Osmosis is a decentralized exchange (DEx) established on the Cosmos network. It is a platform that offers excellent returns and which I described in my article:
---> My DeFi experience #2: Osmosis Zone on Cosmos
Returns are the main reason I'm interested in this platform. They are very high and mainly have 3 sources:
- Swap fees
- Pools (internal)
- External incentives
In short, to receive a gain on the capital that is deposited, it is necessary to give liquidity to a pool and block the LP-tokens that are received for a period between 1 and 14 days. Interest is paid in proportion to the chosen blocking period in the form of the $OSMO token. Here are some valuable and interesting tips to get the most out of this DEx, with yields approaching 250%.
Tip #1
When using the platform, the percentage of interest that can be read on the various pools does not reflect the actual total interest, but only includes internal incentives. However, as some pools receive external incentives in the form of other tokens and swap fees are received on the added liquidity, the actual total return will be higher than what you read on Osmosis. To get the most out of blocked liquidity, therefore, the advice is to use sites like Dexmos.app which analyzes the various APRs for us. By doing so, you can choose the most profitable pool at that time. From the Dexmos site it is possible to view which pools receive the highest overall interest and which is the best blocking period.
Tip #2
Use a strategy that makes the blocking period as flexible as possible. APRs change frequently in a DEx and it is therefore necessary to move liquidity from one pool to another. This is made inexpensive thanks to the fees to execute smart-contracts which are almost nil, but at the same time is hampered by the very long blocking period. Therefore, a simple strategy is to always have a portion of liquidity released, possibly in the form of a UST and deposited with Osmosis. Furthermore, the restricted liquidity must be divided into more or less equal parts between the blocking periods of 1, 7 and 14 days. By doing so, it is possible to release the capital fairly quickly and re-allocate it as you see fit.
Tip #3
Stake Osmo. There is little to do, Osmo, Atom and Juno are the 3 main tokens that in recent months have given the major airdrops to those who staked them. How to participate? Here is an interesting guide:
---> Airdrops - How to Participate (and get Free Money)
As if that were not enough, Osmo and Juno reward those who put them in staking with an APR between 80 and 100%. Therefore, with just over 10 Juno in staking, for example, you receive 1 per month in rewards and within a year you have the total return on the initial investment.
Tip #4
Use the "Farm & Dump" strategy if you don't want to hold $ OSMO. This is a simple operating method that involves selling the token received as a daily interest payment on the market. Given the very low exchange fees, it is also possible to do it every day. If you want to read more, here is an in-depth analysis:
Read Also:
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