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Today’s interview features @Vfat, a professional Yield Farmer who we have welcomed onto our Don-Key platform!
The Don-Key platform distinguishes itself from competitors by creating a collaborative effort between yield farmers willing to share their strategies. A total of 600 token holders can follow these yield farming strategies to acquire passive yield and accelerated $DON token airdrops. Staking more tokens increases one’s chances in the lottery to be eligible for farming other yield farmers and their strategies.
Yield farming is a very competitive space where having the right strategy will pay dividends. Gaining access to the optimal strategies will help users increase their return on investment. Maximizing the APY across different farms becomes far more straightforward with solutions such as Don-Key.
Get ready for expert answers from a man who has positively plowed through the yield farming world and is reaping its abundant rewards.
As all investors do at some point, @Vfat has taken an active interest in generating a passive income. He understands it can be a phenomenal revenue source, especially when the bull market will come to an end. To that extent, he has built vfat.tools, an all-in-one yield farmer’s dashboard with all the necessary tools to access the popular #DeFi farms!
Let’s hear how @Vfat got started in the DeFi world as he shares valuable tips and insights:
1) I am a big fan of your vfat.tools. How did it all begin? How did you get into the farming field?
Well, I’ve been using crypto on and off since 2013, but last summer, I was first exposed to DeFi and yield farming. After reading an article on The Defiant, my first DeFi transaction was opening an Instadapp vault so that I could yield farm COMP with leverage. Two weeks later I was farming YFI, and more than 10,000 transactions later, I am still at it!
2) What are the current main strategies in the market? Can you talk more about “Arbitrage” Yields? How does yield farming make money?
Yield farming has replaced Initial Coin Offerings as a way for a project to distribute its tokens to supporters. The supporters either provide something in return (providing liquidity for the new token) or just stake other tokens as a way of spreading the word to other communities. At the basic level, strategies are:
- farming the new token and holding it,
- farming it, and compounding it into your farming position (turning an APR into an APY)
- or just farming and dumping it to ETH/BNB.
3) What are the (key) risks with the yield farming industry? Is it worth yield farming with volatile assets?
Risks are plentiful! Sometimes projects are created solely to steal users’ funds. Sometimes smart contracts fail in unexpected ways. Or sometimes the tokens you used to farm depreciate in value. Recently with the ETH price jump, nearly all of my farming positions underperformed (versus) ETH, though of course this evens out in the long run. Risks, however, can be managed very effectively through diversification: different assets, different platforms, even different blockchains now. With the help of Don-Key, it becomes easier to explore the many options at one’s disposal.
4) With ETH/BNB skyrocketing to ATH, how did it affect your strategies? Are you skipping opportunities on ETH/BNB?
Actually, this issue is sort of a good problem to have. Basically the answer is ‘yes.’ If BNB or ETH exploded like that, you would have been better off holding it in your wallet rather than yield farming, but you are still profiting handsomely from having BNB in a liquidity pool vs (versus) just holding BUSD. On the other hand, when the market is flat or going up steadily, you are much better off yield farming vs just holding BNB.
Layer 2 yield farming
5) How is the layer 2 yield farming market going to be different than the current status quo?
Layer 2 yield farming is great because it gives newcomers the opportunity to learn all this stuff without paying the recent exorbitant gas prices on ETH (though this may be getting better now). What remains to be seen is how well these different chains can interact with each other. Otherwise we will have a silo problem, with liquidity fragmented everywhere.
6) What kind of yield farming platforms do you want to see coming more to market?
Yield farming is fantastic if you know what you’re doing, but there are so many pitfalls, and just so much leg work involved. A platform like Don-Key Finance, where people can follow others’ yield farming strategies, has been sorely lacking. Giving people the opportunity to have exposure to all of this without the friction is bound to get a lot more newcomers involved in our field. The strength of Don-Key lies in letting users boost their yield without introducing unnecessary friction.
As for my own platform, vfat.tools, this is for the more experienced yield farmer who can assess the risk of each farm for themselves: they can track their positions and profits. There is still so much more that can be done along these lines. Rest assured I am exploring it!
7) Are you seeing good yield farming opportunities for Binance Smart Chain?
BSC is absolutely here to stay, and this is a great thing! Ethereum is of course the One True Chain, but that doesn’t mean there shouldn’t be others. We need competition to innovate. Yield farming on BSC benefits greatly from the lower transaction costs, and this has led to stuff that simply did not exist on ETH, such as all the auto-compounding yield optimizers.
8) Which blockchain do you think will be the next one to attract yield farmers the most?
Polygon is making headway here with Aave being the heavyweight addition, and Curve dipping its toes, yet they need to continue to attract useful projects that serve a purpose in the ecosystem.
9) What do you think about NFT Liquidity pools, and where do you think it’s going to be in the future?
I haven’t had the chance to look into NFT liquidity pools properly yet, though it makes a lot of sense, and I am looking forward to seeing more applications of this. In particular, I would like to see NFTs holding collateral + debt positions which can then be traded, or even used on other chains.
10) Do you think that APR of 100%+ can last in the long term?
Of course not, but what we don’t know yet is the length of the term. People thought it would be over after last summer, yet it has not abated in the slightest. Instead, we are witnessing a Cambrian explosion of chains, platforms, protocols, and farms.
An invaluable chat with our newest team member. Feel free to ask us any further questions about yield farming, or any interests grown from the seeds of this interview – we are always here to help you reap your own rewards as well!