yEarn yVault for aLINK, an Aave liquidity token for LINK deposits

How to earn up to 52% APY on your LINK at yEarn Finance, through the use of Crypto Derivatives based on LINK

By Crypto OG | CryptoOGkauai | 29 Aug 2020


This guide was written by request for a couple of Redditors on the Ethereum Trader subreddit. I wrote a previous guide for fellow LINK marines to help them stack their LINK through CeFi, specifically at Nexo and at Crypto.com:

LINK stacking via CeFi

LINK stacking via CeFi - Part 2

The only thing that's changed about this guide is that Crypto.com now only offers 3% APY on LINK staked in 3 month increments on their app. Nexo is now more competitive rate wise at 5% when you're using Nexo to earn higher LINK rates, but that's offset by the fact that you have to hold a rather pedestrian performing crypto in NEXO token to get their best returns.

That guide covered the two most popular methods of using CeFi to stack your LINK today - not when Chainlink devs finally release production quality Chainlink nodes where we can stack our LINK directly through running these nodes. Waiting for this day is like waiting for the next iteration of Windows (Windows 11? Windows13?).

This process I'm outlining below can offer you higher interest rates on DeFi crypto derivates originally from Aave (but now only on Uniswap/Mooniswap) and at yEarn Finance, that offer LINK returns that are anywhere up to 10 to 17 times greater than found in CeFi alternatives at Crypto.com and at Nexo.

 

Pre-requisites

* A prior knowledge about cryptocurrencies and derivatives, in general, and how to move cryptocurrency around

* A knowledge about and willingness to participate in the latest DeFi solutions to automated yield farming which may or may not be running on what some may consider as late Beta stage software code.

* A willingness to take risks with some or all of your LINK stack to earn higher yield farming returns. Crypto is considered high risk. Derivatives are considered high risk. Ergo: Crypto Derivatives that are stacking Smart Contracts on top of each other are cutting edge and *very* high risk!

* An understanding that this advice doesn't come from a financial advisor, and that you **must** do your own research and Due Diligence.

* An understanding that this is cutting edge technology that has passed several audits but that unknown bugs or vulnerabilities could still cause major damage to funds invested in these solutions

* Ideally: access to a PC for some or all of these solutions.

 

For those that are unfamiliar with yEarn Finance, a good overview of the yEarn Finance ecosystem is this well-balanced review by an Institutional Investor / Partner at Pantera Capital, which is a respected Crypto VC Firm: https://veradiverdict.substack.com/p/bitcoin-of-defi

I use Firefox and Metamask (which currently isn't available for IOS but is available in Google Play), but you're free to use your own compatible wallet solution such as Wallet Connect, Argent, Atomic Wallet or other support solutions on your phone, if no PC if available. These instructions were written for use on a PC.

I recommend opening up separate browser tabs for the links in Steps 3 and above.

 

How to earn up to 52% APY on your LINK through the yEarn platform*

* These are extrapolated returns, based on recent actual returns. 52% APY for the entire year is not promised, as this rate will vary over time.

 

1. If necessary, install Firefox. Then, install Metamask in Firefox (or use your own compatible mobile or PC solution, as mentioned above) and configure it.

https://www.mozilla.org/en-US/firefox/new/

https://metamask.io/

Either create a new address, or you can search for instructions on linking your existing ERC-20 0x compatible address, which I won't go over here.

 

2. Deposit LINK into the Metamask ERC-20 wallet

This is the LINK stack that you intend to use for crypto derivatives at Aave and at yEarn Finance. Don't worry, if you don't mind the gas fees you can always reverse this procedure to get your LINK stack back (with profits) at any time, but the longer you leave it deposited, the greater the gains.

 

3. Deposit enough ETH into this same Metamask (or compatible) wallet for ETH gas fees to implement this strategy

I recommend depositing at least $30 or $40 worth of ETH into this wallet. You can go to ETH Gas Station to check current rates. If the fees are ridiculously high, unfortunately you'll have to wait for fees to come down unless you're moving around 4 figures worth of crypto and don't care about the negative ROI impacts.

https://ethgasstation.info/

 

4. Connect your Metamask wallet to the following websites, and authorize their access to this wallet:

https://yearn.finance/

https://zapper.fi/dashboard

https://yieldfarming.info/yearn/yvault/

*** A word of warning. Please, please, please make sure that you're sending crypto ONLY to the first three (3) sites listed above, and not a misspelled website that may be spoofing one of these sites above that are trying to fool the unwary. ***

The latter two sites can be used to track your yEarn returns.

Two methods are available to turn your LINK into yaLINK. I'm going to show you both methods, with the easiest method being shown first. I'll show the older, legacy method of doing this in case users run into issues with Zapper.fi, and also because it explains step-by-step the processes that are going on  behind the scenes when you use Zapper.fi.

 

5A. RECOMMENDED SHORTCUT METHOD - Zapper.fi

Zapper.fi is a natively supported solution to turn your LINK, ETH, USDC, or DAI into yaLINK in just one step:

https://zapper.fi/invest

In the Invest tab, type in yaLINK under "Explore Opportunities" and choose the yaLINK Vault. Then pick one of the four currencies listed above to convert that to yaLINK. Going this route is actually faster, and may be cheaper than doing it the manual Mooniswap/Uniswap method via 1inchexchange. Going the zapper.fi route, you can start with ETH, DAI, USDC, or LINK and it'll handle the conversion for you.

That's it! You're done!

 

5B. LEGACY MANUAL METHOD - Also gives a better description of the process to get to owning yaLINK

I. Connect your Metamask wallet to 1inchexchange:

https://1inch.exchange/#/

II. Input LINK as your deposit, and aLINK as your new coin that you're going to convert it to from your LINK. Pick the DEX that offers the lowest gas fee rates.

You're probably going to have to also connect your Metamask wallet to Uniswap and Mooniswap too, if you intend to pick up aLINK in this manner. Aave no longer offers aLINK:

https://app.uniswap.org/#/swap

https://mooniswap.exchange/#/swap

III. aLINK is an Aave crypto derivative of your LINK, a liquidity token that represents providing liquidity in the original crypto asset, which can then be deposited at yEarn for high interest rates.

IV. Go to yEarn Finance's aLINK Vault and deposit aLINK to earn yaLINK

https://yearn.finance/vaults

yaLINK is also a liquidity token that is your *second* crypto derivative of your original LINK. yaLINK represents providing liquidity. As these derivatives are always more valuable than the base asset, don't be alarmed if you aLINK or yaLINK amounts are less than your original LINK amounts.

It should look like this:

https://imgur.com/a/k7U0uFl

You did it the longer, manual method but now you're done!

Either way, you now own aLINK and yaLINK, that can be converted back into LINK gains whenever you want, provided that you pay gas fees. Congrats! Thanks to the magic of the yEarn ecosystem, and DeFi you're now earning 10-17x over CeFi yield farming alternatives.

I hope you enjoyed my first Publish0x guide, and I hope that this was helpful to fellow LINK marines and YFI investors.

 

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Crypto OG
Crypto OG

Involved with Crypto off and on since 2013.


CryptoOGkauai
CryptoOGkauai

Tips and discussion from a crypto veteran regarding cryptocurrency, DeFi, CeFi, and helping to maximize returns for fellow investors is my focus. I'm a risk taking crypto investor who regularly invests in high risk/high reward scenarios. I'm willing to report back on my findings in order to hopefully help others.

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