What is the best DeFi position?
This question can’t really be answered as there isn’t a “best” per say. Because these positions are all open to the public the “best” investment becomes an “average” investment once it becomes known and saturated with value.
The first 2 strategies are safer DeFi options as they require you to have your initial value placed into some different stablecoin. These stablecoins are then placed in different positions that are providing some use. Thus generating a interest return. The last strategy is a little more risky, and doesn’t utilize stablecoins as your value peg!
That being said, here are 3 different ways to distribute $10,000 of value into DeFi strategies as of 2021–03–12
NOTE: to maximize returns, I suggest waiting for the gas prices to be as low as possible while maneuvering value around the ecosystem. I’ve saved hundreds of dollars of txs by scheduling my value maneuvers around the cheap times (5:00am est). View gas price fluctuations here
Strategy 1
Alchemix (https://alchemix.fi)+ Harvest Finance(https://harvest.finance/)
- Transfer $10,000 to DAI
- Deposit $10,000 DAI into Alchemix (11.834% APY as of writing)
- Mint $5,000 alUSD
- Deposit $5000 alUSD into Transmute tab and wait for your alUSD to convert to DAI
- Withdraw $5000 DAI
- Head to https://harvest.finance/ into the “Stablecoins” tab and find DAI.
- Deposit $5000 DAI
What is happening here?
We are first depositing $10,000 into the Alchemix vault
Alchemix Vault
This $10,000 gets sent to the DAI vault @ https://yearn.finance/vaults earning ~12% APY
Upon doing so you are granted the ability to mint up to 50% your initial value input in alUSD (the native Alchemix stablecoin). This is done by going to the borrow tab. Once the alUSD is borrowed, you can head over to the transmute tab and stake your alUSD and wait for the transmuter to transmute your alUSD to DAI. This transmute functionality is unique to Alchemix and is discussed further here 👉 (https://alchemix.fi/transmuter).
What’s cool about this process is that the $5000 we borrow is being paid off constantly as the initial deposit is generating a ~12% return, being paid towards the payment of the loan. (around 3 years to fully repay debt). The benefit of doing this is we get instant access to $5000 that we can invest now and start earning a yield on. (Read more here)
Withdraw your DAI. From here you can head over to https://harvest.finance/ and deposit your DAI to earn ~23% APY
Or if you have some NFTs you want to show off, withdraw it and buy yourself an NFT Display frame!
Strategy 2
Alpha Homora v2 Curve 3pool leveraged yield farming position (https://homora-v2.alphafinance.io/farm/wgauge-0xfdb4f97953150e47c8606758c13e70b5a789a7ec-0-0)
- Transfer $10,000 to $3333 DAI, $3333 USDC, $3333 USDT
- Head over to the Alpha Homora v2 dashboard (https://homora-v2.alphafinance.io/)
- Supply max amount of DAI, USDC, USDT to Curve 3pool
- Borrow up to 9x leverage
- Confirm strategy
This positions is cool due to the types of fees generated from the positions.
Yield = 109.28% Yield Farming + 15.35% Trading Fee + 74.06% Alpha APY - 36.88% Borrow APY
Both the yield farming and trading fees are transferred to your original positions after you withdraw your position, and the Alpha APY is sent to your wallet within the site for you to claim.
The only way this position can be liquidated is if one of the stablecoins peg gets lost, and brings your debt ratio > 100%. If this is of concern to you, you could just leverage your position >9x. You can look at all the open positions here 👇
Some quick calculations we get…
$10,000 * 1.6181 = 16,181 APY
16,181 APY / 12 = ~$1,348 / month
Pretty good returns for a stablecoin investment!
Strategy 3
Badger DAO DIGG sett vault (read more on sett vaults here)
- Transfer $10,000 to DIGG
- Head over to the Sett Vaults page (https://app.badger.finance/)
- Deposit DIGG into Digg vault
What’s cool about this vault is that it utilizes Yearn ecosystem of vaults to maximize returns. What’s even cooler is that DIGG is pegged to BTC! So you get exposure to BTC price fluctuations while also generating ~138% APY on top!
There’s tons of different opportunities right now in DeFi. I hope this can provide some value to you. That’s all for now, goodluck with your DeFi investments!
Disclaimer: I am not sponsored by any of these platforms to write this. I found out this knowledge through rigorous googling and doc sifting. Do your own research as there are most likely even BETTER ideas/strategies out there and goodluck with your DeFi investments!
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