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DeFi Pools Convert Bitcoin HODLing to Earning Opportunities

DeFi Pools Designed to Minimize Loss and Maximize Returns

DeFi pools featured in this article are an exclusive assortment of $BTC pools tactically engineered to alleviate impermanent loss while acknowledging potential exposure if the paired asset deviates from its peg. These pools offer appealing yields of 10% or higher, providing a lucrative opportunity for staking your Bitcoin. Each highlighted pool maintains a minimum Total Value Locked (TVL) of $50k, with a focus on those surpassing the 10% threshold for the 30-day average yield.

Defi Pool

1. Orca WBTC-TBTC on Solana

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  • Pool Metrics: 46% 30D Avg APY (9.53% 1D APY) and $208k TVL
  • Protocol: Orca stands as the largest and most popular decentralized exchange platform on Solana, a Layer 1 blockchain.
  • Token: tBTC is backed 1:1 by BTC locked through the Threshold bridge, secured by Threshold’s network of node operators.
  • Strategy: The pool generates yield through trading/swapping fees.
  • Risk: tBTC faces vulnerabilities related to the Threshold Bridge and the Portal (Wormhole) bridge. Wormhole experienced an exploit resulting in a $320 million loss last year, although efforts were made to recover the missing funds. The pool’s APR is consistently diluted as liquidity increases, as indicated by the provided chart.

2. Autofarm beltBTC on Heco Chain

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  • Pool Metrics: 22.04% 30D Avg APY and $67k TVL
  • Protocol: Similar to the renowned DeFi platform Beefy, AutoFarm Vaults functions as a multi-chain yield optimizer platform aiming to offer DeFi users auto-compounded yields at empirically optimal intervals. AutoFarm Vaults achieves this while minimizing gas costs by utilizing extensively tested smart contract code and high-caliber yield optimizing strategies.
  • The underlying pool originates from Belt.fi, a stableswap AMM protocol optimizing yield across BNB Chain, HECO Chain, and Klaytn while maintaining low fees/slippage. It offers aggregation via compounding, lending, and yield generation for maximum returns.
  • Strategy: The pool’s strategy involves compounding HBTC from Belt.fi. HBTC represents a wrapped BTC version on the Heco chain. The pool generates yield in the form of beltBTC through interest fees from various lending & borrowing protocols.
  • Risk: Some beltHBTC may be stuck as collateral on Lendhub, a protocol hacked earlier this year. The pool also faces low liquidity.

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Note: Alternatively, you can invest via Belt.fi platform to bypass Autofarm fees. Allowing them to automatically compound your investments may lead to higher investment yields.

3. Merkl WBTC-TBTC on Arbitrum

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  • Pool Metrics: 21% 30D Avg APY (16% 1D APY) and $762k TVL
  • Protocol: Merkl operates as an incentive mechanism for concentrated liquidity, employing a unique approach where liquidity providers receive rewards based on their liquidity utilization. Notably, it avoids introducing extra risk as funds remain within Automated Market Makers (AMMs). The distribution of rewards follows a customizable formula set by the entity incentivizing the pool.
  • The underlying pool originates from Uniswap, the most popular decentralized exchange. If you prefer not dealing with regular monitoring and management to maintain a competitive LP price range, you have the option to invest using Gamma or Range. Both protocols specialize in diverse market-making and automated liquidity management strategies.
  • Strategy: The pool generates yield through trading fees.
  • Risk: Similar to the Orca pool, this pool with tBTC carries the inherent risks associated with the Threshold Bridge and the Portal (Wormhole) bridge. Wormhole experienced an exploit last year, leading to a loss of $320 million, although efforts were made to recover the missing funds. It’s crucial to be aware of and consider these potential vulnerabilities when participating in this pool.

4. Bella Protocol HBTC on Ethereum

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  • Pool Metrics: 15% 30D Avg APY (18% 1D APY) and $313k TVL
  • Protocol: Bella Protocol offers an auto-compounding yield aggregator and quantitative analysis tools for liquidity providers on Curve, Uniswap, and other AMM DEXs
  • Strategy: The investment pool is placed in Bella’s Flex Savings, a smart yield aggregator allowing users to earn yield from providing liquidity on Curve. By depositing HBTC, users can earn rewards in their native token. Bella Flex Savings automates yield compounding, reduces gas fees, and offers additional incentives for users.
  • Risk: All rewards are in $BEL tokens, the value of which could decrease.

5. Sommelier Real Yield WBTC on Ethereum

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  • Pool Metrics: 15% 30D Avg APY (8.41% 1D APY) and $10.72m TVL
  • Protocol: Sommelier Finance is a yield aggregator aiming to generate real yields on prominent crypto assets such as BTC and ETH. To gain a deeper understanding, readers are encouraged to explore Sommelier’s documentation.
  • Strategy: The primary objective of the Real Yield BTC vault is to offer sustainable yields denominated in WBTC through a flexible and adaptive range of strategies. Initially, the vault will utilize Morpho for efficient leveraged ETH staking backed by WBTC collateral. It may also consider borrowing ETH to deposit into Real Yield ETH. Additionally, there’s potential for Real Yield BTC to expand its capabilities by integrating other protocols or utilizing Sommelier vaults in the future. This dynamic approach aims to optimize yields for users. As mentioned on the website, the yield comprises $SOMM tokens and interest fees.
  • Risk: The vault’s risk profile involves exposure to several protocols, including Morpho, AAVE, and Uniswap V3. While these protocols are reputable, they remain susceptible to smart contract bugs and exploitation, potentially leading to fund loss. It’s crucial to note that this pool operates on Ethereum, where high gas fees can impact transaction costs and profitability.

6. Yearn Finance (Curve TriCryptoUSDT) CRVUSDTWBTCWETH on Ethereum

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  • Pool Metrics: 12% 30D Avg APY (9.73% 1D APY) and $782k TVL
  • Protocol: Yearn Finance is among the earliest and most reputable DeFi protocols, focused on yield optimization, lending aggregation, yield generation, and insurance within the Ethereum network.
  • The underlying pool originates from Curve, a well-established stableswap protocol and the second-largest DEX in terms of Total Value Locked (TVL).
  • Strategy: The pool generates yield through CRV emissions and trading fees.
  • Risk: Besides exposure to CRV, USDT, and WETH, this pool also carries risks associated with the Curve protocol. Curve experienced an exploit in August 2023, unrelated to its smart contract code but resulting from the use of third-party applications. Additionally, considering this pool operates on Ethereum, high gas fees can impact overall costs.

Prior to investing in these pools, conducting thorough research and due diligence is crucial. Being aware of the risks involved is paramount. Base investment decisions on individual financial circumstances and risk tolerance to make well-informed choices.


Conclusion:

As you explore the potential of DeFi pools to enhance your cryptocurrency portfolio, consider the essential role of robust mining equipment in maximizing your returns. Mining Store Australia offers state-of-the-art Bitcoin mining machines and comprehensive ASIC mining solutions that ensure efficiency and profitability. Harness the power of top-tier technology with our offerings, including the latest models designed to optimize your mining operations. Visit Mining Store today to take your crypto endeavors to new heights.

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