I will show you how Invest in Dot - vDOT pairs in Arthswap to earn 32% APR. Given DOT is a large cap token and expected to appreciate in value, this is great time to let your DOT bag grow.
What is vDOT?
vDOT (voucher DOT) is a liquid staking token of DOT, with fully underlying DOT reserve and yield-bearing feature of DOT staking reward
Get DOT on Bifrost
Before minting and using vDOT you first need to hold DOT in the Bifrost network.
Prepare DOT on your wallet address on the relay chain:
- Purchase DOT on CEX or DEX
- Buy DOT with credit card with fiat on-ramp solutions (i.e Banxa)
- Withdraw from other ecosystem parachains (HydraDX, Moonbeam, Astar, Interlay...)
Stake DOT to on Bifrost or omni.ls to get vDOT or voucher DOT.
What is Bifrost?
Bifrost is a polkdot native app that lets you cross chain transfer of non native Ethereum Virtual Machine compatible tokens into EVM compatible tokens. It lets you mint liquid staked tokens (vTokens) on any chain. In my case, If I have DOT in polkdot chain compatible wallets like Subwallet, Talisman, Enkrpt, or Polkadot.js, you can convert to EVM compatible Metamask or Wallet Connect wallets.
Convert DOT in EVM to vDOT via Arthswap
I had few DOT token on EVM Compatible Astar Network I needed to convert to vDOT. I could have used vDOT to stake it for 30 days and claim in back. I took the quick route by swaping DOT to vDOT using Arthswap. It is lot faster without the wait. Make sure you swap small chunks like 20 DOT tokens at a time to reduce slippage. I will only tollerate less than 1% Price slippage. Take you time and swap few wait few hours when slippage is reduced by Arbitrage BOTs.
Generate DOT and vDOT Liquidity Provider Tokens
Go to app.Arthswap.org. Click on farm. You will see Dual Farming DOT/vDOT-LP with 32% APR rewards. There are other Farms like DOT/ASTR-LP at 18% that looks intesting. I am not interesting in any farm less than 10% APR. I also would not invest on token that are not top tier tokens like DOT, WBTC, WETH. In there I am only interested in DOT/vDOT-LP farming pool.
Liquidity provider rewards
Liquidity providers earn a 0.25% fee on all trades proportional to their share of the pool. Fees are added to the pool, accrue in real time and can be claimed by withdrawing your liquidity.
Rewards Breakdown
The 32% APR is broken down as 3% APR for swap fees. The estimates shown on Arthswap is estimates for ARSW and BNC tokens you earn per month if you maintain your current liquidity. You will earn extra farming rewards of 29% APR. This farming reward is 33.72 BNC for $1000 investment. Each BNC or Bifrost token is worth $0.63 as of shooting this video.
Click on drop down arrow next to DOT/vDOT-LP farming pool. Then, click on Get DOT/vDOT-LP. This will take you to Add Liquidity with DOT and vDOT selected as token 50% pools with equal USD value in both assets. These are V2 pools. I select Max vDOT I have and corresponding DOT tokens. Click add tokens. Pay gas with ASTR tokens. Make sure to select the lowest gas fees on Metamask and approve it. I was paying few cents to approve one time token deposit. Then I approve deposit both tokens. At the end of approval, you will have DOT/vDOT-LP. You are not done yet because, you just created liquidity provider tokens without farming it.
Farming DOT/vDOT-LP on ArthSwap for Farming rewards
After you got your DOT/vDOT LP tokens from Arthorswap, you need to deposit those tokens on farming pools or you will not receive Farming rewards at 29% APR. Without depositing, I cannot stress you will not receive bulk of rewards APR.
In conclusion
In term of risks, vDOT provided from Omni LS is riskly because it is new liquidity staking platform without proven security and trust. They could always do a rug pull on you. It is tempting if vDOT does not lose in value over time and getting 32% APR for DOT to farm it and get rewards in this bull cycle.
If you like this article please hit the tip button it does not cost you anything!
