Yield Farming Report # 8

Yield Farming Report # 8

Farming with Origin Dollar, Osmosis and MM Finance

Disclosure: Members of Nansen may be participating in some of the following strategies and farms. This statement discloses any conflict of interest and is not a recommendation to purchase any token or participate in any of the mentioned farms. This content is for informational purposes only and is not investment advice. Please exercise caution if you are participating in these strategies.

Introduction

This week's farming opportunities span across Ethereum, Cronos Network, and  Cosmos ecosystems. The 3 opportunities we cover include the following:

Farms

Ethereum

Origin Dollar (OUSD)

Origin Dollar (OUSD) is a stablecoin that was initially launched in September 2020 on the Ethereum network and is backed 1:1 by other stablecoins. By design it captures yields while being passively held in wallets:
The OUSD smart contract will deploy your underlying capital to a diversified set of yield-earning strategies, rebalancing over time to achieve yields while diversifying risk. Earnings automatically accrue in your wallet and compound continuously while you hold OUSD; no staking or lockups are required.

Cosmos

Osmosis

Osmosis is an IBC enabled DEX within the Cosmos ecosystem that is designed for customizability and a rapid design space. It is the largest DEX within the Cosmos ecosystem and it is offering LPs liquidity incentives through its governance token OSMO. LPs can permissionlessly create pools and design parameters to their needs because the protocol uses self-governing liquidity pools. Learn more about Osmosis stats here and reference our previous report here. You can also track the IBC transfers from Osmosis and other IBC enabled chains here, which shows Osmosis as the most active and used Cosmos Zone today. They facilitate daily volumes of nearly $30m and have over $566M TVL at the time of writing.

Cronos Network

MM Finance

MM Finance (previously CrocSwap) is a DEX/AMM on Cronos Chain that offers fee rebates via trade mining (10% fee rebates via $MMF). The exchange charges a low fee of 0.17%  for every trade, where 0.10%  is returned to liquidity pools in the form of a fee reward for liquidity providers and a portion of the fees (0.05%) is used to buyback $MMF to form Protocol Owned Liquidity (POL). The project has 100 $MMF being emitted for every block through all farms/pools and uses a multiplier to determine the amount of emissions allocated to a specific pool/farm. The total multiplier on the platform adds up to 200x. The multiplier is determined based on the amount of trading volume and total TVL locked in that farm.  The project’s Total Value locked stands at $170 million and its smart contracts are audited by Certik.

Farming Guide

We will go over each farming opportunity, give step by step guides, and go over the risks and opportunities associated with each of them. Yield from these opportunities may comprise the protocol’s native token and other protocol rewards.

Format

Each farming opportunity will follow the same format:

  1. A brief summary of the protocol we are focusing on
  2. An overview of the popular pairs and their respective yields and risk
  3. Key takeaways from the pools mentioned
  4. Tutorial on how to LP/Farm in the given pool

If we utilize Nansen dashboards, we will give a tutorial/guide on how to recreate the dashboards for your farming activities.


Image

Origin Dollar (OUSD)

(website/twitter)

Origin Dollar (OUSD) is a stablecoin that was initially launched in September 2020 on the Ethereum network and is backed 1:1 by other stablecoins. By design it captures yields while being passively held in wallets:
The OUSD smart contract will deploy your underlying capital to a diversified set of yield-earning strategies, rebalancing over time to achieve yields while diversifying risk. Earnings automatically accrue in your wallet and compound continuously while you hold OUSD; no staking or lockups are required.

OUSD hodling

The main selling point of OUSD is that you do not have to enter a specific farm, just hold the coin and it will do the farming for you and rebase and compound in your wallet. When staking OUSD or entering a LP position, OUSD will stop rebasing for you and you will “only” get the rewards from the farm / LP you entered.

There are also OUSD pools available on Curve (8.33% APR) and Convex (13.7% projected APR), however as Origin protocol currently does not incentivize those pools anymore, the APRs there are lower than just hodling at the moment, especially considering gas cost for entering the farm and harvesting rewards. Rest assured, if there are incentivized farms for OUSD again, we will cover them here.

Data as of December 15th, 2021
Source: Origin Dollar

Takeaway

Ousd has been around for some time now in DeFi terms and has provided solid yields with close to no effort required. You can see your profits directly in your wallet as OUSD rebalances and get competitive yields while being able to swap back to your favorite stable coin directly on the website.

Also their incentivized curve pools (if they start again) will probably give very good yields, the last campaign got up to 300% APR on the OUSD-3CRV pool just a few weeks ago. Rumors are that they are currently spending some money on bribing convex voters which could result in 4x the rewards to LP's than just using the OGN directly - this one is definitely one to keep on the radar.

Hack in Nov. 2020:

The project had its problems in the beginning and even got hacked at some point in November 2020, but since then they patched up the vulnerabilities and also made sure to compensate the people who lost funds (people who lost funds actually made a huge profit if they held onto their $OGN token compensation for some weeks).

We think this attitude shows that the project is here to stay, can handle difficulties and puts making users whole again first - which we think is a good sign.

Tutorial on getting OUSD

  1. Reference our Ethereum Wallet/bridging setup here if you are new to Ethereum
  1. Head over to https://www.ousd.com/swap and connect your wallet with the Ethereum network selected. Be sure to have either DAI, USDT or USDC ready
  1. Select the stablecoin you want to swap for OUSD and click “Swap”. The website will automatically choose the best exchange route for you, even factoring in gas prices
  1. That’s it! Just keep your OUSD in your wallet and your balance will increase.


Image

Osmosis Farms

(Website/Twitter)

Osmosis is an IBC enabled DEX within the Cosmos ecosystem that is designed for customizability and a rapid design space. It is the largest DEX within the Cosmos ecosystem and it is offering LPs liquidity incentives through its governance token OSMO. LPs can permissionlessly create pools and design parameters to their needs because the protocol uses self-governing liquidity pools. Learn more about Osmosis stats here and reference our previous report here. You can also track the IBC transfers from Osmosis and other IBC enabled chains here, which shows Osmosis as the most active and used Cosmos Zone today. We will be doing a tutorial on the steps to LP from an exchange and from another IBC chain below.

It has been exactly 6 months since Osmosis officially launched and they consistently facilitate daily volumes of nearly $30m and have over $566M TVL at the time of writing. It is important to track the integration of IBC amongst chains built out on the Cosmos SDK, and where the potential liquidity will flow. It is in our belief (and has been historically) that the liquidity will flow to Osmosis who will be the liquidity Hub of the IBC ecosystem. For example, let's highlight the growth of UST into Osmosis since Terra enabled IBC. Osmosis is now the third largest exchange (both CEX and DEX) for $UST by volume, in just under a few months. The UST - OSMO pool has increased 12.5x in TVL since our first yield report on Osmosis and yields still remain well above 100% APY. As we see other stables launch within IBC, members should expect to see high yielding stable pools when the liquidity flows to Osmosis. 

Note, all unclaimed genesis tokens (claimable airdropped tokens), over 32 million $OSMO and 16572 $ION, have been placed in the Osmosis community pool. What should we expect from these new funds? $OSMO community fund treasure chest essentially grew by $121 million and can be used to implement additional liquidity incentives, cosmwasm or have some hackosmo rewards with it.

Osmosis Farming Exposure Summary

Takeaway

The yields on Osmosis have been consistently high since they started their LP incentives. We are revisiting them in this report for 2 reasons - new LP pairs added and yield consistency with higher volumes. Above, we mainly highlighted the $OSMO base pairs because they have higher APY than the $ATOM pairs. However, the yields are also very high on the $ATOM pairs. Osmo and Atom are relatively correlated in price action. Since November, the ATOM/OSMO pair has sat in between the 5-6 range, although over a longer time frame $OSMO has outperformed $ATOM. Note, some of the pools receive external incentives and those are noted with the dual rewards in the ‘Reward Asset’s’ column.

Future Catalyst

Osmosis is working on innovating the design space for AMMs. They have many features in the pipeline but the one to keep note of in regards to earning yield is ‘Superfluid Staking’. The concept is to be able to stake your LP tokens to receive fees and incentives like you already do now but also earn $OSMO staking rewards for helping secure the network at the same time. In short, use your tokens for LPing and staking at the same time, which earns more rewards for the liquidity provider. No longer does an $OSMO holder need to decide between staking their tokens to secure the network or LPing for fees/incentives - they can do both at the same time.

Tutorial for Participating in Osmosis Farms

In order to participate, you will need to send funds over to Osmosis. We have already created a in depth tutorial for Alpha members that go over:

  • Transferring Assets From Centralized Exchanges using Keplr Wallet
  • Sending assets from any other IBC Zone using Keplr Wallet
  • Sending assets from Terra (on Terrastation wallet or Keplr)

Please reference our guide that provides step by step instructions on how to get started with the Osmosis network and IBC enabled blockchains more broadly. When you are finished transferring your funds, you will then need to provide liquidity to your desired pools. We will have our farming guide below.

Farming on Osmosis

  1. Once your wallet is funded, you will want to deposit funds over to Osmosis, which is its own separate chain. Each Zone in Cosmos is its own sovereign blockchain with its own validator set. The glue binding them together is IBCm which allows you to transfer funds across them for pennies. If you deposited $ATOM from a CEX, your funds will be on the Cosmos chain to begin with. If you deposited $UST or $LUNA, your funds will be in the Terra wallet on Keplr. To LP on Osmosis, we will need to transfer them to Osmosis. Note, unlike Ethereum and other L1s, the IBC transaction fee can be paid in any token, not just $ATOM.
  1. Navigate to the Osmosis assets page here to see the full list of assets on the platform.
  1. Click on ‘Deposit' for the asset you'd like to deposit via IBC, in this case we will use $ATOM. Osmosis automates the complexity behind its UI. When you use their ‘Deposit’ button, it will transfer your $ATOM from your Cosmos wallet to your Osmosis wallet - all done within your Keplr. Input the amount you'd like to deposit and it will execute it in seconds. Your funds are now available and you can LP, swap or whatever else you'd like in Osmosis. You would do the same for $UST and $LUNA or  any other asset you wish to deposit. Note, if you do not see your assets immediately, make sure to refresh the page as it might lag from time to time.

To withdraw funds, simply navigate back to the assets page here and click withdraw. You can then withdraw your $ATOM back to your Cosmos wallet or $LUNA and $UST to your Terra wallet (on Keplr). You can also wish to send the Terra assets to any wallet or CEX that supports the native tokens, not a wrapped version. You can NOT do this on Coinbase, as $UST and $LUNA are wrapped versions.

Image

MM Finance

(Website/Twitter)

MM Finance is a DEX/AMM on the Cronos Chain. MM Finance started off as CrocSwap but was later acquired by MadMeerkat.io and rebranded as Mad Meerkat Finance. Prior to the acquisition, the team was working on an exclusive partnership for Mad Meerkat NFTs to be staked and utilized on CrocSwap. On top of staking Mad Meerkat NFTs for additional farming rewards, MMFinance will also be building an NFT marketplace where users can buy/sell or auction Mad Meerkat NFTs via $MMF tokens. 

MM Finance AMM offers fee rebates via trade mining (10% fee rebates via $MMF). Additionally, a low fee of 0.17% is charged for every trade on the exchange, where 0.10%  is returned to liquidity pools in the form of a fee reward for liquidity providers and a portion of the fees (0.05%) is used to buyback $MMF to form Protocol Owned Liquidity (POL). The project has 100 $MMF being emitted for every block through all farms/pools and uses a multiplier to determine the amount of emissions allocated to a specific pool/farm. The total multiplier on the platform adds up to 200x. The multiplier is determined based on the amount of trading volume and total TVL locked in that farm.  The project’s Total Value locked stands at $170 million and its smart contracts are audited by Certik.

MM Finance farms breakdown

Takeaway

There are various farms offering high rewards on MM Finance. The USDC/USDT farm in particular, offers a good yield of 40% with minimal impermanent loss risk. This makes it a very competitive farm in comparison to other stablecoin yields being offered on Cronos. It is also important to note that MMF staking is available on the platform. It is currently offering 889.24% APR and a total of 1,651,784 MMF have already been staked. Additionally, it is worth remembering that gas fees are paid out in $CRO so ensuring you have enough $CRO in your wallet is critical.

Tutorial for MM Finance

Ensure you have enough $CRO and then navigate to https://mm.finance/farms

Stake LP
  1. Select the farms you wish to stake
  2. Click 'Approve Contract'
  3. Click 'Stake LP' and enter the amount of LP, then click 'Confirm'
  4. Confirm the transaction in your wallet
  5. You can go to https://crypto.org/explorer/ to see your transaction details

Unstake LP
  1. Select the farms you wish to unstake
  2. Click '- (Unstake LP)' and enter the amount of LP, then click 'Confirm'
  3. Confirm the transaction in your wallet
  4. You can click https://crypto.org/explorer/ to see your transaction details

Harvest
  1. Select the farms you wish to harvest
  2. Click 'Harvest'
  3. Confirm the transaction in your wallet
  4. You can go to https://crypto.org/explorer/ to see your transaction details

Closing Thoughts

We hope you guys found this report useful and feel free to recreate any of the above mentioned strategies for other farms. Please reach out in the Discord to let us know if there are any questions you might have or further opportunities you’d be interested in the Alpha team exploring. 

These strategies involve smart contract risks, IL, and yields can fluctuate. Exercise these farms with caution and best of luck farming!

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