Guide to Yield Farming on Optimism

We explore some of the yield farming platforms on Optimism and where investors can provide liquidity for yield.

Guide to Yield Farming on Optimism

Optimism is an Ethereum scaling solution based on optimistic rollups that caters for a trustless, secure and Ethereum Virtual Machine (EVM)-compatible Layer 2 (L2).

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Optimism is rumoured to launch its token very soon. Yield farming and interacting with protocols on Optimism might potentially reward you with a retrospective airdrop.

DefiLlama data currently tracking Optimism puts the current TVL on DeFi platforms on Optimism to be US$532m.

Optimism TVL. Source: DeFiLlama

In this article, we explore some of the yield farming platforms on Optimism and where investors can provide liquidity for yield.

Lyra

Lyra is an options trading protocol accessing the scalability of Layer 2 Ethereum to provide a robust, lightning-fast and reliable trading experience.

Yield farming opportunity:

Lyra offers an Earn program where users can earn yield and rewards by providing liquidity to a variety of incentivised pools. Users can deposit sUSD to Lyra's market pools to earn yield and LYRA rewards (20% to 40% APR) while collateralising the protocol. Users can also deposit USDC into the staking module to earn LYRA tokens (11% APR).

Perpetual Protocol

Perpetual Protocol is an on-chain perpetual futures decentralized exchange with deep liquidity and builder-ready composability. Users can earn a yield on your capital by becoming a liquidity provider.

Yield farming opportunity:

Perpetual Protocol Curie allows market makers and liquidity providers to provide liquidity in a specified price range on Uniswap V3 for takers to trade against. Liquidity providers can earn PERP rewards ranging from 3% to 250% APR depending on their liquidity contribution.

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 a single USDC stablecoin liquidity pool on Optimism. Liquidity providers can stake the SLP tokens in the Farming tab for STG rewards. Yields are around 5% APR.

Pika Protocol

Pika Protocol is a decentralized perpetuals swap exchange on Ethereum layer 2 with support up to 50x leverage, deep liquidity and composability across DeFi.

Yield farming opportunity:

Pika has a USDC Vault where depositors can stake USDC and take the opposite position of all traders on the platform. The yield on the Vault comes from an estimation of fees reward as well as potentially any retrospective airdrop done when the PIKA token is launched.

Conclusion

The above are just selected yield farming opportunities on Optimism. 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.

Risks of yield farming
Many newbies fall into the trap of depositing into the highest return pools with APY rates that go into the hundreds or thousands. In this article, we evaluate the risks of yield farming in detail.

When you're ready, you can pick up your racks and start being a farmer.

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