shivsak Profile picture
Jul 11 β€’ 15 tweets β€’ 3 min read
Liquidity Pools typically have higher APR than single-sided yield through lending or staking.

But the risks are also much higher...

Here are the dangers of LP yield farming in a bear market πŸ‘‡ 🧡
1. Bear market LP yields are much lower.

This is because:

β€’ reward tokens are 1/10 the price they used to be.

β€’ trading volume ↓ so trading fees also ↓
2. Impermanent Loss still exists…
3. High-APR LPs require you to hold riskier assets

Even large caps like BTC and ETH are bleeding terribly.

Everything else is getting absolutely destroyed.
Most alts underperform ETH even in bullish times.

In a bear market, alts may go down 80% just because ETH had a bad weekend.

And there aren't enough altcoin buyers with conviction to bring altcoin prices back up once they fall.

4. Unwinding leverage can cause violent price swings.

This makes borrowing or leveraged strategies even riskier.

And it also increases your Impermanent Loss risk.
5. The APR you're getting is not what you think it is

6. No more Ponzi yields

In a bull market, you can farm for yield even on ponzi farms.

But in the bear market, protocols are collapsing every day, and you don't want to have anything to do with the ponzi farms.
The bear market separates sustainable farms from unsustainable ones.

95% of DeFi yields are unsustainable.

I've written before about this.
When the ponzis disappear, and you're only left with 5% APR, it's hard to get very excited.

But if you're still set on earning yield without as much risk...

Single-sided staking / lending strategies on reputable protocols is probably your best bet.
If you're more adventurous, you can also try:

β€’ Low or no IL yield farms (transient, usually not worth it)

β€’ Option vaults (only if you understand them)
Adjust your strategies to fit the market conditions.

Personally, I'm finding the yield opportunities to be quite sparse right now, so I'm focused on building and protecting my downside, rather than trying to squeeze out an extra few %
If you found this thread helpful, follow me @shivsakhuja for more.

Would also greatly appreciate ❀️ / ♻️ on the original post.
I'm curious - what's your yield strategy for the bear?

β€’ β€’ β€’

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More from @shivsakhuja

Jul 9
Creating an overly complicated Tokenomics model is like hitting a trick shot in pool.

Sure - it’s really cool when it works out.

99.999% can't actually pull it off successfully.

And they end up looking like this.
A simple tokenomics model is much easier to achieve.

Better to have a simple model that works than a cool one that doesn't.

You don't get any extra points for how cool it looks.
Read 4 tweets
Jul 7
Most people in Crypto believe Bitcoin is "up only" in the long term.

Nearly everyone thinks we'll see $100k+ in 5 years.

But it's important to question the assumptions we take for granted.

So I tried to explore all the BTC narratives.


"The Many Faces of BTC"

πŸ‘‡ 🧡
I'll explore the following.

Bitcoin as...
β€’ a store of value
β€’ an inflation hedge
β€’ a global reserve currency
β€’ the native currency of the internet
β€’ a p2p payments network
β€’ a safe haven from govt. failures
β€’ a base-layer blockchain
β€’ an asymmetric risk investment
Btw, you can also find this thread as a blog post on @0x_illuminati at…
Read 58 tweets
Jun 23
Hitchhiker's Guide to DeFi πŸ‘‡

An illustrated tour of the world of decentralized finance...

[1/x] 🧡
You can also find this thread as a blog post on @0x_illuminati…
@0x_illuminati Welcome to DeFi.

The goal is open access to decentralized financial services for everyone in the world.
Read 49 tweets
Jun 21
Is crypto going to 0?

Let's explore what could kill crypto.

πŸ‘‡ 🧡 [1/x]
You can also find this thread as a blog post on @0x_illuminati at…
@0x_illuminati The last couple of months have been BRUTAL for anyone invested in crypto.

In a bull market, there's an endless parade of moonboys predicting $1M BTC.

In a bear market, there are just as many doomsdayers calling for $0 BTC.
Read 29 tweets
Jun 18
US Fed (fully-doxxed team) increased their token supply in 2020-21.

They printed LOTS of their native token "USD" in 2020-21.

Then they distributed these inflationary rewards to the community through:

β€’ airdrops: "stimulus checks"
β€’ borrowing rewards: "PPP loans"
Now, inflationary rewards may feel good at the time, but they are dangerous.

Too much inflation and the community (citizens) gets fucked as their tokens become worth less in real terms.
(purchasing power ↓)

Turns out we got to that "too much inflation point".

Recently, inflation was the highest it's been in over 40 years.
Read 8 tweets
Jun 16
web2 vs web3


🧡 πŸ‘‡
web2 = centralized

web3 = decentralized
web2 = high % take-rates for platform

web3 = low % take-rates for platform
Read 11 tweets

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