Guide to Yield Farming on Optimism
We explore some of the yield farming platforms on Optimism.
Optimism is an Ethereum scaling solution based on optimistic rollups that cater for a trustless, secure Ethereum Virtual Machine (EVM)-compatible Layer 2 (L2).
DefiLlama data currently tracking Optimism puts the current TVL on DeFi platforms on Optimism to be US$949m.
In this article, we explore some of the yield farming platforms on Optimism and where investors can provide liquidity for yield.
Velodrome
Velodrome is a new AMM based on Solidly and launched on Optimism. Velodrome has made several improvements to the Solidly codebase such as trying rewards to emissions, ensuring productive gauges and providing white-glove support. It is currently the top DEX on Optimism with US$280m TVL.
Yield farming opportunity:
Beethoven X
Beethoven is another AMM built on Balancer V2. It offers various liquidity pools for users to trade, from Weighted and Boosted Pools to LBPs, Beethoven X offers a suite of unique financial primitives.
Yield farming opportunity:
Provide liquidity to one of their liquidity pools under the Invest tab and earn swap fees and BEETS rewards. The current yield ranges from 10% to 80% APR although yields vary by token and risk.
Sonne Finance
Sonne Finance is a decentralized lending protocol for individuals, institutions and protocols to access financial services. It is a permissionless and open-source platform on Optimism. Users can deposit their assets, use them as collateral and borrow against them.
Yield farming opportunity:
Lend crypto assets to Sonne Finance and borrow against them to earn SONNE tokens. SONNE tokens may be further staked for a staking APR of 19% to obtain both OP and VELO rewards.
Lyra
Lyra is a decentralized options trading protocol on Layer 2 Ethereum to provide a robust, lightning-fast and reliable trading experience.
Yield farming opportunity:
Deposit into their Earn Vaults and earn trading fees, collect bid-ask spreads and aim to generate market-neutral returns with automated delta hedging. Your funds will be used for making options markets on your asset, and yields can range from between 8% to 11% APY.
Stargate Finance
Stargate is a fully composable liquidity transport protocol that lives at the heart of Omnichain DeFi. With Stargate, users and dApps can transfer native assets cross-chain while accessing the protocol’s unified liquidity pools with instant guaranteed finality.
Yield farming opportunity:
Stargate has multiple yield farming options on the Farm page from USDC and ETH to more exotic tokens like sUSD and FRAX on Optimism where users can earn a yield for depositing their crypto. Yields range from a meagre 2% for ETH to as high as 9% on FRAX.
Conclusion
The above are just selected yield farming opportunities on Optimism. There are hundreds of protocols in the wild and more launching every day 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.
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