The most profitable narrative in the bear market:

"Real Yield."

But what is it and how does it work?

Here's a Breakdown and 7 Protocols that Fit the Criteria:

(including a few hidden gems)
Most DeFi projects incentivize liquidity by providing inflationary tokens as rewards.

People LOVED it!

"If I provide ETH - USDC in a liquidity pool, I get X token at 200% APR!"

So projects could bootstrap growth this way.
The Race Against Time

This buys time to create more revenue-generating products.


1) The system fails if they keep printing tokens, but there's not enough value generated.

2) These users ain't loyal. Once incentives lower, they rotate to the next bright shiny DEX.
Worthless Tokens

If you combine high token emissions with low revenue, then token prices may fall.

They were expecting 💎 tokens but they got 💩 instead.

So DeFi users are waking up to this.

If protocols can generate free cash flow, we want a piece of it.

No more Fugazi.
The Real Yield Checklist:

What qualifies as a real yield protocol?

1) There's product/market fit.

People are using the protocol regardless of market conditions or token incentives.

2) The Protocol generates on-chain revenue through its products.
3) Revenue > Operating Expenses + Token Emissions.

SOME Token emissions is fine as long as revenue is higher.

4) Are they paying in sound money? The most popular choices are ETH and stablecoins.

Here are 7 Protocols that Qualify:
#1. BTRFLY (Redacted Cartel)

BTRFLY has launched its V2.

They're transforming from a bond-centric, dilutive model toward real yield.

Lock BTRFLY for rlBTRFLY (revenue locked) to earn revenue distributed in ETH

The Yield is from their treasury and product ecosystem.
#2. Gains Network on Polygon Matic

A decentralized leveraged trading platform.

It offers up to 150x leverage on crypto, stocks, and forex.

Currently, they offer DAI Vaults and GNS-Dai LP's

Single Side GNS Staking is Coming soon

#3. Umami (Arbitrum)

1) Deposit your UMAMI for mUMAMI.

Earn steady passive income in WETH from Umami's protocol / treasury revenue.

~5% APR.

You can earn more yield via compounding with mUmami.
2) GLP / TCR USDC Pool

Est APR ~20%.

I know, 20% on stablecoins is triggering your PTSD.

1. It mints GLP to collect fees from GMX.

2. It hedges market volatility with non-liquidatable hedges from TracerDao.

Unfortunately, the pools are full at the moment due to demand.
#4. Kujira (Cosmos Layer 1)

Kujira has several products:

• Orca - Buy assets at a discounted price via liquidations

• Fin - Decentralized orderbook-style exchange

• Blue - The Core of the ecosystem

• $USK - decentralized stablecoin
The Yield Source

Stake KUJI to earn a part of Kujira's revenue.

Right now it's paying .49% APR,

The swap fees produced are real revenue that accrues to KUJI stakers

APR should increase as adoption increases and more dapps launch on Kujira.
#5. Trader Joe (Avalanche)

The #1 DEX on Avalanche.

Stake JOE into sJOE and earn Stablecoin rewards - 'USDC'
The Yield Source:

Trader Joe charges a 0.05% fee on every swap.

This is converted into a Stablecoin and then distributed to the sJOE Pool every 24 hours.
#6. Synthetix (Ethereum / Optimism)

One of the most impressive dapps in DeFi - a true innovator.

You can create synthetic assets, and trade real-world assets on-chain via Kentra.

Assets include crypto, forex, precious metals, etc.
Stake SNX

You'll earn

1. sUSD from traders (Kwenta futures, lyra options, etc)

sUSD is their native stablecoin

2. SNX inflationary rewards.
#7. GMX (Arbitrum / Avax)

A Decentralized Perp Exchange with up to 30x leverage.

1) They take a 30% fees from swaps and leverage trading.

2) It's converted to ETH / AVAX and distributed to staked GMX tokens.
Strong Tailwinds

GMX has been the talk of the town during the bear market, and for good reason.

It's the #1 dapp on Arbitrum, and adoption keeps picking up.
Research Tools

• TokenTerminal / CryptoFees - Find Revenue

• Dune Analytics - There are some great dashboards for protocols like GMX and Gains

• Messari - Token Supply Information

• Protocol Data - Look for internal dashboards from the protocols.
Questions to Ask:

• Where is the yield coming from?

• How much revenue does the protocol generate?

• What is the native token supply and emissions?

• What tokens are they paying the shared revenue in?

• What is the overall base network traction?
"Ser, you're missing X protocol"

I don't mean to fade your bags.

This is not meant to be a complete listing.

If something's missing either:

1) Tiny market cap
2) Too many emissions
3) I don't know about it (It happens)
4) I don't like it (DYDX banning Tornado Cash users)
The Risks

1) Some of the protocols may be labeled security due to the revenue-sharing model.

Jurisdictions may start trying to regulate them.

2) Quite a few of these are based on financial engineering such as perps and options.
And finally, this narrative has been going on for a few months.

GMX has gone up 3x in the past few weeks, there may be a pullback.

Fortunately, I don't think this is a "metagame", but rather a fundamental shift going forward in DeFi.

These protocols have legs.
Additional View Point

My friend @milesdeutscher wrote a great thread earlier this week.

It's always good to see a different perspective on the same topic.

(That feel when you're writing a thread, and someone else publishes it first 😩)


I have small positions in GMX, GNS, Umami, and Kujira.

I'm sharing for transparency reasons.

Don't buy something because I bought it.

This is an educational thread, and not meant to entice you to buy anything.

Please do your own research.
If you enjoyed this thread, then I'm sure you'll enjoy my free weekly newsletter.

I share some insights exclusively via email.

Sign up to if you haven't yet.

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Edgy - The DeFi Edge 🗡️

Edgy - The DeFi Edge 🗡️ Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @thedefiedge

Aug 7
If Crypto has ever affected your Mental Health, read this:

I'm not a medical professional.

I don't have all the answers to this complicated subject.

I'm sharing my story and what has worked for me.

10+ different doctors and therapists gave me feedback on this thread before publishing.
Mental Health Crisis

The world is going through a mental health crisis.

Some Stats from USA:

• 2.5 million youth have SEVERE depression

• Alcohol-related deaths jumped 25.5% between 2019 -> 2020.

• Over half of adults with a mental illness don't receive any treatment
Read 46 tweets
Aug 4
Unpopular Opinion:

It's ok to have your money doing nothing.

• I have some cash sitting in a checking account.
• I have some BTC / ETH that's NOT earning yield.

I am aware of inflation.

Instead of thinking of it as doing nothing - I think of it as playing defense.
You don't have to earn a yield on EVERYTHING.

That thinking led people to put their BTC on Celsius or their savings on Anchor Protocol.

And then losing everything.

I like to diversify.

Some of my ETH is in cold storage.
Some are in DeFi as stETH.
I think about my money like soldiers.

• Some soldiers are on offense - they're being invested or earning yield.

• Some soldiers are on the defense - it's there for protection.

Also one more thing about yields...
Read 4 tweets
Jul 30
Doing your own research is the most powerful Edge in Crypto.

But most people suck at research.

Here are my Crypto research frameworks to make it easy:

(so you don't have to rely on influencers)
A Framework for Research

Researching crypto is overwhelming.

Where do you even begin?

My approach is to break it down into 4 broad areas:

• Technical Understanding
• Profit Skills
• Crypto Skills
• and Areas Outside Crypto

Let's dive into it!
AREA 1: Technical Understanding

You have to know what you're investing in.

You can't see the value of Starknet if you don't know what ZK-Rollups are.

Understand your experience level, and realize there are skills for each level.

It's kinda like skill trees in RPGs.
Read 40 tweets
Jul 23
The 10 must-have Crypto research tools I use every day:

(most are free)
Uniwhale (Analytics dashboard)

I use this to track bridge activity across different layer 1s.

Polygon (MATIC) has been on a roll lately.

I can use UniWhale to look at the deposits + withdrawals and get a bigger picture of Layer 1 trends.
Dune Analytics (Analytics Dashboards)

Dune lets you visualize different metrics into easy-to-understand charts.

Everything from DeFi usage down to dapp-specific dashboards.

I invest in GMX and found a dashboard that helps me see important indicators.
Read 19 tweets
Jul 15
Warren Buffett & Charlie Munger used mental models as an edge to become the greatest investors in history.

There are hundreds of mental models.

I found 14 that will help you become a better Crypto Investor:

(including common investing traps)
What is a Mental Model?

Mental models are concepts to help us better understand the world.

Your thinking is limited by your own experiences & biases - Mental models are a way to gain wisdom from entire fields.

Understanding them will help you think clearer.
/1 Cockroach Theory

When there's bad news, there might be many more negative events that are coming.

Seeing one cockroach means that there's more hiding.

If a company shares bad news, remember that they're often hiding more bad things to buy time.

(Like Celsius did)
Read 33 tweets
Jul 15
Tea > Coffee

• Consistent energy.
• Huge variety of flavors.
• No caffeine crash in the afternoon.
• Calm energy due to the L-Theanine.
My favorite teas:

• Earl Grey
• Yerba Mate
• Genmai Cha
• Masala Chai
• Japanese Matcha
• Chinese Black Dragon Pearls

I buy from a site called "Adagio Teas"
Good matcha is hard to find and expensive.

Be careful of the stuff you see on Amazon.

I buy from…
Read 4 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!


0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy


3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!