Crypto Yield Farming is fun, and stablecoin yield farming is safe.
Safety and reliability of income sources are very important for me since I'm on the path to become a crypto digital nomad.
That being said, I'm looking for multiple stablecoin yield farming strategies***.
*** I also refer to staking when I use the term "stablecoin yield farming".
But before to jump into it, I'd like to bring your attention on several advantages to have stablecoin strategies. Because to tell you all, I like risk, and I had to wider my vision a little bit to understand the potential benefits :
Stablecoins Yield Farming Advantages
Here are some advantages to stablecoins yield farming. They may not all be relevant to your case or mine but whatever. Let's make this helpful for everyone !
#1 Stablecoins Yield Farming is your best bear market edge
Having a reliable passive income source is the best way to stay cool during a bear market. I don't know for you, but each time we are in bear market, I'm also not in the mood of investing, or always have some other expenses to take care of before thinking crypto. What I want to say is, during bear market, I will always find a good excuse to not invest as much as I would have planed.
Understanding that, I'd like to have an income source I could use to :
- DCA during bear markets
- Take profits to consolidate stablecoins positions during bull markets
#2 Stablecoins yield farming is a good bet for crypto boomer
We are the future crypto boomer, the one who will be like "I was here when BTC was only 50k". So let's not make fun at the one of our current age.
Most of them have deep pocket, are heavily invested in stocks and don't consider crypto safe at all.However, considering some platforms like Nexo offer up to 12% on stablecoin or fiat, it's definitely a good way for a crypto boomer to get exposure to crypto with a very low risk.
They can either use the earnings to buy crypto, or get paid in crypto.
#3 Stablecoins yield farming for online business owner
No matter if you sell physical or digital products online, having a yield farming strategy using stablecoin can be very helpful for an online business.
Centralized exchanges like for instance Nexo offers the possibility to open a business account. It's a nice way to keep your dollars or whatever fiat currency working for you. In fact, you can view each dollar made by your business as a "miner" who will work for you on these plateform, untill you moove him because you need him.
#4 You are taking the safest path to do yield farming using stablecoin
Even if you won't find degen APYs on stablecoins, your interest will be way higher than on a traditionnal bank account. Furthermore, you are not dealing with impermanent loss, which can be very tought for a beginner. Also, you have no risks doing leverage yield farmig".
My top Stablecoin yield farming strategies
Safest and easiest stablecoin strategies
That's what all of our crypto boomer dads, uncle, cousins need. A simple way to stake stablecoin and earn much more interest than in a normal bank.
You will earn from 8% to 12% on your stablecoins, or fiat currencies. I'd suggest you to take your interest in Nexo token at first. This way, when your Nexo earning will represent 10% or more of your total holding, you wil become a platinum member, and get better interest on both lending and borrowing.
Nexo's Pros :
- Safe platform
- Beginner friendly
- Ability to take loans on your cryptos or fiat
- You can earn interest on your collateralized Nexo
- Bitgo Digital Asser Inssurance
- Mobile App
Nexo's Con's :
- The swap service is not the cheapest (use your prefered exchange to swap tokens)
Celcius is one of the other big player, and it's a direct competitor to Nexo, with his token Celcius. You will earn a little bit less than on Nexo but the stablecoin list is bigger. In my opinion, despite lower rates, Celcius can be a good bet because the team is developping an insurance service for crypto holders. I also want to mention that Celcius is about to list Yearn.finance, Curve DAO Token, and HBAR. Even if we're focusing on stablecoins strategies.
I'd use both Nexo and Celcius to spread the systemic risk.
Celcius Pros :
- Safe platform
- Self-insurance feature incoming
- Transfer money very fast with the CelPay feature
- Mobile App
Celcius Cons :
- Lower interest rates
Vauld is a earn, trade and borrow crypto platform. They claim to be an "automatic crypto wealth builder", and they might be right.
The platform offers up to 12,7% annual rate on stablecoins, and the minimum rate is 9.4%, depending on if you choose to lock or not your stablecoins.
Vauld's Pros :
- Better interest rate
- The best interface so far
- Wide choice of cryptocurrencies
- Bitgo Digital Asser Inssurance
- Cashback program
Vauld's Cons :
- You can't earn interest on some crypto such as Doge, Dot, or BNB
- Commissions on interest Payouts : 1.25% cashback
- Commission on trading fees : 10% cashback
- Commission on loan interest : 1.25% cashback
The promo code I used to get cashback is : Publish0x
Some riskier strategies - A step into liquidity pools
Pancakeswap.finance is the most famous Dapp on the Binance Smart Chain. A lot of people quit at this step because it can seems difficult. But trust me, it's not.
Here are some helpful ressources to get started with Pancakeswap.finance on the Binance Smart Chain :
How to install Metamask on your web browser ?
How to install Binance Smart Chain on Metamask ?
How to use Pancakeswap ?
Ok, now you've set up all needed, let's see how to build our stablecoin yield farming strategy on Pancakeswap :
1. Choosing a stablecoin liquidity farm
Depending on the pair, you will get between 7% and 9% return in $CAKE, the native token. But don't worry, we're still focused on earning stablecoin, not Cake.
In order to get into one of this, you will have to bring for instancee both $500 worth of DAI and BUSD if you want to invest 1k in this farm.
Now, you are earning $CAKE on a regular basis.
With your earned Cake, you will find a stablecoin pool. You will stake Cake earned from stablecoin, to earn more stablecoin.
Rewards will end in 250k blocks which is approximatively 8 days. But keep in mind, on Pancakeswap, there is always at least 1 stablecoin pool, and they usually last for 2 months.
Here, your rewards in stablecoin are much higher than that we've seen before, but keep in mind all of this comes with more risk :
- Pancakeswap is decentralized exchanged, and can be more subject to hacks
- $CAKE value can fluctuate a lot
- If your computer, or even only your web wallet is hacked, you are f***** up
On the long term you can either :
- Lower the risk by staking your earned stablecoins on a plateform mentioned above
- Take that profit and get exposure to a risker stablecoin strategy (as the one I'm about to show you)
Not riskier, but different - Introduction to leveraged stablecoin yield farming
Leverageg yield farming is a method where you get interest on both lending and borrowing your crypto. Meaning that, you can make a deposit -> Borrow a certain amount (lesser than the deposit of course) -> Deposit your borrowed amount as a collateralized asset -> Do it as often as you can.
Doing this with stablecoin will ensure you to avoid being liquidated, and generate a nice yield on stablecoins.
You can use Aave on Polygon Network to leverage your stablecoin. Doing this, you will be loosing a little bit on your stablecoin, but will be winning on the Matic earnings.
All of this was done with one USDC deposit I could then use to borrow USDC and so on and so one..
It was the first time I discoverd leverage yield farming. However, rewards are not that high, to my opinion.
That's why I switched to Kava, even if there are some cons.
I won't introduce you Kava Protocol. In a few words, it's a lend, borrow and trade decentralized exchange, working on his own blockchain, Kava network.
Without going too much into details (our goal here is to earn money with stablecoin yield farming, not to learn about crypto), there are 3 native tokens and Kava is the main one :
You will need Trustwallet installed on your mobile to use it.
You will be able to lend and borrow a buch of crypto asset on Kava. You will also be rewarded with a nice APY on both actions, in HARD. However, you have to keep in mind that you will have to wait 365 days once you've claimed your $HARD.
It can be annoying, but I prefer to see it as a delay gratification, or an income source to prepare the next year !
Now I will show you how to hypercompound your stablecoin without risk to earn $HARD :
This is my current situation without compounding on Kava. It means borrowed asset represent 58% of collateral, knowing that the limit to not reach is 60%. So I can't borrow crypto anymore if I don't make a deposit.
I've already some BUSD staked :
Now, I will deposit $10 worth of BUSD, and then compound it as much as I can.
As you can see, it came from :
- $8.2 to $23.2 supplied -> $15 more
- $66 to $73 borrowed -> $7 more
On which I will both get a $HARD reward
I'll have to wait for 365 days to get my rewards,
Stablecoin Yield farming - The Degen Way
I'll only introduce you to one of those strategies, but you can find tons of similar projects here. Be sure to DYOR to avoid scam projects.
On the Polygon Network, you can use PolyYeld.finance to increase your earnings. However, risks are high.
You can follow this strategy :
1. Staking USDC to get 45% APR on YELD token
2. Deposit your earned YELD to earn USDC (keep in mind rewards will vary)
I hope this little tour on how to use stablecoin to yield farm help you to define your crypto passive income strategy.
Keep in mind that you should prefer safer project, and don't be too greedy when you see such high APR, because there's always a risk of loosing all of your fund.
That's also why you should try to reinvest as much as you can your high risk earnings into your safest strategies.