DeFiLlama, the decentralized finance (DeFi) data platform, has launched a new product to help token farmers find better yield growing opportunities.
On October 23, DeFiLlama announced a product it’s been working on for months — Delta Neutral Yields.
The system uses the platform’s large database to look for opportunities where users can borrow tokens to farm with. With the new system, returns of over 20% should be achievable with BTC, ETH and USDC.
DeFiLlama offers the strategy finder for free on its website. However, the caveat is that many of the proposed tokens have low liquidity and potential associated risks.
Today we are launching a product that has been in the works for months: Delta Neutral Yields
It uses our huge DB to find ways where you can borrow a token and then farm with it
With it you can exchange >20% APY on BTC, ETH, USDC…
Thread how to get these APY+ examples
— DefiLlama.com (@DefiLlama) October 22, 2022
Leverage and Arbitrage
DeFiLlama offered some examples of how his new strategy finder works. One of these was leveraged farming with avalanche staking, depositing BTC.b (BTC bridged with avalanche) on Aave to borrow AVAX, which is used to produce sAVAX. This is repaid to Aave to borrow even more and leverage the position, earning up to 22% APY.
Another suggested strategy was arbitrage against a yield generator. Users can deliver Ethereum to borrow DAI and then deposit to Reaper Farm for around 16% returns.
DeFiLlama said there are thousands of similar strategies that allow users to maintain exposure to the original assets while earning higher returns provided by other tokens. However, these are not farms that are “set and forgotten.” It added:
“They all require active management to ensure your loan’s health rate stays afloat, the final APY of your position is good.”
The platform also has a project filter for those who don’t want to be exposed to the DeFi protocols they find dubious.
The DeFi data portal has expanded its offering this year with new datasets and tools for token farmers.
Outlook on the DeFi ecosystem
The DeFi ecosystem has taken a hit along with the broader crypto market decline in 2022. Declining total locked value is a direct result of falling asset prices and users withdrawing collateral to sell it.
TVL is down 71% from its peak of over $210 billion in late December 2021. It’s currently around $61 billion, including the stake.
The ecosystem has mirrored the crypto market cap with low volatility and sideways momentum over the past four months. DeFi protocols are unlikely to see collateral increases until markets recover. MakerDAO is currently the industry leader with $7.7 billion TVL and a 12.7% market share.
Disclaimer
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