Hey folks, welcome to yet another article where I dive into some of the best places you can earn stablecoin yields, in this case $ERN, the native stablecoin to the Oath ecosytem and Ethos Reserve. If you’re unfamiliar with $ERN, in a nutshell it works similar to Liquity’s $LUSD (hence why it’s normally found slightly above the $1 peg), except with a some key differences, including:

· it can be turned into a liquid staked derivative $stERN
· it’s available on Ethereum L2s, namely Optimism, hence significantly offering lower gas fees

$ERN, like $LUSD, is an overcollateralized stablecoin that is minted or borrowed by putting up your $BTC, $ETH, or $OP. The borrower sets a collateral ratio that once breached, can trigger a partial liquidation. If you’re interested in learning more about how these mechanisms work I, I highly recommend that you check out Nick Drakon and Revolo Intel’s deep dive on Ethos Reserve and how $ERN is integrated in its ecosystem.

Anyways, on to the yields…

$USDC/$ERN Vault on Gammaswap: 25% APR

As you can see on the above graphic, this LP is very reward heavy, meaning that the yield isn’t necessarily organic, with only 1.34% APR in actual fees. Nonetheless, 25% is fantastic as long as the rewards are paying out — around 14.18% in $OATH and and 9.63% in $OP. $OATH and $OP are obviously alt-coins, but if you’re bullish on the $OATH ecosystem, then it might make sense to convert your $OATH into $bOATH and earn nearly 20% APR in Ethos Reserve’s staking pool, paid out in $ERN:

From what I can tell, there’s not a whole lot of secret sauce in this strategy — it utilizes concentrated liquitidy pools via Uniswap to extract it’s fees, and the rewards are just incentives that are paid out on top.

$CASH/$ERN on Retro Finance: 32.58% APR

If you’re unfamiliar with Retro Finance, essentially it’s a rebranded version of Satin Finance, which to put it politely, was a solidly fork that didn’t live up to their pre-launch hype which occurred earlier this year. Needless to say, their relaunch as Retro Finance was much more successful, as is their continued integration of $CASH, an overcollateralized index stablecoin mintable on Stabl.finance.

I’ve written about $CASH before, but essentially it’s an overcollateralized “index stablecoin” backed by other stablecoins. According to Stabl Labs, not only does your principle generate yield, but you gain even more APR if the “Capital Efficiency Index” (representative of the funds of you deposited including the funds being farmed out by the treasury) is high.

It’s important to note that the 32.58% APR is considered a floating average, which like other rates on this list, are subject to change. However given that this is a solidly fork, rewards are boosted based on how much $RETRO you have staked:

This means that if you want to maximize this strategy, you might have significant price exposure to $RETRO, which has shown some decent (yet volatile) price action over the past month:

USDC/ERN on Velodrome: 20.87% APR

I was a bit hesitant to add Velodrome’s strategy considering that this one has a significantly lower TVL ($16.9k at time of writing), but given that Velodrome is one of the mainstays of Optimsim, I figured it worthy to include. Adding liquidity on Velodrome gives you exposure to the $VELO token, which I’ve written in depth about before.

If you’re interested in a larger TVL Liquidity pool on Velodrome that still has exposure to $ERN, Velodrome’s $LUSD/$ERN pool with more than $532k in TVL still offers a pretty nice return of 12.77% APR:

$USD+/$stERN on Aerodrome: 27.32% APR

Speaking of Velodrome, Aerodrome Finance (Base’s version of Velodrome) has two lucrative LPs involving $ERN, the highest APR which includes $USD+ from Overnight.fi with an APR of 27.32% APR, and a second involving $stERN (as mentioned before staked $ERN) at 26.19% APR:

Both pools have more than $800 in TVL yet if I had to choose I’d opt for the one that doesn’t involve Overnight.fi’s $USD+ despite its slightly lower APR— I myself was a victim of an exploit earlier this year and users affected still have yet to be made whole.

Conclusion:

As with many stablecoin yields, I expect many of these rates to be pretty volatile and I can’t imagine that the ones especially in the +25% range to last very long especially if the TVL increases significantly. A great example are some of the yields that on Ramses that are currently advertise more than 200% APR but with only $6k in TVL — these yields are certainly not sustainable for long, especially if TVL reaches the $100k+ ranges.

If you’re interested in digging for more stablecoin opportunities, check out my recent article on Base, Ethereum’s hottest layer 2.

And as always, thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!

Disclaimer: And as a final reminder, this is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you. Cheers everyone!