A Step-by-Step Guide to Yield Farming on Curve
Yield Farming is the current hot trend in crypto. It refers to the process of using your crypto on various Decentralized Finance (DeFi) protocols to generate high returns (sometimes north of 100% APY). Here is a great coindesk article that summarizes DeFi and yield farming.
Curve.fi is a decentralized exchange focused on stablecoins such as DAI, USDC, USDT, TUSD, BUSD and sUSD. While their UX is pretty rudimentary today, the Curve team recently launched the Curve DAO and the CRV governance token to reward liquidity providers for providing liquidity on curve pools. Thanks to this, Curve’s pools today (on paper) are netting the best returns in Defi right now.
This article is a step-by-step guide to yield farming on Curve.fi. Please read the disclaimers below:
DISCLAIMERS:
- Crypto projects discussed here are in early stages with potentially unaudited smart contracts. There is a good chance you will lose all your money.
- This information is purely educational and is not meant to be taken as investment advice or endorsement of any project. The strategies discussed are temporary at best and none of the outcomes are guaranteed. Please do your own research before making any decisions
Starting Wallet
Make sure you have your stablecoins in your Metamask wallet along with some ETH (for gas fees) before starting.
1. Go to Curve.fi
If you scroll down, you will see the different curve pools with their different yields for providing liquidity. As you can see, the sUSD pool is yielding 6.69% for the stablecoin deposits and a large number (113%) in CRV tokens
Lets head to the Curve sUSD pool : https://www.curve.fi/susdv2/
2. Connect your wallet and “Deposit” your coins
Go to Deposit → Connect your Metamask Wallet → Select the amount of coins you want to add.
In my case, I have $2518 USDC and $400 USDT which I will be adding to this pool. In return, curve says I will receive 2826 Curve susdv2 LP tokens reflecting my ownership share in the pool.
Click on Deposit
3. Approve Transactions
Metamask will popup a window asking you to allow curve.fi to spend your USDC and USDT (2 different transactions). Based on current gas fees, each of these transactions will cost~ $4.5
Click on Confirm
4. Add Liquidity to Curve
You will now see a metamask window asking you to allow curve.fi to run the add liquidity smart contract. My estimated gas fee to run the smart contract is $26.98 !
Click on Confirm !
Here is the actual transaction. As you can see, the actual gas fee was $13.28 (small consolation !) and I’ve received 2855 Curve sUSDv2 LP tokens into my Metamask wallet
5. Check your MetaMask wallet.
Most times, these LP tokens dont directly show up in the metamask wallet display. You will need to ‘add’ it as follows:
Go to Metamask → Add Token (at bottom) → Custom token → Paste the smart contract address in the Token address field.
In this case, I pasted “0xC25a3A3b969415c80451098fa907EC722572917F” which is the Curve CRVPlain3sUSD smart contract address. I had to edit the token symbol field (since Etherscan only allows 11 characters), and renamed the tokens to crv3sUSD
Click on “Next”, you should see the tokens in your wallet
6. Head to the Curve Guage to stake the Curve tokens
Now, if we stopped at step 5, we will earn a 6.89% APY yield (acc to the curve.fi data). In order to see the large returns, we need to stake our liquidity pool tokens.
Go to https://dao.curve.fi/
Connect your wallet, scroll down to the susdv2 liquidity guage and hit “Deposit & Stake”
7. Approve the transaction
Once again, you’ll need to approve the transactions (with crazy possible fees).
Hit confirm
Here is the transaction: You can see that the actual gas fees ($15.07) were thankfully less than the projected gas fees ($44.78) !
You have now staked your tokens !
10. Check the Curve Gauge
Go to https://dao.curve.fi/minter/gauges
Scroll down, you should see your gauge allocation.
Congratulations — you are now officially yield farming 😂
Needless to say, these rewards wont last forever since the returns are dependent disproportionately on the price of the CRV token. Keep checking this site to see your rewards (in CRV and SNX tokens) to claim them.
Note: I spent around $41.86 in Gas fees on the above transactions. If the 110% APY returns on CRV holds, I’ll recover this in 5–6 days !
Eventually, you will need to unwind these transactions (unstake, etc) to get your original stablecoins back.
Until then, Happy Yield Farming !
