Stephen the “Calculator” on OHM forks, ‘4,4’ and Leverage Farming
Multifarm chats to the “Calculator Guy” Stephen, and we learn about Ohm Forks, Tomb Forks and yield farming on Terra, Fantom, Cronos, and Popsicle Finance.
Q: Hi Stephen, great to have you with us. Could we start with your background? How did you get into DeFi and the rabbit hole that is yield farming?
Sure! I have three degrees: English, Philosophy, and Computer Science. I’m a teacher by trade, taught in a few different countries and at an international boarding school. I also used to teach teachers how to teach and tutors how to toot.
To be honest, DeFi found me. A friend recommended STRONGBlock and once I was in, I started using Telegram more. One day I was in the STRONG trading telegram and some anonymous user joined and just shilled the ever-living bajeesus out of OHM so a bunch of us aped in around $500 before it promptly crashed to $250. Felt bad, but as you know it ended much better than it started. After getting a taste for DeFi, I found out about farming from YouTubers like Taiki Maeda and the rest is history, I think.
Q: Your calculators for various OHM forks have been extremely useful for the DeFi community, thank you so much for that. What are your current strategies when it comes to Ohm Forks? How do you go about researching a rebase currency before investing?
I know it’s dangerous to give opinions, but I personally think OHM forks are telescoping, meaning we’re seeing more of them faster, they’re profitable for shorter periods, and they’re failing more quickly. I would be surprised if more than two forks survive the winter. That said, when looking for a good fork there’s a lot to consider. Is the chain already fork-saturated? Are the devs competent? Are there consistent updates? Are the updates meaningful? What is unique? Is that uniqueness meaningful? Carbon copies generally fail fastest, but if they have chain hegemony, they can survive in spite of that.
Q: Once you’ve found a 3,3 you think is a great project, what strategy do you take? Do you 3,3 (stake) or 4,4 (bond, sell then rebuy), or do you switch between both depending on what’s profitable?
Full disclosure, I’m not in any OHM forks at the moment, I’m rotating to other crypto ventures. Better to be off the ship early while everyone is still partying rather than try to get off when people are scrambling for lifeboats.
THAT SAID, there are ways to optimize your returns on OHM forks. I’ve built a calc for that, but under most circumstances, bonding is best. If you bond and then “claim to stake” prior to each rebase, you will maximize your share of the market cap relative to your investment. I like HEC’s (4, 4) because they give you staked OHM so you really don’t have to do any work to maximize your investment.
Q: What chains and protocols are most interesting for you at the current time?
I’ve been on a Fantom kick for awhile, but right now LUNA is seeing another come up, so I’ve moved some funds over there.. AVAX has been good and consistent. I’m hesitantly interested in CRONOS because I believe CDC has more weight in the space than people give them credit for. In terms of protocols, I like yield aggregators, I like lending for high APR on leverage yield farm platforms, I’ll even do leverage farming now and again. Still, small-cap gem hunting is the most fun and profitable, it’s just also the most risky and you can’t really bring people with you because by the time people hear your message, it’s too late, profits have been taken and it’s a scramble to the lifeboats.
Q: Strategy-wise, what percentage of your portfolio do you allocate to “safer” battle-tested protocols and/or stables, and what percentage to riskier, low-cap, newer protocols? Do you regularly take profits or do you hodl, borrow against assets, or…?
My strategy is a bit unorthodox. What I basically do is give large chunks of my investments or earnings to small charities where I can see the effects of the money or individual people who genuinely need it, and then karma pays me back double or triple. Sounds crazy, but it works. I’m bullish on good karma, I keep saying this and people think it’s just a slogan. I’m dead serious.
That said, if you have the time, the best tool anyone can have in this space is the right people around them. I found a bunch of really good people and they bring consistent alpha. We work together and we all have our niche. We generally go for smaller cap investments, try to be early, and we know that taking profits is the idea, not being long on anything in DeFi (except maybe a few coins or stable plays). I don’t think the “hodl” mentality is healthy in DeFi, because the vast majority of projects are going to fail miserably. You have to be dynamic. Borrowing is fine, but I don’t know if the market conditions are right for that at the moment. I’d rather just get yield on blue chips and stables or find low-cap gems.
Q: Where do you see the future of DeFi yield farming? Do you think the Olympus Pro model is here to stay?
This is an excellent question. I’m hoping more protocols like UNI offer optimized liquidity providing, which should help APRs to stay relatively high, as more and more people enter yield farming. Also, the more farmers we have, the better the liquidity is across markets, and I’m all for that.
I hope we get more decentralized arbitraging platforms, because if everyone could participate in arbitrage with just a few clicks, we’d require less slippage and prices across chains and platforms would be more consistent.
I HOPE that Olympus Pro’s model is here to stay, but there are a lot of other models that I’d like to see too. I want to see something like TOMB offer things like Tokemak reactors, or rented liquidity as a service. I think DeFi 2.0 has a lot of room for growth, and I’m interested to see what sort of protocol-synthesis we see in the future.
Q: Do you use things like leverage, borrowing, liquid staking etc? If so, how do you mitigate potential risks?
I’ll leverage farm now and again, but generally not for a long time. You mitigate risks by not having to go to work everyday. For most people, the best option is trying to get yields on stables or blue chips without liquidation risks.
Q: Bonus questions: Any hot alpha for us?
Who knows? I thought Tomb Fork Season was upon us, but these protocols are probably going to burn out FAST. So I’d recommend extreme caution. If you’re able, take time to find groups or people who have good batting averages. But also, find people who need help and help them, then spend that good karma on some gains for you and your family.