Lending Rate Update 🧮

Weekly lending rate updates on CeFi & DeFi platforms.

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Hi everyone,

Click here to access the interest rate tracker. It’s been updated so you can see the best rates offered among the various lending platforms. Also, please consider signing up for new platforms with the referral links posted by the moderator. He updates and maintains the excel spread sheet. I’m sure he’d greatly appreciate it.

Solana Farms

This week I’ll be featuring new yield opportunities on Solana. Moreover, I’ll cover upcoming projects you should keep an eye on. These DeFi primitives as collective are making the market more efficient as they iterate towards a more transparent, equitable, and permissionless future. I’m investing countless hours researching because I’m confident this is the future. Over the next few months makes sure to pay close attention to these newsletters, because I’ll be introducing new protocols and portfolio management strategies.

Let me know in the comments section which chain and asset/s you would like me to focus on in the coming weeks. Also, I always welcome constructive feedback that helps me improve the quality of my content

Katana

The Katana team won the Grand Prize at the Solana Ignition hackathon. Their protocol will create and package strategies for users into vaults. Interested parties simply deposit their assets into these vaults to generate a yield. Their product suite consist of structured products and automated vault strategies. This essentially will encompass the entire spectrum of risk for maximum inclusivity. The primitive will remain permissionless which will enable stacking and composability.

Their current vault takes in SOL deposits and issues out of the money calls. If the option expires, investors will get their initial deposit plus a yield. However, if the call option is exercised the depositor will suffer a loss. With the current model, they’ve selected strike prices that are unlikely to be reached so the risk is low. In the image above you can see the options contract will only result in a depositor loss if the price of SOL goes above $230 in the next 17 hours - highly unlikely.

Crema

They are building DeFi 2.0 products beginning with a concentrated liquidity market maker (CLMM). In other words, they’re building Uniswap V3 of Solana. Additionally, they’re also innovating on LP tokens by issuing LP NFT farming. They’ve figured out how to give users NFTs as redemptions tokens for the liquidity they provide. Lastly, they’ll leverage aggregators like Jupiter to unlock ecosystem wide liquidity.

Currently you can’t earn yield by providing liquidity but in December they’re aiming to launch their beta product. Devnet displays the following pools which maybe a leading indicator for what pools they plan to launch with.

Atrix

This is the only Serum automated market maker that allows for permissionless liquidity pools and farms. Anybody can create pools and farms with custom emissions to kickstart their project. As this protocol becomes more popular I expect to see many more farms launched. I’m following them on Twitter so I can keep track of all new farms. At this moment I don’t see any appealing farms, but I’ll make sure to notify everyone on Twitter once something worthwhile materializes.

Upfi Network

This partially algorithmically backed USD stablecoin. Two tokens are used to collateralize UPFI, USDC and UPFI share token (UPS). An UPFI token is minted when a user deposits USDC and UPS - the USDC is locked in the protocol and the UPF is burnt. The opposite happens during a redemption, user will get their USDC deposit back and the protocol will mint USS.

The percentage of USDC in both transactions is determined by collateral ratios which you can examined further in the docs. The takeaway here is that this protocol is innovating with a novel design for a partially algorithmic stablecoin. As we’ve observed with Iron Finance, these experiments can go catastrophically wrong. However, given this is a relatively unknown protocol and the yield isn’t over the top, I suspect the overall risk is mitigated

They’re offering a generous yield of 23% on the stablecoin pair. Unless they increase the emission, it’s likely to get diluted quickly down to the market average of 10%.

Mercurial Finance

Their initial focus was building a liquidity system for stabelcoins to facilitate large exchanges with low slippage. This later expanded to include liquid staked SOL and and SOL. In contrast to most liquidity pools, users are only required to deposit one of the pooled assets. For example, in the pools listed below users can begin earning yield by depositing one of the following assets:

• wbBUSD

• wbUSDC

• wbUSDT

• USDC

Orca

This is another automated market maker on Solana. They aim to distinguish themselves by offering a superior user experience. With their current double dip incentives, depositors can receive one of the most competitive yields on SOL of 9.3%

Don’t forget mSOL is liquid staked SOL that appreciates over time with staking rewards. This means your realized APR is a little higher than 9.3%.

Sunny Aggregator 

This is an auto-compounding protocol like BiFi. Always pay attention to whether the yield is reported in APY vs APR. It makes bigger difference when the yields exceed triple digits. Often times auto-compounding protocols will report APY instead of APR to make their yield appear more competitive.

I still use them to auto-compound my yield which considerably reduces my management time. Below I’ve listed a few high yield pools worth looking into:

• pSOL-prtSOL 14%

• apUSDT-USDT 16%

• PAI-USDC 19%

• CASH-USDC 25%

• wHUSD-USDC 18%

• wFRAX-USDC 19%

• scnSOL-SOL 23%

• wpUSDT-USDT 29%

• ahUSDT-USDC 26%

Remember if it’s a Saber LP, you can deposit single sided liquidity with USDC alone. 

Useful Tools

Jupiter Aggregator

This is the 1inch of Solana. Until an EVM solution is added to the chain, Jupiter is likely to remain the top DEX aggregator on Solana. Instead of using different DEXs to to satisfy liquidity needs, you can let Jupiter do all the work for you. It’s become my go to for executing trades. I encourage everyone to preview orders before execution. This way you can identify and select the best pricing. 

Step Finance

This dashboard is the Zapper.fi of Solana. It’s an indispensable tool for portfolio management. Users can track assets, yield farms, and NFTs using one user interface. Additionally, they’ve compiled a list yield farms from Orca and Raydium.

DeFi Tip

During a market chop it makes sense to provide liquidity to a USDC/Crypto pool. We’ve just experienced a local blow off top> It could take a few weeks for the market to consolidate before pushing to new highs. In this setting it would make sense to enter a pool like SOL/USDC. If the market pushes higher you’ll profit from the SOL exposure. Conversely, if the market moves down you’ll increase your SOL position and USDC will act as a hedge. Lastly, you’ll also earn pools fees and yield farming rewards while this takes place. Once the market makes a decisive move the LP position can be exited to maximize gains or to minimize losses.