- The Defi Chronicle: How I am stacking rewards on Binance Smart Chain tripling my yield streams
Trying to figure it out
Just now·5 min read
Altcoins have taken a beating since May’s Bitcoin/crypto washout. Bitcoin dominance has been increasing and it may continue going up at the expense of the altcoin market. I haven’t given up on the alts in my portfolio as I am optimistic that the bull cycle is not over and at some point, the alts will take off again. I am not focused on adding too many low cap alts right at the moment because the risk/reward isn’t attractive to me. I am DCAing into Link and ETH as well as BTC as I feel that all three of these projects will benefit if/when the markets heat up again and have lower downside risk compared to smaller projects. This is not financial advice and I am not a financial advisor. These are just my experiences and interpretations that I am sharing.
I had some yield farms on Pancake Swap prior to the market correction that were generating a steady flow of Cake tokens. However, Pancake Swap lowered the rewards on many of these projects so I went exploring for some different ways to maximize my yield on on the Binance Smart Chain. One project that I have started using to stack my Cake rewards is Ramp Defi.
Why I am bullish on Ramp Defi?
Defi platforms aren’t providing enough yield to protect me from losses on my yield farms. I am playing a longer game trying to generate rewards from stablecoins and the existing farms that I have. BSC has seen a lot of exploits on their network making me hesitant to use anything other than Pancake Swap. I tried Pancake Bunny, Spartan, and Belt and they all got attacked so I have no interest in using these platforms or owning these tokens right now.
Ramp Defi is not the largest Defi platform. They have around $40 million in total locked value which isn’t that much. I like Ramp Defi because it has a unique value proposition in that you can borrow a stablecoin, rUSD against your farming vaults. You can then take your rUSD and put it in a vault where you can earn rewards in Ramp tokens. So now I am earning multiple reward streams on Cake rewards from Pancake Swap. I will go more in detail on how I do this in the next section.
The Ramp team and advisors are comprised of professionals from many big name companies increasing credibility in the project. There are also some big Defi investors invested in the project including Alameda Research, Parafi Capital, and Arrington XRP Capital. This tells me that this is a well-planned project with direction and goals. Ramp token’s price has been hit hard trading in the 20–30 cent range, but there are over 12,000 holders which means there is adoption. With less than an $80 million market cap, if the project takes off, there is significant upside.
Right now, the platform exists on Binance Smart Chain and Ethereum. The team is working on building the platform out on Polygon which I think will take it to the next level. Gas fees on Polygon are almost zero and capital is flowing into Polygon at an increasing rate. This catalyst could have a big impact on the Ramp token price and should have a huge impact on platform use.
My current strategy for Cake on Ramp
I had my Cake rewards in an Auto Cake pool on Pancake Swap. Currently, the APY on this pool is 113%. I think that Cake is one of the best options on BSC because it’s competing with Uniswap and hasn’t had any hacks/manipulation thus far (to my knowledge). My logic is that if the Binance Smart Chain succeeds, than Pancake Swap should succeed as well. Therefore, I am fine stacking more Cake rewards from the proceeds of my Cake yield farms.
I took my auto compounding Cake tokens from Pancake Swap and moved them to an Auto Cake vault on Ramp defi. It currently has a 116% APY auto compounded in Cake. Next, I mint (essentially borrow) rUSD that stays around $1. I try not to maximize my loan because I don’t want to get liquidated if the price of Cake drops precipitously. Once I have minted the rUSD it actually tells me the exact liquidation price that Cake would need to hit for me to be liquidated which I find helpful. Next, I swap 1/2 of the rUSD on the Ramp platform to BUSD. Then I go to the liquidity tab and supply an equal amount of liquidity to rUSD and BUSD. Afterwards, I add the rUSD/BUSD pair into the stablecoin vault on Ramp. This vault pays out 42% in Ramp tokens. Once I accrue enough Ramp tokens from the rUSD/BUSD pair, I take the Ramp and put it in the Ramp Single Asset Vault where it auto compounds at a 25% APY. Here’s a hasty flow chart on what this looks like:
Before, I only earned rewards in Cake in my auto compound Cake pool on Pancake Swap. Now, I am earning two additional streams of Ramp tokens (from the rUSD/BUSD vault and the Ramp single asset vault). There are risks of the rUSD price moving down significantly so I’m putting faith that they keep their stablecoin price stable. Additionally, it’s not a sure thing that the Ramp token price goes up. However, I feel that the rewards outweigh the risk and, as I stated earlier, I am optimistic about Ramp in the future.
I am excited to see Ramp included in Polygon. I have noticed that many of the projects on Polygon have schemes where the token prices will have continual sell pressure. I like that Ramp isn’t charging fees on deposits or withdrawals and the interest rate when you mint rUSD is extremely reasonable and should be less than the rewards I get.
Thank you for taking time to read this article. Hopefully, it motivates you to take a closer look at some of the other projects in this space so that you can maximize your yield and take full advantage of future legs up! If you like this article, I invite you to read some of my other stories and clap so that it can be seen by more people.
- Date of publication:
- Fri, 06/11/2021 - 12:51
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