Cryptocurrency expert who goes by @hansolar21 on Twitter has analyzed data about safety, profitability and sustainability of 5,510 yield farming instruments (liquidity pools) across all major smart contract platforms. Here are his top picks.
Seeking best and safest yield on DefiLlama
According to a thread shared by @hansolar21 on Twitter yesterday, on Oct. 28, 2022, through ML instruments and big data analytics tools, he scanned thousands of protocols designed for "yield farming" (getting rewards for providing cryptocurrency liquidity to on-chain exchange systems). Data was provided through the API of the top-tier DeFi tracker DefiLlama.
🧵🧵🧵APY🧵🧵🧵— HanSolar.eth (@hansolar21) October 28, 2022
I spent my afternoon combing through 5,510 sources of yield data from @DefiLlama so you won't have to🤓
Aim : find a safe stable yield farm to park $100k
I used *base yield* and not the combined yield to look for protocols that offer #realyield pic.twitter.com/AavV0SOFDj
He decided to experiment with a hypothetical $100,000 deposit: as such, only sustainable pools with over $400,000 in total value locked (TVL) were included in the analysis.
Out of the initial pool of 5,510 protocols, only 327 were "confident" and offering annualized yields of over 5% (which can be easily found in risk-free centralized and decentralized passive income machines). Only 130 protocols were of an appropriate size for injecting $100,000 in equivalent right now.
The majority of interesting opportunities for @hansolar21 run on top of the Ethereum (ETH) blockchain: Badger DAO, SushiSwap, Angle, Goldfinch protocols; while on Ethereum's L2, Optimism options with the LYRA token also looked impressive to him.
Meanwhile, the on-chain derivatives platform GMX was highlighted by the analyst as the top pick: both Arbitrum- and Avalanche-based pools of GMX are offering 15-20% on the GLP token.
Sad but true: No attractive yield farming outside top league
On Polygon, veteran DeFi Kyber Network offered the best rates for safe yield farming, while multi-protocol platform Tetu offers a 20% yield on the BTC-USDC pool. Friktion Labs, Frakt and Credix Finance were the leaders of Solana's segment.
Also, Avalanche's oldest DeFi Trader Joe looks good to the expert for AVAX liquidity. Other opportunities looked either too risky or too unsustainable to him:
Everything else is either ephemeral, unstable, too low, too small, imminently ruggable, not actually yield
He added that other overhyped smart contract platforms — including the likes of BSC, Polkadot, Fantom, Cronos, Karura, Kusama, Moonriver and Ontology — look disappointing when it comes to yield farming alternatives.