Orca; Navigating the Shark Infested Waters of DeFi

By ChiefZ | Stock Blogz | 2 Apr 2022

The hot topic in crypto right now is that of Decentralized Finance (DeFi) and earning money passively through only a small initial investment. While many people think this is a scam or too good to be true, the fact is, that these accounts that allow you to earn this money passively are funded by those who use these applications to make trades. For example, if you have ever held a cryptocurrency like Ethereum and you wanted to instead hold USDC, you could make a swap on one of the most popular DeFi apps out there, Uniswap. When you make this swap, a small percentage of the fees that you pay go towards those who give coins (or provide liquidity) to Uniswap!


Swapping ETH for USDC on Uniswap

The cons of using an application like Uniswap is that you are making transactions on the Ethereum blockchain, where the fees can go as high as $20 for a single transaction. This can make it difficult to justify putting your hard-earned Ethereum into this “pool” of coins to earn much lower APR (Annual Percentage Rate) rewards. Another safe option on the Ethereum blockchain is to “stake” your coins allowing you to earn around 5% APR while minimizing your risk.

However, there is a better way. Orca is a DeFi application on the Solana blockchain meaning that the fees associated are just a fraction of a cent. The Solana blockchain also boasts a lightning-fast transaction time and up to 3000 transactions per second. This means that you can afford to withdraw your rewards every single day and reinvest them, therefore, compounding your rewards over the year. It also means that if you ever need to change pools or withdraw your tokens in the pool, it won't cost you all your rewards to do so!


Solana Gas Fees

Orca has a variety of pool options to stake your coins in return for annual rewards ranging from 18% for low volatility coins to 300% for high volatility coins. However, my favorite feature of Orca is the “Whirlpools” where you can stake your Solana and Orca tokens in return for (currently) 200% APR! This form of staking earns more than just regular pools because of the fact that you must choose a range within which your tokens will operate within. This increases your reward but also makes earning money over a long period of time without supervision riskier.


Orca Whirlpools

In my next article, I will be discussing strategies for using the Orca Whirlpools as well as going over some terminology and other tips and tricks.

As always you can contact me on Discord if you have any questions.

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