Yield-Farming is an attractive proposition within DeFi and has become a lodestone of the ecosystem’s liquidity infrastructure. Users are constantly in search of lucrative Stablecoin Yields to maximize returns on their Yield-Farms. In that regard, Overnight’s flagship Stablecoin — USD+ — delivers lucrative returns and is on par with some of the most lucrative yields within DeFi.

Yield-Farming refers to the act of providing liquidity to facilitate trading, borrowing, derivatives, and other activities to earn incentives for doing so — this is at the heart of DeFi. In this article, we’ll be exploring some of the lucrative Yield-Farming strategies in the ecosphere along with comparing the enticing APYs (ranging at 8–12% APY) offered by USD+.

Stablecoin Yield-Farming Strategies

Let’s take a look at some of the most popular Yield-Farming strategies and how to go about them.

#5: Supplying liquidity for Synapse Stableswap — 7–9% APY

Synapse allows users to provide utility for nexus-pegged stablecoins (nETH or nUSD) in exchange for earning passive swap fees & SYN rewards (the protocol’s native token). The protocol seeks to establish deep liquidity for its derivatives and has amassed a $50M TVL across all chains for its Stableswap.

A stableswap can be referred to as a Decentralized Exchange supporting trades between highly correlated assets at minimal price impact. For instance, users swapping between stables would want to maximize the amount that they receive from the swap — a high price impact would act as a deterrent for them. Hence, a stableswap facilitates exactly this.

Synapse’s Stableswap is on multiple chains which mean that you can provide liquidity on your desired chain in exchange for 7–9% APY on your Stablecoins or Ethereum — an enticing proposition.

#4: Lending USDC on Clearpool — 9–15% APR

Lending & Borrowing is crucial for DeFi participants. It enables participants to borrow and lend funds at their will and earn passive income alongside. Lenders earn interest on their lent amount whereas borrowers benefit from the liquidity gained, at the expense of paying lenders.

Clear Pool is one such platform that enables institutional investors — including Wintermute, Amber Group, Parallel Group, etc — to borrow loans from retail investors; this is a relatively new craze within DeFi.

Interest rates are driven by pure economics, i.e, on the basis of demand & supply. As more of the supplied assets are withdrawn by the institution (the Utilization Ratio), the interest rates increase dynamically. For an in-depth review of the utilization curve, refer to the chart for the respective institution that you intend to lend towards — the following is for Ledger Prime.

Clearpool gives users autonomy in that it enables them to lend in favor of their desired institution with differing rates offered for each (refer to the ‘Lend APRs’ in the image attached). Prospective lenders can also refer to the Financial Data (borrower rating & other data provided) to make a more concrete decision. The overall lend APRs range around 9–15% APR.

#3: Folding on Sonne — 11.4% APY

Folding is referred to as the act of opening a ‘lending’ and ‘borrowing’ position simultaneously — this takes it a step further from Clearpool and hence, has higher APYs. Usually, borrowers pay a higher rate than lenders; however, in this case, the token incentives (paid out in the native token — $SONNE) make it profitable to do so. Such rewards are lucrative at the launch of a Money Market to encourage amassing greater liquidity.

The idea behind Folding is illustrated as follows:

a) Lend USDC: Earn a Net 4.33% APY for lending USDC as collateral (sum of Supply and Reward APY)

b) Borrow USDC: Pay 1.45% for borrowing USDC against your USDC (difference b/w borrow and reward APY

c) Loop: Redeposit your loan to earn an additional 4.3% APY — the more loops that you do, the greater the APYs. We’d recommend going no greater than 95% of your borrow limit after taking into account looping. Refer to the protocol documents for more information on this.

A single loop nets you 2.85% APY (4.3–1.45) and looping 4x would net you a total of 11.4% APY while still staying under a healthy borrow limit. Note that folding for the same asset (in this case, USDC) reduces the likelihood of liquidation owing to no price fluctuations between your collateral and loan.

This strategy requires active monitoring and hence it may not be ideal for everyone; once looping is no longer profitable, so will this strategy.

#2: Supplying Single-Sided Liquidity on Echidna Finance — 6–8% APR

Echidna is a Yield-Booster built for Platypus Finance. This means that users can earn boosted APRs on their Stablecoins without having to own $PTP — the platform’s governance token. Echidna Finance achieves this by leveraging its own holdings of $PTP for this purpose.

The protocol offers a modest 6–8% APR on Stablecoins — compare this with Platypus itself where the base APRs are a conservative 1–2%.

#1: USD+, A Stablecoin that Dominates them All — 8–12% APY

In case you found the above strategies difficult to navigate, then USD+ is your perfect companion. As you can see, navigating DeFi can be quite cumbersome and USD+ offers its users simplicity while staying true to offering lucrative yields.

USD+ is built by Overnight Finance — An Asset Management Protocol — that allows users to mint their USD+ with USDC (or BUSD on BNB Chain) and the corresponding collateral is then deployed across a diversified plethora of Yield-Generating Liquidity Pools. The yields are paid out on a daily horizon and auto-compounded to maximize returns — APRs become more APYs.

Similarly, DeFi is versatile. Circumstances can often change — the strategies mentioned above may not be lucrative tomorrow. Therefore, the Overnight protocol optimizes APYs with this in mind and exercises prudency when it comes to Risk-Management. This methodology enables it to offer lucrative yields throughout its lifespan.

The Overnight protocol also champions transparency as users can at any given time reference the collateral to determine the Yield-Generating revenue (reference attached below for Polygon).

The end result is a user earning 8–12% APY merely by holding USD+ and hence, this makes yields accessible where it wasn’t the case before.

The All-Time APY for USD+

Visit here to get started — USD+ can be minted for an equal amount of USDC and can be withdrawn at any given time.

Yield-Farming: Lucrative or a Fad?

We’ve covered some of the most popular Yield-Strategies within DeFi and concluded that no strategy can be lucrative throughout its lifespan owing to DeFi being versatile. However, this dilemma is effectively solved by Overnight as its versatility enables it to shift to more lucrative strategies when needed and continue to deliver consistent and attractive returns for its users.