Today, I wanted to share insights from a personal challenge I’ve been exploring: finding profitable yet balanced strategies in decentralized finance (DeFi) on Solana. Despite its potential, I feel DeFi on Solana remains underutilized.

One hidden gem I’ve found is Orca, a protocol that offers intriguing opportunities beyond the more popular Raydium. For instance, the whETH-SOL liquidity pool provides a daily yield of around 0.27%, which translates to roughly 90% annual returns.

To keep it simple, whETH is the ETH bridged from Ethereum via Wormhole bridge (portalbridge.com). However, the bridging fees from Ethereum are quite high...

Here’s a more cost-effective approach to get started (which only costs a few cents of gas fees totally):

• Instead of bridging ETH from Ethereum directly, send USDC from an exchange like Binance to your Solana wallet (e.g., Phantom or Backpack).
• Use a decentralized exchange like Jupiter to swap USDC for whETH, while you can transfer SOL directly from Binance to your wallet like for USDC.
• Provide whETH+SOL liquidity on Orca, keeping in mind that whETH and SOL prices tend to move together, reducing impermanent loss compared to other pairs like SOL-USDC.

While the potential rewards are exciting, it’s essential to acknowledge the risks, including crypto market volatility, smart contract vulnerabilities, and blockchain-specific challenges. To manage these risks, you could consider hedging strategies or investing only what you can afford to lose.

I dive deeper into the process, tools, and strategies in my video. If you’re interested in how to profit on Solana while keeping risks in check, watch the video below for all the details!