So now that we’re one month into governance 10 on Algorand, recall that in my previous piece, I had indicated that I place a small percentage of my holdings into Folks Finance $xALGO program through both $BNB and $AVAX blockchains. For the purposes of this opinion piece, I will be focusing on the $AVAX experience.

First, let me just say that the Mint and Burn process on #FolksFinance was seamless. It was fast, easy and you can access the functions from everywhere. The $xALGO minted was immediately available in your connected wallet that supports $AVAX. I personally started this process using Core, but soon after, I switched to OKX. $xALGO maintains a higher price than regular $ALGO and $gALGO.

Second, in order to test out the environment $xALGO can open doors to, the best way is to do so through TraderJoe. For some reason however, TraderJoe is not responsive through Brave Browser, but if you have the OKX wallet app, you can easily use the same functions through their “defi” tab, or the “discover” tab. Simply go to TraderJoe’s website through those tabs, connect your OKX wallet and begin playing with the environment.

Personally, I started playing around with the $xALGO-$AVAX liquidity pools, trying to figure out what is the best way to generate the most passive income. Here’s what I learned:

Being still relatively a new user in liquidity pools, I was not completely sure how the pools worked on TraderJoe. In the $ALGO environment, whether if it’s through tinyman or pactfi, as indicated on the #FolksFinance “deposit” tab, you can farm your LP and usually get between 4% and 12% APY, depending on the platform and the LP. The farmed APY can be claimed through the platform pages and they get deposited into your wallet. However, seems like TraderJoe is different. You don’t have to put equal amounts of the assets in order to participate in LP pools and the rewards are deposited automatically into your wallet on a daily basis. But what I am still trying to figure out are the types of LP (they give you three options) and how liquidation works. I realized that if you add LP with 90% $xALGO and 10% $AVAX, seems like when the $AVAX is all but gone, due to how LPs work, you are “kicked” out of your position and you stop gaining rewards, even though you now have 100% of your LP position in $xALGO. This means that you actually have to be smart about your LP placements and put in a relatively equal amount of both assets.

Although, I can’t complain about that. It takes a few seconds to replace the assets on $AVAX due to its speed and efficiency. Additionally, the LP APY right now for the pools on TraderJoe are 80%+ APY, sometimes even 100%+. If you place enough into the platform, just the interest gained on a daily basis may help you make back the fees needed to reintegrate into the LP.

With all that said, I will continue exploring the pools and functions in order to learn more and report back.

Once governance ends and I’m able to mint $ALGO from $xALGO, I’ll report again.

Cheers everyone!

#FolksFinance $ALGO $AVAX