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Inflows are up big across the board. TradFi is heavily long $BTC with CME Bitcoin Futures Open Interest higher than ever. The GBTC discount closing. Stablecoin supply continues to increase, and $COIN continues ripping- the most blatant proxy for crypto.
Crypto funds have attracted their largest weekly inflow in 2023, with Bitcoin fund inflows breaking through $1.5 billion year-to-date. Nine consecutive weeks of inflows at levels not seen since the last bull market in 2021, and everybody wants to get ahead of the Spot ETF approval.
Things are finally getting exciting again.
Welcome to the Rainforest Stack. A guide for the intrepid into the dynamic world of DeFi yield.
Constituted of four distinct layers: undergrowth, understory, canopy, and the emergent layer. Each layer boasts a different level of risk broadly categorized in line with the Lindy effect- the longer something has survived, the more likely its continued existence becomes.
An impact with oversized ramifications in the crypto space where hundreds of new protocols live and die each quarter.
More details about the Layers of the Rainforest stack are here.
Observations
stETH yield remains one of the most dependable yields throughout DeFi, and although the 3.6% is not particularly exciting, the composability is. Notably, the wide acceptance of wstETH as collateral on layer twos means that users can earn on their main stack while being more degenerate with loans.
The DAI savings rate will not last forever, and it is a high-interest rate phenomenon. Earning 5% on stablecoin is great, but it will not last. More pertinently, it is not clear why investors would want to be holding a large bag of stablecoin in the current conditions.
Notable Mentions
Pool: ETH-stETH on Curve Finance. APY: 2.06%. TVL: $215m. Chain: Ethereum
This pairing allows users to easily swap in and out of ETH and stETH positions. By pairing almost identical assets together, users sidestep impermanent loss.
Pool: stMATIC. APY: 4.32%. TVL: $110m. Chain: Ethereum
Staking and lending have been the largest winners throughout the bear market due to the appeal of single-sided rewards. No risk of impermanent loss, and a classic strategy to build a stack where the user has conviction.
Observations
MUXLP is still paying out decent APYs, and this perp aggregator is steadily clawing its way to the front of the sector. A protocol to watch headed into the bull market due to its ability to optimally route trades.
ThorChain remains an excellent yield spot, and the need for native swaps will not disappear. The savings product, in particular, allows for great yields on single-sided assets, and it remains one of the only places to earn a yield on $BTC.
Notable Mentions
Pool: JitoSOL on Jito. APY: 6.88%. TVL: $389m. Chain: Solana
Jito Labs is the leading staking as a service provider on Solana. Airdrop was announced this week, and the $JITO token is coming soon. Described as the lovechild of Flashbots and Lido, Jito is a sleeping tiger.
Pool: JitoSOL on MarginFi. APY: 0.01%. TVL: $62m. Chain: Solana
Airdrop season on Solana continues. Deposit JitoSOL or any other asset on MarginFi allows users to earn points. Degens Gambit: Deposit on MarginFi, borrow the cheapest LST, swap for JitoSOL on Jupiter (earn points), and deposit into a vault on Kamino Finance to earn yield or alternatively loop for increased exposure.
Observations
GMX V2 remains a bountiful source of yield for liquidity providers, and on top of trading fees, they also receive price appreciation from their LP tokens (50 native/ 50 stable).
TraderJoe’s AVAX pool is currently paying out three-digit APY on what many consider a blue chip layer one asset. Huge demand for AVAX follows the general sentiment that Avalanche has become the chosen chain for institutions due to its Subnet program. More broadly, the Liquidity Book model has introduced a new level of sophistication to liquidity provision. Bullish for skilled market participants and automated liquidity managers.
Notable Mentions
Pool: WINR-ETH on Camelot. APY: 205% TVL: $65,000 Chain: Arbitrum
Pool: KUJI-ETH on Camelot. APY: 126% TVL: $199,000 Chain: Arbitrum
STIP season is still going strong and Camelot- the front DEX of Arbitrum- is one of the best places to soak up easy yield. WINR is a liquidity layer for GambleFi, and KUJI is a layer 1 built on cosmos specializing in real yield for stakers.
Observations
Shitcoin season remains in full swing on Solana, and investors brave enough to provide liquidity can earn scandalous APYs. Please note that the trading shitcoins are the same as gambling, and any sell orders will cripple LPs given the pool size.
SHDW is the most interesting pairing on the list, and it offers decentralized storage- essentially the Arweave of Solana.
Notable Mentions
Pool: RNDR-USDC on Kamino Finance . APY: 502% TVL: $12,228. Chain: Solana
Pool: PYTH-SOL on Kamino Finance. APY: 4,889% TVL: $32,000. Chain: Solana
Render’s recent migration to Solana means liquidity opportunities for LPs, and with the AI narrative picking up steam, it is an attractive liquidity pairing.
Pyth Network is the dominant oracle provider on Solana and, again, a token with legs, making liquidity provision appealing. Providing liquidity via Kamino Finance also allows users to earn points which will have value in the future airdrop.
P.S.: would you like to explore the most interesting DeFi yield opportunities and airdrops in real-time?
Instead of manually reviewing dozens of web pages and searching for the best yields, you can use DeFi analytics & aggregator One Click Crypto.
One Click Crypto is the front page of DeFi yield where you can explore 20,000+ yield farming opportunities from 14+ networks, all in one place. It also has an embedded AI portfolio builder that can help craft a personalized strategy tailored individually for you.
Here’s an example of a portfolio on the Arbitrum chain generated by One Click Crypto:
Sign up for One Click Crypto today and gain access to 20,000+ yield farming opportunities on all blockchains — https://defi.oneclick.fi/
Disclaimer: This article, including insights on the “Rainforest Stack” and other DeFi strategies, is for informational purposes only and should not be considered as financial advice, investment recommendations, or an endorsement of any particular investment or strategy. The cryptocurrency and DeFi markets are highly volatile and unpredictable. Past performance is not indicative of future results. One Click Crypto makes no representations or warranties regarding the accuracy, completeness, or timeliness of the information provided. Readers should conduct their own research and consult with independent financial advisors before making any investment decisions. By using this information, you agree that One Click Crypto is not liable for any losses or damages arising from your investment choices.
We regularly prepare insightful reports and case studies about crypto trading and the blockchain industry.
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