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DeFiLlama Launches Strategy Finder For Better DeFi Yield Farming Opportunities

2 mins
Updated by Kyle Baird
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In Brief

  • New product uses platform's huge database.
  • It searches for leverage and arbitrage opportunities.
  • DeFi TVL down 71% from ATH.
  • promo

Decentralized finance (DeFi) data platform DeFiLlama has launched a new product to enable token farmers to find better yield farming opportunities.

On Oct. 23, DeFiLlama announced a product that it has been working on for months – Delta Neutral Yields.

The system leverages the platform’s large database to seek out opportunities where users can borrow tokens to farm with them. With the new system, it claims that yields greater than 20% are attainable with BTC, ETH, and USDC.

DeFiLlama offers the strategy finder for free on its website. However, the caveat is that many of the suggested tokens have low liquidity and potential associated risks.

Leveraging and arbitraging

DeFiLlama offered a few examples of how its new strategy finder works. One was leveraged farming with Avalanche staking whereby BTC.b (BTC bridged to Avalanche) is deposited on Aave to borrow AVAX, which is staked to produce sAVAX. This is deposited back to Aave to borrow even more and leverage the position yielding as much as 22% APY.

Another strategy suggested was to arbitrage against a yield generator. Users can supply Ethereum to borrow DAI and then deposit into Reaper Farm for around 16% returns.

DeFiLlama said there were thousands of similar strategies allowing users to maintain exposure to the original assets while farming higher yields provided by other tokens. However, these are not ‘set and forget’ farms. It added:

“They all require active management to ensure the health ratio of your loan stays above water, the final APY of your position is good.”

The platform also has a project filter for those who do not want exposure to DeFi protocols that they consider dubious.

The DeFi data portal has been expanding its offerings this year with new data sets and tools for token farmers.

DeFi ecosystem outlook

The DeFi ecosystem has taken a beating along with the wider crypto market declines in 2022. A slumping total value locked is a direct result of falling asset prices and users withdrawing collateral to sell it.

TVL has tanked 71% from its peak levels of over $210 billion in late December 2021. It is currently around $61 billion, which includes staking.

The ecosystem has mirrored the crypto market cap for the last four months with low volatility and sideways momentum. DeFi protocols are unlikely to see any collateral increases until markets recover. MakerDAO is the industry leader at the moment with $7.7 billion TVL and a 12.7% market share.

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Martin Young
Martin Young is a seasoned cryptocurrency journalist and editor with over 7 years of experience covering the latest news and trends in the digital asset space. He is passionate about making complex blockchain, fintech, and macroeconomics concepts understandable for mainstream audiences.   Martin has been featured in top finance, technology, and crypto publications including BeInCrypto, CoinTelegraph, NewsBTC, FX Empire, and Asia Times. His articles provide an in-depth analysis of...
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