➡️ An extension of my first article about making money in crypto post 2024. There are some important ideas I definitely want to go over. LFG

Popular Sophisticato Money Making Strategies

Let's go over some of the stuff you can do to make money without having to rely on uponly macros and blind luck.

Synthetic Yield Capture

A "synthetic" position usually refers to a multilayered position that mimics a simpler position. Synthetic positions can be useful to build your portfolio in dodgy macro environments. One of my favorite plays is synthetic yield capture. It's good stuff because it gives you the potential for big gains in low-liq memecoins without taking on the risk of fiat capital loss.

The synthetic position relies on the memecoin having a big yield associated with it. Maybe the token just came out and the backing project is offering a juicy staking APR. Maybe there's a nice yield farm on Aerodrome. Either way, the normal way to capture that yield is actually holding the token, which can be disastrous in most cases. After the initial pump, most projects offer some yield to get people to HODL. They almost never do. So you're getting a juicy APR in terms of the token, but you're still losing in fiat value.

Fix this by holding a synthetic stable fiat position represented by the token. Purchase a short equal to the long/spot position you hold. That way, your fiat value is not affected by any movement of the token price, but you are still capturing yield.

Smaller memecoins may not have the ability to be shorted because they have not been integrated into a protocol that does this. That's ok. Here you may take advantage of crypto's reflexive nature — if one Trump coin goes down, they're probably all going down. Take your short by purchasing a Trump coin that can be shorted in place of the one you have. (There is additional risk here, as the two coins may not move up and down in perfect tandem.)

Your profit is the yield you get from the long minus the fees you pay for holding the short. Make sure your profits aren't eaten by these fees if the token starts to tank — remember your yield profit is denominated in the token until you sell into stables, and fees are always denominated in USD!

No Liquidation Protection Shorts

A great way to take your hedge in the trade above is to short using non-IL leverage tokens. Popularized by Binance, these tokens allow you to take a -2X or -3X position without the risk of liquidation. Using them means you spend less money on the synthetic position, which frees up your capital to do something else.

Memecoin-Stablecoin Farms

A great way to short midtier projects and wait out slow periods is in yield farms where one of the tokens is a stablecoin. These pairs hold fiat value more steadily than dual memecoin farms or even memecoin-bluechip farms. Half stablecoin farms also pay a higher APR to compensate for the economic opportunity you lose if the memecoin skyrockets. (You won't let this happen though, will you? Because you'll be watching the news, and you'll get out of the farm back into spot holdings ahead of the pump, right? Right.)

Yield farms are quite capricious these days, as "V3" farms proliferate and take potential yield away from LPers while requiring more time to manage. Automated managers like Gamma take fees when they have to move your position, and this can eat heavily into profits. Not recommended. In fact, V3 positions in general are not recommended. Stick to V2 positions that provide the same APR for the entire range like the "Volatile" labeled position on Aerodrome.

Farm Bluechips

One of my favorite ways to make money on all these new fly by night chains is to take advantage of the V2 bluechip farms while they give away top APR.

New chains like Linea and Scroll can't immediately integrate the V3 stuff, so they revert back to V2 positions on their main liquidity hubs in the early months. Cross chain platforms like iZUMi are perfect examples of this — in fact, iZUMi seems to be the V2 stand in for every goofy chain that can't bootstrap its own defi infrastructure. And iZUMi is still V2.

New chains need bluechips, especially ETH. To attract the liquidity, they offer high APRs on ETH-USDC, WBTC-USDC and similar liquidity pairs. "High" these days means around 50-70%. Make sure it's APR, not APY, but on new chains, it's usually APR.

These Are Time Consuming, Difficult, Confusing Trades!

I don't disagree. In order to properly invoke the strategies above, you'll need to use swaps, farms, bridges, perp DEXes. You have to first find all of those frontends. You'll need multiple windows open on your browser. You'll have to verify each step in the process to ensure you're not on a false frontend. And oh, the clicking. You'll be clicking and clicking and clicking.

This cannot be the final stage of defi if we expect it to grow. And fortunately, we already see platforms moving to aggregate these steps into single step, single UI processes. On Monad, the leading project doing this is Hedgemony. Imagine being able to one-click any of the trades above and have it execute just as fast as a simple swap does today. This is the kind of functionality defi needs, and it's the type of functionality that's coming soon.

Stay tuned to this space... I'll be coming with more tips and tricks! Actually, scratch that. The "tips and tricks" era of crypto is over. It's time for real strategies and sophistication. And you'll find that here while all of the influencoors take everyone else's money with memecoin traps and "be early" scams.

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