Earning yield is the main appeal of decentralized finance and staking today. In addition, several assets and liquidity pools provide decent returns, although that isn’t the primary aspect to consider. Instead, users should look for options with high confidence and a stable yield outlook.
Many people show a keen interest in staking Ether through Lido. Eve though the Ethereum network does not support staking yet – it will do so after the Merge next month – users have been able to pool ETH in Lido to earn staking rewards. It is a good way to farm yield through existing assets, and the pool represents $6.9 billion in value. Users have an APY of 3.9%, and users maintain a stable/up outlook regarding returns and the stETH value. After all, stETH follows Ether’s price.
Liquidity pools remain a great way to establish a passive revenue stream without much effort. Finding the optimal liquidity pool can be tricky, but FRAX-3Crv offers some interesting potential. The pool has over $1.07 billion in liquidity and an APY of 2.43%. These rates may not be earth-shattering, but it is often best to take slightly lower rewards through a trusted platform over chasing nearly impossible returns.
Users who hold cUSDC in their portfolio can earn a 1.15% APY. Stablecoins often provide a far lower APY than volatile crypto asses, but they also offer peace of mind to investors and users. There is $1.07 billion in cUSDC engaged in earning that 1.15% APY today, which has proven to be one of the most stable rates overall. Moreover, stablecoins are a safer bet overall, and 1.15% APY is still better than keeping money in a bank account.
FRAX-3Crv (Convex Finance)
Remember that FRAX-3Crv pair we mentioned two paragraphs ago? You could take those same assets and deposit them through Convex Finance to earn a different yield. The APY of 4.85% is much higher compared to Curve’s rewards, and there is $1.06 billion in the pool today. It makes for an appealing alternative to using these assets through Curve itself, even if it involves creating a few extra transactions.
It is interesting and appealing to combine three of the most popular stablecoins into one solution bearing yield. While the 0.71% APY may not be spectacular, the rate is unlikely to drift below 0.57% for the foreseeable future. Moreover, the APY may increase over time, as these stablecoins are always in high demand. It is another appealing option accessible through the Curve protocol, which has attracted just under $1 billion in Total Value Locked.
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