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EVERYTHING YOU NEED TO KNOW ABOUT YIELD AGGREGATORS

By Bolide | Bolide Finance Blog | 13 Jul 2022


Yield aggregators – the words on every crypto investor’s lips in 2022. 

Pancake swap, Beefy Finance, Pickle, and Bolide.fi are some of the best yield aggregators out there. Weird and wacky names and even more surprising are their financial results.

So, what exactly are Yield Aggregators, and how do they work? The answer to this question lies in staking and farming. 

What Are Yield Aggregators?

In a nutshell, yield aggregators are tools that hunt for pools to maximize returns on invested capital, automatically reinvesting interest earned on yields. Decentralized protocols deploy users’ deposits across multiple DeFi yield farms earning both yields and rewards.  

Yield farming is a strategy to generate a passive income with rocket-fuelled APYs by providing liquidity to DeFi staking pools, locking their money into a DeFi app, and earning yields and crypto rewards over time. 

Yield Farming Aggregator Investment Opportunities

Generally, there are two types of yield farming opportunities: LP farms and staking farms, which involve different types of contracts. Let’s quickly run through some of these investment products.  

LP farms

Users deposit coins or tokens into smart contracts that facilitate liquidity pools. These pools function as a decentralized trading pair between two or more cryptocurrencies, and trading is made possible by the crypto supplied by LPs. 

DeFi apps reward users with tokens plus any interest you’ve earned through trading fees in exchange for deposits. 

Stake farms

Users deposit crypto into smart contracts that facilitate a staking pool similar to a decentralized vault for a single kind of asset, securing deposits rather than depositing trades. 

Other kinds of yield farming

More and more DeFi projects have launched liquidity mining programs, such as Arbitrage, Insurance, and Trade mining. 

Arbitrage mining 

Crypto arbitrage trading is a trading strategy where investors make money on the price differences of digital assets across multiple markets or exchanges. Crypto arbitrage trading means buying a digital asset on one exchange and selling it on another where the price is higher. 

Insurance mining 

Insurance mining means rewarding users who deposit assets into decentralized insurance funds. Depositors earn governance tokens in exchange for putting funds forward to help projects from going underwater. That said, these funds are risky since successful insurance claims will be paid out against them.

TVL Explained

TVL means “total value locked” and indicates the amount of crypto deposited into a yield farm’s underlying liquidity pools or staking pools. 

DeFi uses TVL similarly to traditional finance’s assets under management (AUM) metric. If a yield farm has a $500 million TVL, that means there’s currently $500 million deposited into that farm. 

 APY vs. APR

In the DeFi ecosystem, (APR) or annual percentage rate and (APY) or annual percentage yields indicate how much interest users earn on their deposits into yield farms. 

APR tracks how much interest a user will earn on their tokens over the course of a year, whereas APY tracks how much a deposit will earn in a yield farm over the course of the year if its interest earnings are reinvested in the farm continuously. 

As an investor, find out Whether a project uses APR or APY to track its yield opportunities, as earnings can be affected by changes in participants, token distribution schedules, and trading fees. Better to think of a yield farm’s APR or APY as just a snapshot of current yield performance rather than a fixed, unchanging interest rate for a set period.  

Low Risk, High Yield Solutions

Low-risk investing with high yields – that’s what yield aggregators are all about.  

And that’s where the smart money is heading. Over the last couple of years, many crypto investors are investing stablecoins in High Yield Farming Aggregators.

DeFi high yield farming aggregators offer a one-stop automated investment strategy. Simply deposit your stablecoins into an index tracking portfolio that rebalances your assets across the DeFi spectrum, hunting down the best investment opportunities and giving you market-leading yields with instant access to your assets. And you can choose your level of risk while enjoying APYs of up to 30%. 

Here’s a quick summary of the benefits.

  • Low risk, market-leading yields of up to 15% APY
  • Earn an extra 20% staking your BLID tokens and enjoy 11% APY on farming 
  • Hands-off, passive automated investments using your stablecoins 
  • Access your funds and profits instantly

Awesome yields that really take some beating. 

Earn interest at the speed of light with Bolide’s high-yield aggregator!

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