Avoiding Market Fluctuations with Stablecoin Yield Farming

Avoiding Market Fluctuations with Stablecoin Yield Farming


I think anyone can agree right now - the Crypto Market is currently in a state of extreme volatility and even by Crypto standards. With volatility comes both incredible opportunities for profit and incredible opportunities to have a massive blow out. One of the easiest ways to avoid volatility and day to day market fluctuations is to invest in stablecoins. However there's just one issue with stablecoins, they don't increase in value. Stablecoins are just that, stable. Generally pegged to the value of a US Dollar there's not too much room for value fluctuation (depending on how they peg the value, see AMPL). Typical options here are to send your stablecoins to a centralized lending application like Celsius or BlockFi for paltry returns varying between 8.6-12% or to a DeFi application like Venus Protocol or Aave and earn between 3%-13.85%. But as I stated above these returns tend to leave something to be desired.

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Enter Nerve Finance. Nerve is the first StableSwap AMM on Binance Smart Chain that allows trading of stablecoins and pegged synthetic assets. Nerve was launched March 1st of 2021, during the epic bull run that took place the first quarter of 2021. Their first pool consisted of 3 stablecoins: BUSD, USDT and USDC and have since added UST, anyETH and anyBTC pools. Since their launch 3 months ago they have already achieved $432M TVL and over $3.85B of trading volume. Returns for providing Liquidity on Nerve are much more impressive than typical lending platforms. APY varies from 35.36%-54% for provision of stablecoins. 

Not Another PancakeSwap Clone 

Due to the rise in popularity of PancakeSwap and DeFi on BSC as a whole there's been a ridiculous amount of PancakeSwap clones that have hit the market over the last couple of months. Most of the clones offer little to no additional features/benefits over PancakeSwap save a reskin.

Nerve does not fall into this category. Nerve was built specifically for the swapping of stablecoins and pegged assets. In addition to swapping they also operate the largest trustless bridge on BSC, capable of swapping up to $30M in ETH/BTC or $5M in USDT into or out of BSC. Trading fees on Nerve are relatively low, only 0.04%, and slippage tends to be minimal. 

Like most AMMs out there they have a governance token in NRV. Rewards are paid out in NRV for providing liquidity for the stablecoin pool or providing ETH/BTCB for the bridge. The NRV token can be used like many other governance tokens, to vote on community proposals and can be collateralized to secure a non-liquidatable stablecoin loan via Ruler Protocol

NRV hit an all time high of $6.65 on 3 May 2021. Personally I think it has a lot of room for growth, especially once the bull market kicks back in. NRV has a few more use cases than the average governance token and need is certainly there for a stablecoin swap/BSC bridge so it should only be a matter of market conditions for it to take off once again. 

Last two things to note about Nerve is they did complete their audit and their transparency is quite good. Their roadmap, team and second-by-second transactions are all easily accessible on their site. These are all things that personally help to set me at ease when looking into something I may put my money into. The roadmap lists out creating an EVM compatible sidechain as well as expansion to Solana, two things that I absolutely love. I can't say it enough but interoperability is huge right now, as is connecting to Solana. 

Final Thoughts

Usually the hallmark of yield farming with stablecoins is shit returns. Which makes sense as it is the "safest" way to earn in DeFi. The trade off here with Nerve is you get significantly higher returns by staking your stablecoins, but you only earn those returns in NRV. Which isn't necessarily a bad thing if you plan to sell it off or believe in and want to participate in the governance of Nerve. However if you're skeptical of the whole thing or are looking to earn in kind rewards it may not be for you.

For me personally I always have a portion of my portfolio in stablecoins so getting to put these to work with Nerve (and diversify out of centralized platforms like Celsius/Hodlnaut/Nexo/etc) is a nice benefit. Because it's on BSC I don't have to pay an arm and a leg to move them around when need be. But it's obviously up to you what you do, I found Nerve the other day and wanted to share it what you all since after looking into it it seemed to be a solid project! Hopefully though you make your own decisions and do your own research here to determine if it's a good fit for you. Either way I hope you enjoyed reading. 

If you liked it don't forget to follow and like the post so I know to keep making content. If not I'd love to hear why. Thanks!


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Ledger Wallet - Get a $25 voucher and Crypto Beginner Guide when you purchase through this link. Best wallet for long term storage. 

DeltaBadger - Simple to use Crypto DCA Bot, 10% off through this link. Great for long-term investing.

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