More than 250 ETH minted into Harmony in less than a week with 239.43 ETH locked into Viperswap. Again this isn’t a shill for viperswap. But think of the significance of this. 239 ETH entered into Harmony platform within less than a week JUST to chase APR yields. Don’t get me wrong, I love the APR yields and I added quite a significant amount and earned myself some nice yield farming… BUT so what? What if some yield farmers throw in their ETH into Harmony? Well that’s 239.43 ETH that had to be paired off with ONE tokens. How many ONE tokens were purchased in order to pair off with Ethereum? What about all the other ERC tokens that aren’t on Harmony yet?
Harmony ONE is working on the cross bridge for Bitcoin as well! Sure right now if Viper wanted to, they could use WBTC-ONE pairing on the platform for yield farming (which would turn into 1WBTC), but soon you’ll just have 1BTC wrapped directly from BTC. When you start getting yield farming platforms offering BTC-ONE APRs, how many ONE tokens will have to be purchased and paired with BTC? What happens when you have more than 1 yield farming platform on Harmony and there is competition that comes into the platform?
Harmony vs BSC vs ETH yield farming
Now now, this isn’t going to be a “BSC killer” or “ETH killer”, these platforms can all work together. But, why would I want to pay $0.3 – $2 per transaction on BSC which is Centralized DeFi when I can just use DeFi instead and pay basically nothing? Because of this, in my opinion yield farming DEXes are going to become huge on Harmony. But let’s go on some examples right now.
I went onto 1INCH yesterday. I haven’t been on there since like JAN or FEB. Pools only last like 1 month at a time and I had earned like $100 off of my near $2000 USD investment. How much did it cost me to harvest? $150. Get REKT me. I lost $50 in order to provide 1INCH liquidity, which $2000 is a decent amount of money. I did another pool with about $1500 and lost $75 in order to harvest it! They launched a new 30 day pool, but what can I do? Do I want to double my investment and deposit $4000 in order to make $300 and lose $150 in fees? Well then I can chase in BSC (which I have done in the last month) and now yield farming with BEEFY and AUTO optimizers are super awesome. I made a post yesterday about how I made up to 735% APR on my ETH pairing for my 1 week time frame. My farms are making anywhere from 10%-1000% APR (or higher for the insane risky projects). Super cool awesome. BEEFY/AUTO are yield optimizers based off of YFI (from ETH) and basically the idea is the same… Basically it…
Takes your liquidity pool tokens and issues you back their replacement token.
Groups all the liquidity pool tokens into 1 contract.
Harvests the rewards from the farming pool so you only pay 1 fee for all the deposited money (vs potentially thousands of wallets).
On pairings, let’s say DOT<>BNB pairing on pancakeswap which earns CAKE. It will automatically sell CAKE several times a day and buy more DOT and BNB and redistribute it back to the LP holders. So you actually earn more liquidity pool tokens instead of the native tokens of the DEX. You could do this process yourself, but if you don’t have very much liquidity then you may have to wait weeks to bypass the ~$1 processing fee whereas this will optimize it daily and do several compounds a day.
Now let’s talk about yield optimizers on Harmony. This isn’t a thing yet. I only know of 1 other DEX being in development right now for Harmony which is MOCHISWAP. Are there more? Probably. But let’s say its the summer of 2021 and I am right and DEXes are HOT on Harmony. There are thousands of DEXes on Harmony. Well someone is going to fork off of BEEFY. Someone is going to fork off of YFI directly. Someone is going to fork off of AUTO farms. But what’s the difference?
Power of compounding interest
10% interest compounded yearly = 10% APR
10% interest compounded monthly = 10.4713% APR (4.7% increase)
10% interest compounded daily = 10.5156% APR (5.12% increase)