Blockchain technology opened the door to new financial solutions, with one of its components playing a major role — The DeFi Metaverse. From yield farming, staking to liquidity farming, those concepts share one thing in common: they allow anyone to use their capital in order to get percentage-rate rewards in return. There is no doubt this caught the eyes of crypto investors and potential ordinary Joe looking for additional revenue streams. There is definitely a new catch here!
Are you a new crypto user looking for a high APY at low risk? Are you an experienced yield farmer tired of manual monitoring and impermanent losses? The bridge between automated and decentralized financial services and traditional finances has unlocked unlimited possibilities and it is now within our reach. If you are wondering how to start yield farming and maximize your returns, automate your monitoring while lowering your risks — more particularly with the help of Single Finance — you will find everything you need to know here. Let’s get you started on this exciting journey.
What is Yield Farming?
Crypto liquidity providers (LPs), also known as yield farmers, are at the center of the staggering DeFi ecosystem. In a simple way, we could describe yield farming as lending crypto assets in exchange for rewards. DeFi protocols can be seen as startups waiting for daring investors to kick them off. Perhaps yield farming comes off as a rewarding program for early believers and adopters. It becomes an essential element in the functionment of the DeFi ecosystem as it enables exchange and lending services and maintains the liquidity on DEXs.
Yield farmers lend their assets through a smart contract, functioning as a liquidity pool. On the same protocol, the assets locked on those liquidity pools can be borrowed from other users. The same way as staking, yield farmers can move their assets from one pool to another one looking for the best APY offering.
Given the number of yield-farming protocols with differentiators to take in consideration, it might be difficult to choose which one fits the best. Each DeFi platform offers different incentives for optimized returns. Discover some of them below:
The Opportunities and Downsides of Yield Farming & DeFi
Fantastic, now that you are more familiar with how exactly yield farming is working, the first question coming into our mind is what are the main advantages of yield farming?
There is an opportunity of passive income that could be evaluated to a hundred times higher than traditional financing. Yield farmers rewards are often higher than staking, where APY can reach triple digits. Those returns can be boosted with liquidity mining, which makes yield farming extremely popular.
One of the downsides of high-yield harvesting strategies is the risk of liquidation. In case of an asset dropping in value, the gains might be wiped out and the collateral is put at risk for liquidation. This is without mentioning that some lending protocols require up to 200% of the value borrowed to be deposited as collateral. Yield farming relies on smarts contracts and DeFi protocols that could be subject to attacks and hacks. Users should also keep in mind the well-known and high risk volatility of the crypto market — the latter also goes for the entire DeFi ecosystem.
Yield farming requires an extremely well-thought and complex strategy. It might be a difficult task to evaluate and manage the risks effectively without close and very often manual monitoring of all market factors and situations. As things currently stand, investors are left without well-collected data and analysis that would help them in making the best investment decisions. As such, many question whether the rewards are worth the risk, which in turn great impacts and slows institutional and mainstream adoption.
Single Finance: The New Revolution For The DeFi Metaverse
That being said, Single Finance Lab aims to alleviate and tackle the challenges that prevent crypto investors from maximising their revenue. It emerges as the first solution in providing different Single-click strategies for the best return on investment and risk management on Cardano. Managing the risks, automating the monitoring or reducing of impermanent loss are the primary targets for both new or experienced investors.
“Single Finance is bringing capital protection and a user-friendly experience to crypto, for everyone to use. Incredibly, hedging the price risk actually boosts the yield farming position’s profitability.”
Single Finance provides investors with one unique platform where users can benefit from the Single-Click Strategy:
Impermanent loss is hedged and minimised when you open the position.
All return ratio is calculated based on the principle at fiat value, i.e. USD.
Automated bot to exercise pre-configured strategies like stop loss and re-balancing.
All stop loss will be triggered based on the principle at fiat value, i.e. USD.
All manual steps and monitoring are alleviated.
Offering three kinds of Single Strategies, Single Finance lets users choose the one that best fits their goals and risk appetite:
Single Curve Strategy
Increases your return through adding leverage to your liquidity mining position.
At the beginning of the position, aims to achieve delta neutrality for the assets.
Impermanent loss is minimised.
Single Greek Strategy
Selects the liquidity pair with the least price volatility.
Increases your return through adding up to 6x leverage on your liquidity mining position.
Single Idle Strategy
Detects when the Single Greek Strategy and Single Curve Strategy trigger the stop-loss mechanism.
Stakes idle assets to the staking and lending pool to generate a guaranteed return automatically.
Single Finance will help you to achieve your targeted returns through lending your idle assets and utilising bots for market evaluation and automated strategic executions. The four types of bots to execute pre-configured strategies include:
Auto-compounding bot to boost return.
Stop loss/gain bot to protect your capital.
Re-balancing bot to keep delta-neutral position.
Liquidation bot to protect the lender’s assets.
Another key product offered by Single Finance is the Time Machine, which provides real return performance data based on real price history and detailed analysis to help investors make the best investment decisions. The time machine includes the following features:
Equity value calculator takes all factors into account, including price impact, trading fee and block rewards.
All return ratio is calculated based on the principle at fiat value, i.e. USD.
Comparison features allow users to analyse the differences among different products, e.g. investing in liquidity pairs vs investing in Bitcoin.
Support all EVM compatible chains.
Staking is gaining popularity among institutional and retail investors. As the Cadanos’s First Single-Click DeFi Strategy marketplace, there is no doubt Single Finance will quickly become the DeFi investment game changer.
About Single Finance:
Single Finance Lab is a platform providing different Single-Click Strategies of leveraged yield farming to achieve targeted return and manage risk exposure on Cardano. Their vision is to give everyone access to a hassle-free wealth-care solution of DeFi — including both institutions and individual players.