“Farm or Be Farmed” — Degenomics on ‘Pool 2’ Yield Farming and Surviving Crypto
Multifarm’s ‘Yield Farmer Interview’ series continues with Degenomics, who leaks some current DeFi and NFT strategies.
Q: Hi Degenomics, thanks for joining us! Could we start with your background? How did you get into DeFi and yield farming?
DG: Thanks for having me! I am a retail trader who happened to hear about yield farming YFI back during DeFi summer of 2020. After learning more about DeFi and yield farming, I got hooked and started learning about all the new protocols, the new financial primitives, and about how to earn three-to-five digit APY.
Q: Are you currently providing any assets for liquidity pools? Which chains?
DG: Currently, I am not since there are better opportunities elsewhere in the market such as NFTs or holding ETH outright which is outperforming DeFi (more on this later). However, I do have some stables in Convex Finance on Ethereum that I’ve locked up perpetually. The yields have been outperforming my expectations thus far.
I mainly focus on Ethereum, but I do enjoy Polygon or Fantom once in a while, however, the slippage is too high for me to trade on other chains, so I always find myself coming back to Ethereum.
Q: How about NFT farming, have you tried that?
DG: I do know there are protocols like Unicly, NFTX, and others where one can deposit an NFT, receive back tokens, provide ETH liquidity, and earn triple digit APY. It is looks like a solid play to long both the asset, gain ETH, and on top of that earn yield. But I haven’t done this so far. It is simpler for me just to own an NFT outright (I only need to buy and sell).
Q: Do you prefer Pool 1 or Pool 2 farming strategies? And how much of your capital do you allocate into “risky” DeFi areas (for example newer yield farms / NFTs) ?
DG: It depends on general market conditions. I generally avoid pool 2 strategies as much as possible unless I believe both pairs are going up or will go up. I farm using stables if I have stables at the time (meaning market is flat or down) and if I believe in the safety of the protocol.
The number one rule for me is safety and survival. I don’t use a percentage of capital per se, but I do not go all in, since there is always a chance of a rug or exploit. If the contracts are solid, the name is famous, the TVL is large, then to me they are safer, but not completely risk-free. I am thankful to have never been rugged before and I hope to keep it that way.
Q: How do you find new farms? Any current ”alpha-advice” for our readers? (if applicable)
DG: I use a combination of Multifarm, Vfat, and Twitter.
My alpha advice is to simply survive. If you can survive in crypto, you will make it. The moment you are liquidated or rugged, it will be extremely difficult to get back in. There are protocols out there that sound too good to be true or sounds revolutionary. And they might be exactly that- they could simply take your money.
Yield farming seems very PvE (player vs. enemy), but it’s very competitive- farm or be farmed. You need to know which one you are at that time. Usually for pool 2s, that means you are the one being farmed.
Q: Where do you see the DeFi space in the short and medium-term heading? Since there is so much attention on NFTs and play-to-earn ?
I do not know where NFTs will take us, to be honest, since it feels extremely frothy, yet there are signs of actual adoption. There are plenty that have turned 4–5 digits into a solid 7 digits within a month. This is not normal, but crypto isn’t really a normal asset class anyway. Focus on quality, be careful of where you put your ETH, and most importantly: just have fun, be safe, and wagmi.
In the short and medium term, DeFi will probably continue to struggle.
Rather than looking at price of tokens in USD, which seems like it’s going up, you really need to look at DeFi tokens paired with ETH. The ultimate goal is to extract as much profit as possible, so you need to outperform ETH in bull markets (and make sure ETH is outperforming BTC), and you need to hoard USD in bear markets.
If you look at most DeFi/ETH pairs (such as DPI/ETH, which is an index of DeFi tokens), you will notice they’re at their all-time lows, meaning you would be much better holding ETH than the DeFi token itself. Almost all DeFi majors that I track are down big vs. ETH (or at all-time lows) and I don’t see this changing anytime soon. I am still bullish on DeFi in the long run though and believe it is the future.
Degenomics is on twitter as @degenomix
_________________________
Liked this interview? Join Multifarm’s community for more alpha:
Website: app.multifarm.fi
Community Discord Channel
