Weekly Analyst Thoughts
Curve Dao Token- CRV
In the Defi ecosystem, three major decentralized exchanges, Dexes, are used. These Dexes are Uniswap, Balancer, and Curve.
Balancer’s BAL token incentivizes Defi users to become liquidity providers within their Balancer pools to earn BAL tokens, while Uniswap has the network effect of being one of the first Dexes to have liquidity pools. Curve, on the other hand, is known as the stablecoin Dex where users can seamlessly exchange stablecoins like sUSD, DAI, USDC, and USDT, making them one of the most popular Dexes in the ecosystem. To add to their fervor, Curve has released their own CRV token to incentivize Defi users to contribute to their liquidity pools.
The rewards for CRV tokens are between 57-150% for contributing to a Curve liquidity pool. I would recommend that Defi users combine Compound liquidity rewards with CRV liquidity rewards to maximize their yield farming earnings.
Example Yield Farming Scenario:
- Supply $10,000 of USDC to Compound Protocol: Estimated Interest Revenue: $671, Compound Liquidity Earnings: $817
- Supply $10,000 cUSDC tokens received from supplying to Compound Protocol: Estimated Interest Revenue: $822, CRV Liquidity Earnings: $6,056
Estimated Yield Farming APY: 83.66%
In summary, with the addition of new yield farming tokens, there is new opportunity to combine different Defi protocols and earn higher than normal APY, all while helping other Defi users trade seamlessly between different Ethereum ERC-20 tokens.
By Jacob Stelter
Disclosures: Not investment advice. It should be assumed that Sarson Funds or its affiliated managers hold positions in all projects that are discussed. It is not possible to invest in any project directly through Sarson Funds, Inc. or its affiliated managers. Any investment product offered by managers affiliated with Sarson Funds should be assumed to be only available to Accredited Investors and subject to the individual terms and conditions of that offering including but not limited to those eligibility requirements associated with U.S. Securities Regulation D, section 506c. Talk with your financial advisor before making any investment decisions or have them contact Sarson Funds directly at [email protected]
