Yield farming was the defi craze of the summer of 2020, taking the emerging industry by storm and ushering in new ways to distribute tokens, engage communities and amplify network effects. After a spike in October, when yield farms helped drive Ethereum grid fees to record highs, the yield farming craze eased somewhat due to saturation and reduced project quality.
Despite the dip, there is still almost $ 15 billion locked up in various DeFi protocols, many of which are dedicated to agricultural activities. Clearly, farming is an idea that has stuck and as the year goes on, a second wave of farming has sprung up. Rather than being food-themed, the new platforms have a longer lifespan and solve real problems in decentralized financing, unlocking liquidity, and turning unused assets into money-generating tokens.
Here are five farms to watch out for in early 2021.
Warp unlocks additional value of Uniswap Liquidity Supply (LP) tokens. After locking Uniswap LP tokens in Warp as collateral, users will receive a stablecoin loan. This stablecoin loan can be reincorporated into yield farming protocols, returning LP token collateral after repayment of the loan. An advantage of Warp is that liquidity providers can increase their liquidity provision while still earning the 0.3% fees that Uniswap offers for generating liquidity pools. In addition, Warp allows users to get more leverage for yield farming.
Warp launched December 9, allowing farmers to earn Warp Tokens ($ WARP). These are granted retroactively over a period of six months. Warp really gets into gear in January, when its TGE kicks off. After that, users earn tokens for receiving loans and providing stablecoins. Only $ 150,000 WARP is being minted, which creates a strong demand for earning the assets through stake, loan and borrowing. Users can also earn Non-Replaceable Tokens (NFTs) to increase their Locked Total Value (TVL) for earning $ WARP. As of December 15, 6 days after the platform’s launch, Warp has a TVL of $ 16.28 million USD.
Badger.finance is on a mission to increase the amount of BTC represented on Ethereum and the number of ways it can be used. The project, which is only two weeks old, has been phenomenally successful in that regard. Nearly 11,000 BTC, worth over $ 200 million, is locked in the Badger protocol, where farmers can earn DAS rewards. The initial token distribution is scheduled for eight weeks, making the project run in 2021 – and that’s just the first phase.
The next stage of Badger DAO’s evolution will see the introduction of SETT, a rebasing token linked to bitcoin’s price. Y-asset strikers like yCRVWBTC, as well as BADGER / WBTC LPs will soon be able to earn SETT tokens – which can also be retroactively awarded to current strikers. While bitcoin has shut down 2020 by tantalizingly getting close to $ 20K, the BADGER token has followed suit and surged past $ 12. Badger DAO is a yield farm that still has a lot to offer.
KeeperDAO provides backstop liquidity for on-chain loans and synthetic asset protocols. It also provides a way to generate returns by providing liquidity, if you know what you are doing. The current rewards program will run until February 2021 and will provide generous incentives to provide liquidity in the form of ETH, WETH, USDC, renBTC and DAI. 1 million SMOKE Tokens will eventually be awarded, with APYs ranging from 17-25%.
That’s good for putting out individual assets without the risk of temporary loss. With just over 10% of the ROOK stock to date, it’s no wonder that tokens are trading at a premium. Farm them if you can. Buy them if you dare.
While the other projects on this list have already started, Frax has yet to go live – giving aspiring farmers a chance to enter the ground floor. Frax is a fractional algorithmic stablecoin, putting it in the same position as projects such as ESD and DSD.
Frax.Finance is currently running on the Ethereum testnet and has a strong team behind it and an original concept for stablecoin issuance and price balancing. V2 from Frax will introduce a bond token known as FXS that will allow users to acquire Frax debt, but otherwise little is known about one of the most highly anticipated harvest farms of 2021.
One of next year’s largest farms was also one this year. SushiSwap made headlines for all the right reasons, emerging as Uniswap’s biggest competitor, before attracting attention for the wrong reasons after the pseudonymous Sushi Chef left the project under a cloud. SushiSwap is now a reborn project, flying the Yearn banner and with a range of new products in the works, including BentoBox.
Meanwhile, SushiSwap continues to issue SUSHI rewards for liquidity providers. And since the project’s native token is up 183% in the last month, now is a great time to start editing SUSHI. Expect SushiSwap to continue to innovate at a dizzying pace in 2021 – and possibly flip UNI.
With so many emerging farms to choose from, 2021 promises to be a prosperous year for farmers with modest yields.