Rainforest Stack #009 Best DeFi Yields (Jan 11, 2024)

Discover the latest in DeFi yields with Rainforest Stack. Uncover various strategies and opportunities in yield farming, presented in an easy-to-understand format for DeFi rookies and experienced farm

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The Bitcoin ETF narrative has finally come to a close. ETF issuers are battling over fees, and all $BTC holders have the pleasure of sleeping, knowing that in the coming decades, institutions, pension funds, and even sovereign wealth funds will be pumping their bags. 

A small $80 million wipeout on the 9th following the SEC’s security lapse showed investors the future a day early. The best pair immediately after the false Twitter approval was the ETH/BTC pairing, and the next narrative has already begun. Prepare for Ethereum to dominate in Q1 and for $ETH betas to make face-melting rallies.

Spot ETF issuers are fighting tooth and nail over fees, which makes sense, given the passive nature of ETF funds. Acquired customers will more likely than not stay with that provider for life. BlackRock announced a fee cut to 0.25% with 0.12% for the first $5 billion, aiming to crush the competition. Now that the Bitcoin Spot ETF saga has closed, the next ETF narrative will be Ethereum. 

Welcome to the Rainforest Stack. A guide for the intrepid into the dynamic world of DeFi yield. 

Constituted of four distinct layers: undergrowth, understory, canopy, and the emergent layer. Each layer boasts a different level of risk broadly categorized in line with the Lindy effect- the longer something has survived, the more likely its continued existence becomes. 

An impact with oversized ramifications in the crypto space where hundreds of new protocols live and die each quarter.

More details about the Layers of the Rainforest stack here.

Emergent Layer — Enduring Yields

1. Pool: stETH on Lido. APY: 4%. TVL: $22.4b. Chain: Ethereum

2. Pool: DAI on Maker (DSR). APY: 5%. TVL: $1.46b. Chain: Ethereum

3. Pool: rETH on Rocket Pool. APY: 2.9%. TVL: $2.58b. Chain: Ethereum

4. Pool: frxETH on Frax. APY: 3.86%. TVL: $715m. Chain: Ethereum

5. Pool: GMX on GMX V1. APY: 5.06%. TVL: $321m. Chain: Arbitrum