Rainforest Stack #011 Best DeFi Yields (Jan 25, 2024)

Discover the latest in DeFi yields with Rainforest Stack. Uncover various strategies and opportunities in yield farming, presented in an easy-to-understand format for DeFi rookies and experienced farmers alike.

One Click Team
One Click Labs

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The Spot ETF Approval marked the local top, and Bitcoin has retraced a sizeable 20%. Overall metrics for ETFs remain excellent, with $BTC Spot ETFs attracting more volume than all other ETFs launched this year. Total net inflows stand at $1.06 billion, which is fantastic news despite the rampant dumping of GBTC shares. Anybody with questions about why the price is tanking should take it up with Barry Silbert.

The drawdown has reiterated the lesson on sizing and risk management. Altcoins are entering buy zones, and after moving nearly vertically for months, markets were overdue a 20/30% correction. As Barry continues to dump, can we bleed more? Yes. Is now a good time to start putting together a shopping list? Absolutely. Markets may not be kind enough to give sidelined capital another chance unless something breaks in TradFi.

The advice to de-risk in the run-up to/ day of the approval was solid retrospectively. The cumulative PnL of traders on Hyperliquid tells the entire story. DeFi still looks strong, and the restaking meta is entering its next stage.

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 here.

Emergent Layer — Enduring Yields

  1. Pool: stETH on Lido. APY: 3.2%. TVL: $20.89b. Chain: Ethereum
  2. Pool: DAI on Maker (DSR). APY: 5%. TVL: $1.41b. Chain: Ethereum
  3. Pool: rETH on Rocket Pool. APY: 3.08%. TVL: $2.47b. Chain: Ethereum
  4. Pool: frxETH on Frax. APY: 4%. TVL: $687m. Chain: Ethereum
  5. Pool: GMX on GMX V1. APY: 8.17%. TVL: $256m. Chain: Arbitrum
  6. Pool: GLP on GMX V1. APY: 11.93%. TVL: $157m. Chain: Arbitrum
  7. Pool: USDC-ETH (0.05%) on Uniswap V3. APY: 27%. TVL: $132m. Chain: Ethereum
  8. Pool: DAI-USDC-USDT on Curve Finance. APY: 1.41%. TVL: $198m. Chain: Ethereum
  9. Pool: USDT on Stargate. APY: 5.5%. TVL: $33m. Chain: Ethereum
  10. Pool: WBTC-ETH (0.3%) on Uniswap V3. APY: 6.79%. TVL: $213m. Chain: Ethereum

Observations

Volatility and liquidations mean payouts for counterparty liquidity providers on GMX. More broadly, anybody supplying liquidity on perp protocols has made out like a bandit in the last week.

Last week, we recommended picking an LRT, and EigenLayer stakers, amongst others, have been selected for the AltLayer airdrop. Base yield for LSTs is down across the board, and a desire to juice yields will increase appetite and demand for LRTs.

Notable Mentions

Pool: USDT on Iron Bank. APY: 32.96%. TVL: $155,000. Chain: Ethereum

Pool: DAI on Iron Bank. APY: 70.66%. TVL: $822,000. Chain: Ethereum

High stablecoin supply rates are here to stay, and anybody with spare stables sitting around on Ethereum can take advantage of great APYs on Iron Bank. Smaller pool sizes explain the excellent yield. An almost forgotten protocol that never truly recovered post-exploit.

Canopy Layer — Established Yields

  1. Pool: GLP on GMX. APY: 121.31%. TVL: $69m. Chain: Avalanche
  2. Pool: BNB on Venus. APY: 41.38%. TVL: $82.57m. Chain: BSC
  3. Pool: SOL-USD on GMX V2. APY: 43.53%. TVL: $19.6m. Chain: Arbitrum
  4. Pool: BNB-USD on GMX V2. APY: 237.53%. TVL: $404,000. Chain: Arbitrum
  5. Pool: CRV on FraxLend. APY: 31.7%. TVL: $29.91m. Chain: Ethereum
  6. Pool: ARB-USD on GMX V2. APY: 26.68%. TVL: $21.1m. Chain: Arbitrum
  7. Pool: ETH-ARB on Camelot. APY: 96.48%. TVL: $4.73m. Chain: Arbitrum
  8. Pool: ETH-WINR on Camelot. APY: 27.21%. TVL: $1.27m. Chain: Arbitrum
  9. Pool: yCRV on Yearn. APY: 32.39%. TVL: $17.26m. Chain: Ethereum
  10. Pool: SAVM-ETH (1%) on Uniswap V3. APY: 387.21%. TVL: $16.04m. Chain: Ethereum

Observations

GMX has launched a BNB market on Arbitrum, and the pool will receive 100,000 $ARB incentives until March. This is on top of the 2 million $ARB active across the platform to lower trading fees. The pool is still relatively small for GMX, and the early bird catches the yield.

SAVM-ETH yield going crazy as people rush into $SAVM positions. SatoshiVM is a layer 2 ZKRollup. It is EVM compatible and provides a bridge from the Bitcoin network into the EVM world. Uses native $BTC as gas and applications building adjacent/ on top of Bitcoin are catching a serious bid. A massive amount of untapped capital on the Bitcoin network makes any use case attractive.

Notable Mentions

Pool: INJ Staking on Keplr. APY: 15.81%. TVL: $1.6b. Chain: Injective

Overall, Injective staking is a great yield opportunity. A high yield with single-sided exposure on a strong altcoin. It does not get much better than this. Hydro airdrop incoming for all $INJ stakers with mainnet release on January 31st.

Pool: stETH on EigenLayer. APY: N/A. TVL: $436m. Chain: Ethereum

Restaking meta is heating up, and it is probably better to start earning restaking points sooner rather than later. Time is ticking, and the first protocol to launch an LRT on a layer 2 (similar to the $wstETH product) will see a ridiculous inflow of liquidity.

Understory Layer — More Unpredictable Yields

  1. Pool: SOL-WIF on Orca. APY: 461.74%. TVL: $4.9m. Chain: Solana
  2. Pool: SOL-WIF on Raydium. APY: 408.21%. TVL: $4.42m. Chain: Solana
  3. Pool: WTAO-ETH (1%) on Uniswap V3. APY: 405.72%. TVL: $3.01. Chain: Ethereum
  4. Pool: USDC-SUI (0.25%) on Cetus. APY: 349.16%. TVL: $7.64m. Chain: Sui
  5. Pool: ETH-ONDO (0.3%) on Uniswap V3. APY: 266.7%. TVL: $4.8m. Chain: Ethereum
  6. Pool: TRUMP-ETH on Uniswap V2. APY: 208.66%. TVL: $2.47m. Chain: Ethereum
  7. Pool: AVAX-USDC (0.2%) on TraderJoe. APY: 206.9%. TVL: $5.77m. Chain: Avalanche
  8. Pool: ETH-PENDLE on Uniswap V3. APY: 213.43%. TVL: $3m. Chain: Arbitrum
  9. Pool: TIA-OSMO (0.2%) on Osmosis. APY: 96.5%. TVL: $2.35m. Chain: Osmosis
  10. Pool: ETH-USDC APT Vault on Beefy. APY: 158.07%. TVL: $1.37m. Chain: Arbitrum

Observations

$WIF caught support at $0.20 and staged a comeback rally. The absolutely outrageous trading volume this token sees makes providing liquidity for it lucrative, whether that be on Orca or Raydium. The hat stays on, and LPs keep eating.

Ondo launched its token last week, and trading volume has been off the charts. Every time Fink goes on television and talks about ‘asset tokenization,’ the RWA narrative catches a bid, and $ONDO is the leading token in this landscape.

Notable Mentions

Pool: MAIA-USDC Vault on Beefy. APY: 262.06% TVL: $229,000 Chain: Metis

Metis will begin the second stage of community testing for its decentralized sequencer and will launch a large incentives program soon. This Vault farms on Hermes and sells the governance token to acquire more $MAIA (Metis governance token) and $USDC.

Pool: PRISMA-ETH Vault on Beefy. APY: 520.63% TVL: $486,000 Chain: Ethereum

This PRISMA-ETH vault has been featured in the Rainforest Stack several times, and the yield is still excellent. This strategy leverages Prisma’s farm and sells $PRISMA back into PRISMA-ETH.

Undergrowth Layer — Newest Players / Highest Risk

  1. Pool: POPCAT-SOL (1%) on Kamino. APY: 8,132%. TVL: $120,000. Chain: Solana
  2. Pool: WIF-SOL (1%) on Kamino. APY: 3,728%. TVL: $1.49m. Chain: Solana
  3. Pool: USEDCAR-SOL (1%) on Kamino. APY: 1,240.24%. TVL: $163,000. Chain: Solana
  4. Pool: MYRO-SOL (1%) on Kamino. APY: 877.86%. TVL: $468,000. Chain: Solana
  5. Pool: LEND-MNT Vault on Circuit. APY: 7,788%. TVL: $219,000. Chain: Mantle
  6. Pool: MOE-MNT Vault on Circuit. APY: 1,211%. TVL: $6,800. Chain: Mantle
  7. Pool: SOL-STAN on Orca. APY: 1,702%. TVL: $33,990. Chain: Solana
  8. Pool: SOL-WYNN on Orca. APY: 1,589%. TVL: $655,000. Chain: Solana
  9. Pool: ETH-MANTA on Aperture. APY: 865.29%. TVL: $114,000. Chain: Manta
  10. Pool: MGP-ETH (0.25%) on PancakeSwap. APY: 1,073.94%. TVL: $19,000. Chain: Arbitrum

Observations

Shitcoins on Solana have bounced strongly, and degenerate yields are back for LPs with the chops to play the game. Users are best providing liquidity in short bursts in pre-defined ranges. It cannot be stressed enough that because of the volatility and how aggressively these tokens move, impermanent loss will wreck almost any non-sophisticated LPer.

Magpie LP absolutely printing. Is the space finally waking up to the massive discrepancy between the MGP’s market cap and the protocol’s crazy fee generation?

Notable Mentions

Pool: DOJO on DojoSwap. APY: 148.33%. TVL: $4.1m. Chain: Injective

Pool: DOJO-INJ on DojoSwap. APY: 601.52%. TVL: $5.5m. Chain: Injective

DojoSwap is currently the leading DEX on Injective. Great single-sided rewards for $DOJO staking, and for every $1 of $DOJO (held in wallet or staked), users can participate $2 in any launches. The next launch is the 27th of January: Kage Finance- a telegram bot and web-based trading application. Launches on Injective look great; lots of capital and little to do. Ideal conditions explosive discovery rounds as bored capital rushes into speculate.

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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.

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