Yield Farming 101

Time to harvest some crops!

I thought for this week we would jump right into what we’re all here for, farming. Our agenda is to open up our first position on Curve Ethereum, but gas fees are a real concern so we will also learn to use our first yield aggregator in Yearn. This will save time, money, and open a whole new world of protocols you can use in the future. But for now, let’s walk before we run, and get comfortable with DeFi.

Let’s begin.

Last time we discussed how to prepare for your farming adventure by getting some stablecoins into your wallet. If you missed it, here is the LINK. One thing I forgot to mention is you also need some Eth in your wallet, so get at least .2 Eth in there via your fiat onramp.

1. First things first, grab your Trezor/Ledger if you are doing this with a hardware wallet. Next you open your browser and go to www.Curve.fi. It will prompt you to connect your wallet and you will want to click on Metamask, then approve the connection.

2. Then we will click on Pools on the top banner and can select one of my personal favorite pools, the MIM USD pool from the list of those available, but feel free to use whichever you like.

3. Next we will click on Deposit, which will bring you to the following page.

4. If you used Coinbase to fund your wallet you likely have USDC, but you can deposit any of the listed stablecoins into this pool. If you are not using a yield aggregator select “Deposit and stake in gauge.” This means we will have to claim our own rewards and if desired, sell the rewards and add to our principal using the above steps.

5. To claim rewards, simply click on the MIM pool and then the Withdraw page, which will show your rewards in real time and allow you to harvest them. Rewards can be sold on Uniswap, Sushiswap, or my personal favorite Matcha, and then reinvested. You will also use this page to withdraw your funds when you are done farming.

*Important Note*

Gas fees on Eth can be INSANE. Unless you are farming with high 5+ figures, simply looking to stack CRV, or plan to use a yield aggregator, it is not worth farming on Curve Ethereum. The gas fees will destroy any semblance of profit. But we have options.

Congratulations, seriously.

You have now opened your first farm position. With this you are now part of a small, very early community of DeFi users and deserve a genuine congratulations. It is not easy to take that first step into something new, especially something as ground breaking as DeFi, but it’s a journey that will change you forever.

Optimizing your yield

What if you aren’t farming with 6 figures? Given the current state of gas fees you have 2 options: use a yield aggregator or farm on other blockchains. Today we will explore option 1 and dive into option 2 next week.

Yearn, for a fee, will take care of auto-compounding your rewards for you. They are the most trusted aggregator in the space so there is no better place to start.

To use Yearn, you will follow all the steps above, but in step 4 instead of selecting “deposit and stake in gauage” we will just select “Deposit.” This will put LP tokens in your wallet (basically your receipt) and we will then use these tokens on Yearn.

Once you have deposited into Curve, visit www.Yearn.Finance, go to vaults, and then find the MIM pool pictured below.

2. Connect your wallet to Yearn and select Metamask when prompted. Then you want to approve the staking of Curve Mim tokens.

3. After the transaction is approved, select the max amount of tokens, and then deposit into the pool.

That’s it!

Yearn will now harvest Curve rewards including CRV and SPELL tokens, sell them, and auto reinvest into your principal. To track your portfolio I cant recommend Zapper enough as it will show the appreciating value of your underlying pool tokens.

On the next episode…

That’s it for this edition everyone. I hope you found this entry into Defi helpful. It covers pretty much the 101 level of yield farming, but we all need to start somewhere and these are the safest, most straight forward protocols on the market. Next time we will look at using an EVM chain for farming where gas fees are lower, self auto-reinvestment is possible, and confirmations are lighting fast. To get there we will need to bridge assets, so we will also use our first bridge as well.

Until next time.