Have a few question’s about yield farming in general but i will be using pancakeswap i think (open to other suggestions)
So i am planning on yield farming with cake/usdc pair for 40% but the questions i have are
How are trading fee for the lps paid ?
Is it worth doing with $200 – 300 ?
Is yield farming in a bear market smart ?
Are there any better platforms/dexs for this
Finally are there better methods for bear market income ?
6 thoughts on “yield farming question’s”
beefy.finance is the biggest and most legit platform. They never have been hacked and are active since many years. Only choose Stablecoin pairs (Not Stablecoins + x, but Stablecoin+Stablecoin) unless you understand what Impermanent Loss Means.
Don’t take Dogy Stablecoins, make sure it never lost its peg!
(Not investment advice, a yield aggregator like beefy also is an additional layer of risk, please don’t use it with money you can’t lose)
Step 1: Be a skeptic of anything offering a double digit return. That is crème de la crème of any investment opportunity us regular folk can participate in and question “why does this opportunity seem so good?”
Step 2: Realize that cake is a shitcoin and your promised APY is sadly just a dilution of your investment.
I guess, if you were to attempt what is almost certainly a money losing strategy, your best bet would be to make that accumulation of inflated coins during a bear market, hope the project doesn’t rug, and sell into the next bull. It takes extraordinary timing.
Inside a liquidity pool your rewards are being constantly picked off by JIT liquidity providers, MEV extractors while you are taking on excess Gamma risk. If you don’t know what any of those words mean don’t use an AMM.
Asking questions is good but you must DYOR. All of these questions are google-able. I’m being sincere because getting advice from randos is not a good idea. It’s easy to lie and deceive.
You should be doing hours of research before you get into something. Defi products are far more complex than tradfi and on top of that, they are not insured and ran by code that can be unaudited, bad, and manipulated if they are upgradeable with no governance.
Always read the documentation, and reread it until you understand it. You shouldn’t have any questions on how a protocol works if you put any value into it. Pancake swap docs will answer everything you need to know about adding liquidity and how it works. If a protocol documentation doesn’t explain it good enough for you to understand, either ignore it and don’t use the protocol or learn why you don’t understand it, or ask questions in their discords
Don’t rush, take your time, understand the math, run spreadsheets.
**1. How are trading fee for the lps paid ?**
LPs are paid directly to the pool – i.e the pool gets bigger. If you farm, you get LP tokens which represent a share of the pool so your share gets bigger.
**2. Is it worth doing with $200 – 300 ?**
Since you are going onto Pancakeswap (BSC Chain), it wouldn’t be too bad but the returns may be too small you won’t even care about it.
**3. Is yield farming in a bear market smart?**
Yield farming exposes you into impermanent loss problems where the general value of your assets may be devalued since it’s a long facing investment.
**4. Are there any better platforms/dexs for this**
For DeFi, I would suggest GMX’s GLP – the liquidity pool of the biggest decentralized derivatives exchange. GLP not only gives you 70% of the fees on GMX but also profits earned from traders who lose against the exchange.
For CeFi, I would suggest Flynt Finance ([https://flynt.finance](https://flynt.finance)) as they are providing 60% on BTC, 20% on ETH and USDC at the moment.
**5. Are there better methods for bear market income?**
Flynt’s BTC and ETH strategies are best for bear markets as they are selling call options (right to buy an asset) so it is a downward facing strategy
>How are trading fee for the lps paid
Usually they’re getting directly reinvested into your total deposit. That’s because Uniswap v2 worked this way and most of DeFi is copy+pasted from Uniswap v2.
Uniswap v3, however, leaves them in a separate place, where you can claim them via an extra transaction. This led the new version of Trader Joe, as well as Quickswap v3 to work the same way.
So it depends on what DeFi product you’re using.
>Is it worth doing with $200 – 300 ?
At the very least, it will be a good learning experience. Not sure how much those $200 matter to you (e.g. would you starve if you lost them all, etc).
In order to make any reasonable amount of money from that, you’ll need extremely high risk pools. Check out [yieldsamurai.com](https://yieldsamurai.com/) and filter by DAPR, maybe change period to 7 days. Then pick one that’s consistently yielding 5000%. But bear in mind that this also has a high risk associated with it.
Also, with $200-$300, the Ethereum network is out of the question. I’d even say that AVAX would not be worth it. Stick to stuff like Arbitrum/Optimism where transactions are basically free. Actually, also remove Optimism from the equation for now, as you need networks that are supported by CEX-es. Going full decentralised only makes sense at $10,000 upwards.
>Is yield farming in a bear market smart
2 ways in which it is:
1. You spend at least 30 minutes per day actively choosing high APR pools on yieldsamurai with small sums of money
2. You farm stablecoins with large amounts
I don’t think there’s any other use case tbh.
>Are there any better platforms/dexs for this
As I said, Uniswap on Arbitrum, Spookyswap on Fantom and Quickswap on Polygon might be your best bets, otherwise you’ll use a substantial % of your money on transaction fees (ETH,AVAX) and bridge fees (Optimism).
>Finally are there better methods for bear market income ?
Depends on your net worth.
Yield farming with stables has been my thing for 2 years now. But if you’re starting low you might want to all in on a shitcoin for a x100 with money that you can make in a day of two via working.
Still, looking for high APR pools might be your best indicator as to which shitcoins are capable of doing so. I’d also recommend following the coingecko listing bot on twitter and the yield samurai twitter feed for trending pools, as they often reveal coins that are about to get pumped.
And finally, one last product you need to be aware of – [debank.com](https://debank.com). It’s by far the best way for you to track your holdings once you start seriously yield farming on multiple platforms.
Have fun, and good luck, u/Weedlover944