Rainforest Stack #001: Best DeFi Yields (Nov 16, 2023)

Welcome to the jungle. In our previous post, we introduced the Rainforest Stack Framework. Today, we’re sharing the first issue of the Rainforest Stack yields of the week. Enjoy! 

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Stablecoin inflows have flipped positive for the first time in eighteen months. Instead of rotational traders sucking capital from one project to pump another, net capital inflows drive the current price action.

Holding a bag from the last cycle? DCAed into altcoins throughout the bear market? Looking to invest a lump sum now that positive sentiment has returned to the market? DeFi will forever be the best way to maximize upside potential in crypto.

Introducing the Rainforest Stack. A guide to the ever-evolving world of DeFi yield.

Constituted of four distinct layers: undergrowth, understory, canopy, and the emergent layer. Each layer boasts a different level of risk broadly categorized in line with the Lindy effect- the longer something has survived, the more likely its continued existence becomes. An impact with oversized ramifications in the crypto space where hundreds of new protocols live and die each quarter.

Avalanche

The Emergent Layer- Enduring Yields

Protocol: Stargate
Token: $USDC

Supplying USDC to Stargate currently earns investors an APY of 6.2%. Yields have increased as users have pulled liquidity to deploy into the market. This effect will be observable across DeFi, allowing users holding stables to earn juicy yields across the board.

Protocol: Stargate
Token: $USDT

Supplying $USDT on Stargate nets users a slightly higher APY of 7.31%.

Protocol: YieldYak
Token: $AVAX

Holding $AVAX is the best way to gain exposure to the ecosystem growth and YieldYak’s autocompound pool pays out 4.76%. The strategy is simple: deposit AVAX and earn AVAX. The YieldYak AVAX pool loops lending and borrowing on Benqi for low-risk leveraged returns.

Protocol: GMX V1
Token: $GMX

Users can stake $GMX and earn rewards in $AVAX- current APY 3.66%.   

Protocol: Ankr
Token: $AVAX

Ankr is one of DeFi’s most reliable liquid staking protocols, and rewards stand at 6.45%.

Canopy Layer- Established Yields

Protocol: YieldYak
Token: $JOE

Staking $JOE in the YieldYak pool currently yields 10.18%, and the pool automatically sells the stablecoin rewards distributed to $JOE stakers on TraderJoe and swaps them to $JOE. APY is steadily increasing due to increased trading activity ($JOE stakers earn a portion of trading fees).

Protocol: TraderJoe
Token: $AVAX/$USDT

Bolstered trading activity has led to incredible APYs for yield farmers. The AVAX-USDT pair currently yields 56.24%. TraderJoe’s Liquidity Book model has made yield farming far more lucrative for farmers and more capitally efficient for traders thanks to its use of liquidity bins. But please note that this pool must be manually balanced.

Protocol: TraderJoe
Token: $APT (AutoPoolTokens)

Users not comfortable manually rebalancing farming positions can leverage TraderJoe’s Auto Pools. APYs are impressive, and because of the Arbitrum STIP, the bulk of $JOE emissions are being distributed on the Avalanche network.

Users earn trading rewards on their liquidity position and can further stake their receipt token to earn $JOE emissions.

Understory- More Unpredictable Yields

Protocol: TraderJoe
Token: $AVAX/$JOE

Demand for altcoins is up, and yield farmers in the AVAX-JOE pool have been reaping the rewards- paying out a yield of 246.31%.

Undergrowth- Newest Players/ Highest Risk

Protocol: BetSwirl
Token: $BETS

BetSwirl is a new contestant in the GambleFi narrative, and users can stake the native token $BETS and earn $AVAX in return. Yield is 37.95%, which could grow as the protocol gains users, plus farmers are exposed to the upside potential of $BETS.

Protocol:
Token:

Arbitrum

The Emergent Layer- Enduring Yields

Protocol: Lido
Token: $wstETH

$ETH is the base financial currency on all layer twos. Investors active in DeFi on these chains can earn 3.83% by holding $wstETH as opposed to raw $ETH.

Protocol: Radiant
Token: $wstETH

Users supplying $wstETH on Radiant earn 0.49% alongside the 3.83% base staking rewards, bringing their total up to 4.32% on a blue chip asset without taking any excessive risk (smart contract risk and liquidity/ counterparty risk on Radiant. Users who lock sufficient $dLP will earn an additional 1.39% in RDNT, and lockers will also receive an $ARB allocation.

Protocol: GMX V1
Token: $GLP

Holders of $GLP hold a basket of assets and acting as the counterparty to all trades on GMX offers an APY of 18.36%.

Protocol: GMX V1
Token: $GMX

$GMX token holders are enjoying boosted yield thanks to increased trading activity and liquidations (RIP Sifu).

Protocol: Gains Network
Token: $DAI

Double-digit APYs for users depositing $DAI on Gains Network.

Canopy Layer- Established Yields

Arbitrum incentives are live on GMX V2, and the pools currently offer an excellent source of yield. Trading fees + $ARB.

Protocol: Pendle
Token: All Yield Bearing Assets 

Pendle teased its projected APYs for when it begins to distribute its STIP grant award. It will be very difficult to compete with these.

Protocol: GMX V2
Token: $ETH-$USDC

GMX V2 introduced isolated liquidity pools, and investors supporting the trading of $ETH on V2 are currently earning 31.14% APY (including $ARB incentives).

Protocol: GMX V2
Token: $LINK-$USDC

Protocol: GMX V2
Token: $SOL-$USDC

Protocol: GMX V2
Token: $UNI-$USDC

Protocol: GMX V2
Token: $ARB-$USDC

Protocol: TraderJoe
Token: $APT (AutoPool Tokens)

Arbtirum STIP means outrageous rewards for liquidity providers on TraderJoe. Users earn trading fees on pairs and deposit receipts to earn $ARB incentives currently in excess of 200%.

Understory- More Unpredictable Yields

Protocol: Grail
Token: Liquidity Provider Tokens

Arbitrum STIP making yield farming great once more.

Protocol: Radiant
Token: $dLP

Users contributing liquidity to this pool earn trading fees as well as unlock $RDNT emissions for deposits and borrows.

Protocol: TraderJoe
Token: $LP Tokens

The same play on TraderJoe as Camelot. Arbitrum STIP has made yield farming incredibly profitable (short-duration).

Protocol: TraderJoe
Token: $JOE-$ETH

Protocol: TraderJoe
Token: $LODE-$ETH

Protocol: TraderJoe
Token: $LBR-$ETH

Protocol: TraderJoe
Token: $PENDLE-$ETH

Protocol: TraderJoe
Token: $PLS-$ETH

Protocol: TraderJoe
Token: $USDC-$ETH

Protocol: TraderJoe
Token: $ARB-$ETH

Protocol: TraderJoe
Token: $GRAIL-$ETH

Undergrowth- Newest Players/ Highest Risk

Protocol: Arbitrove
Token: $ALP

Arbitrove is a yield-bearing index and strategy vault that exposes owners to all the most significant projects in the Arbitrum ecosystem. Current APY is approaching four figures, but note rewards come in vested tokens.

Project: JustBet (WINR)
Token: $WLP

Users can earn modest fees by supplying liquidity to support JustBet and DegensBet. Rewards come in $WLP (basket of assets) and $vWINR.

Protocol: Lodestar
Token: $LODE

Users can earn 11.63% APR staking $LODE with generated revenue from the platform paid out in $ETH- holding an asset with upside potential while earning blue chip (win-win).

Protocol: Phuture
Token: $PHTR

Staking APY is 3.98%, but PHTR has a market cap of $500,000, so there is plenty of upside potential.