquidity, not going to be worthwhile.

There’s Andy. I don’t know what Andy is. I’m assuming it’s a meme coin. This could be pretty decent, but we’d have to go through and give it a little bit of an assessment. What you want to look at is you want to see how the liquidity has been over the last few days. I’m not sure if that’s showing us like that.

Volume’s going down. The fee in 24 hours, that’s kind of low to be honest. TVL is quite low as well though. So I guess when you factor that in, it’s pretty decent. Volume has increased. So maybe this would be something worth looking at. We can view this on BSC scan and it’ll show us two different tokens.

Go find Andy. There’ll be an easy way to do it, but this is the way that I’m going to do it. Go and grab the contract address. We can see the market cap, but it’s probably a good idea if we go and have a look at CoinGecko. Go to CoinGecko. Paste it in. AndyBSC. I have no idea what this is. I’ve never seen this token before in my life.

Have a look how long it’s been going for. It’s been going for only a couple of days. It’s a $17 million market cap. Andy token, it’s down 21% on the day. It’s got a, well, nothing too exciting, but could be kind of cool. This might be worth jumping into, but probably a little bit too high risk for me. Now, if we go to Uniswap, I’m unsure if there’s anything like properly cooking.

We can select the protocol on networks and the APR is nothing crazy. I think Unichain itself will start to cook. It will certainly start to cook. We’ve got ETH and SHELL on Unichain go and copy that go back to CoinGecko paste that in here see if we can find it this liquidity pool this is printing and there might be some Uni rewards coming so this would be something I would definitely look into I would need to see you know it’s ETH and shell. What is his shell? So we may want to get into this. I would cover this blockchain another day because

I need to learn a few things about it, see if there’s any liquidity rewards. But TVL is low. It’s earning thousands of dollars in fees. It could be worth it jumping in here for seven days, not a long term. And I’m more referring to in the previous video, compounding my position in terms of compounding our earnings through multiple positions.

We wouldn’t sit in this for 180 days, most likely. There’s plenty of other dApps that I haven’t heard of. So I would have a look at them. You would have a look at them. You’d have a look at other YouTube reviews on it. You check if it’s audited. You want to make sure there’s an audit. It doesn’t mean that it’s safe.

It just means that it has been checked. It is safer. So this super form could be good. No idea what it is, but maybe. But the last one I kind of want to show is Aerodrome. This is based on quite a few different networks, actually, I believe. But liquidity here can certainly print.

I to play around stick to get familiar because I don’t fully understand it and then permanent loss could be quite sizable we want to avoid that as much as possible but some of these pools are really really cooking I mean look at this one USDC and Trump if you can earn 9,000% or more. Fees, I mean 10,000 on $184,000 worth of liquidity. This could be definitely worth it.

But that’s just an overview of how I’m looking for where our money could be treated best. I want to end just by saying nothing I say is financial advice. Sometimes I’ll get it right. Sometimes I get it wrong. Anyway, I believe it’s addictive. I believe it’s fun. I believe it’s worth learning. You can just chase meme coins if you want to. You’ll probably end up wrecked. You can just stake your soul if you want to.

I would certainly appreciate that. However, you may want a little bit more upside to grow your portfolio, in which case I think DeFi farming is the way to go. In general though, I think it’s very fun, very addictive, so you may want to check it out and stay tuned.