DCA & Stake Crypto in Accumulation

By idiosyncratic | Idiosyncratic Crypto | 28 Oct 2023


I have started to accumulate the coins that have the potential to be one of the highest gainers in the bull market. Basically, these coins are purchased not just for their fundamental but also the potential to provide decent returns within 2 years.

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As a part of Dollar Cost Averaging, the investments in crypto are held in the wallets, either cold or hot wallets such as Metamask, and they can be used in several protocols if they have a utility in the blockchains. Now that DCA strategy is applied, I decided to level up my strategy with little, and relatively safe, movements.

Lending & Liquid Staking

When you check DefiLlama's Lending Page, you will realize the potential of safe returns via most popular projects like AAVE, Lido or Curve. Since these are both top projects and they have enough liquidity, the APR offers might not be as high as small-cap counterparties. So, we may choose to go with the safest return or a higher return with a higher risk.

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As a mild option, if you deposit your stablecoins on Radient platform on Arbitrum, you get around 5% APY for that. By using some special programs, which are boosted with L2 tokens such as ARB or OP, one can easily make gains from the initial deposit while holding the same token locked in a smart contract.

As you see in this example, ARB is rewarding the community by incentivising it with the governance token. This is a common strategy to keep the community dynamic and lock as much liquidity as possible in the harsh crypto conditions.

So, with a single move, you can make passive gains from your idle coins in your wallet.

My strategy for this DCA&Stake strategy is to find team incentives with base tokens to maximize the return.

Get the Reward when They Burn Money!

We talked about the case that projects burn money. For several reasons, mostly to survive in crypto and keep the investors on the chain, projects distribute their tokens though they know the fact that these coins will be dumped on the market.

When this is the case, we need to make use of the incentive and combine it with our strategy.

Similar to what we see on Radiant project, you can apply it on SUI, APTOS, SEI or any other new blockchains with community incentive treasury.

Here is a real example from my SUI investment in one of the Lending projects called NAVI.

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Under normal conditions, the supply APY for staking SUI was around 1.71% but Mysten Labs, the developer team of SUI, wants to reward the community members that stake their assets on SUI blockchain.

Basically, you get more than what you would get thanks to the incentives. In this example, more than 25% APR was provided and staking SUI becomes a rewarding strategy if you do not have any plans to trade it soon. Even if you want it, you can easily unlock your SUI and trade it as you wish. No lock-up period, no limits.

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If you want to play bigger, you can do it when there is an incentive to supply the stablecoins, too.

For instance, if I supply USDC, I'll get more than 19% thanks to the boost whereas the APY for borrow is as low as %4. With a little risk on stablecoin, I am getting a 15% positive return when the debt is extracted. Yet, as the APY is not stable, I may need to check it frequently even though the health factor will always be high because it is a stablecoin on both sides.

While volatility is extremely low and you have some liquid coins, you may look for nice DeFi projects that you can enjoy Lending or Liquid staking.

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idiosyncratic
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