Guide to Yield Farming on Arbitrum
We explore some of the yield farming platforms on Arbitrum.
Arbitrum is an Ethereum scaling solution based on optimistic rollups that caters for a trustless, secure and Ethereum Virtual Machine (EVM)-compatible Layer 2 (L2).
DefiLlama data currently tracking Arbitrum puts the current TVL on DeFi platforms on Arbitrum to be US$2.28B.
In this article, we explore some of the yield farming platforms on Arbitrum and where investors can provide liquidity for yield.
GMX
GMX is a decentralized spot and perpetual exchange that supports low swap fees and zero price impact trades. Trading is supported by a unique multi-asset pool that earns liquidity providers fees from market making, swap fees, leverage trading (spreads, funding fees & liquidations) and asset rebalancing.
Yield farming opportunity:
Users can provide liquidity to GLP, the liquidity provider token for GMX exchange. GLP holders can earn 70% of the platfrom's fees, which currently yields 23% APY.
Jones DAO
Jones DAO is a yield, strategy, and liquidity protocol for options, with vaults that enable 1-click access to institutional-grade options strategies while unlocking liquidity and capital efficiency for DeFi options with yield-bearing options-backed asset tokens.
Yield farming opportunity:
Deposit GLP constituent assets or GLP itself into the Leveraged Delta GLP Vault which employs Smart Leverage by borrowing from the Jones USDC vault to earn a leveraged return of up to 41.7% APY.
Radiant
Radiant aims to be the first omnichain money market atop LayerZero where users can deposit any major asset on any major chain and borrow various supported assets across multiple chains.
Yield farming opportunity:
Liquidity providers can provide liquidity into one of their lending pools for popular assets like USDC, DAI, ETH and WBTC and earn generous RDNT rewards, between 45% to 96% APY by looping the deposit and borrowing process.
Curve Finance
Curve is a multi-chain decentralized exchange liquidity pool designed for extremely efficient stablecoin trading.
Yield farming opportunity:
Provide liquidity to either the tricrypto (USDT/WETH/WBTC) pool for up to 26% APR in CRV tokens or other incentivized stablecoin pools like the 2pool (USDC/USDT), FRAXBP (FRAX/USDC) for a low-risk, low-rewards yield opportunity on Arbitrum.
Camelot
Camelot is an ecosystem-focused and community-driven DEX built on Arbitrum. It has been built as a highly efficient and customizable protocol, allowing both builders and users to leverage our custom infrastructure for deep, sustainable, and adaptable liquidity.
Yield farming opportunity:
Provide liquidity to their liquidity pools to earn swap fees and GRAIL tokens.
Balancer
Balancer is an automated portfolio manager, liquidity provider, and price sensor that empowers decentralized exchange and the automated portfolio management of tokens. Pools contain two or more tokens that traders can swap between while liquidity providers put their tokens in the pools in order to collect swap fees.
Yield farming opportunity:
Balancer on Arbitrum has wide array of liquidity pools, from stablecoins only (DAI/USDC/USDT) to more exotic ones with more than 4 tokens. Yields earn swap fees and BAL rewards can vary depending on the type of pool and it is controlled by weekly governance votes.
Beefy Finance
Beefy is a multi-chain yield optimizer that allows its users to earn compound interest on their crypto holdings. Vaults allow you stake your LP tokens and the strategy tied to the specific vault will automatically increase your deposited token amount by compounding reward tokens.
Yield farming opportunity:
Unlike the above, Beefy isn't strictly a yield farm itself, but it is a platform where you can automatically compound your LP tokens deposited on the above platforms to earn even more yield.
Yearn Finance
Yearn Finance is a suite of products in DeFi that provides yield generation, lending aggregation, and more on the blockchain, maintained by various independent developers and governed by YFI holders.
Their Vaults allow you stake your LP tokens and the strategy tied to the specific vault will automatically increase your deposited token amount by compounding reward tokens.
Yield farming opportunity:
Yearn Finance on Arbitrum supports Curve tricrypto LP tokens that automatically compounds your CRV rewards for more underlying tokens. The current yield is 7.8%. They also support the Curve MIM 3pool for 5.3% APY.
Conclusion
The above are just selected yield farming opportunities on Arbitrum. There are hundreds of protocols in the wild and more launching everyday with new, innovative mechanisms to push what's possible in DeFi.
Before depositing money in any of the protocols, always ensure that you've done your research and due diligence. Also read about the risks of yield farming.
When you're ready, you can pick up your racks and start being a farmer.
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