AVAX DeX-Stablecoin IndexFarm

Estimated returns: 178.41% as of Oct 2021

Investing Approach

This strategy has the same approach as the above-explained strategy but it replaces AVAX with Stablecoins (USDT, USDC & DAI). The thinking behind this strategy is this:

Volatility affects tokens and doesn’t do the same for stablecoins. A pair with a stablecoin means it will experience half the volatility it would ordinarily have with the other tokens.

While the DEXes tokens will have better APRs because of the support they receive from their DEXes, we can still expect better growth on the value of these LP tokens because there are a lot of trading fees that come from DEXToken-Stablecoin pools and the DEXToken-AVAX pools above.

Allocations

• JOE 40% (USDC-JOE pair)

• PNG 5% (USDT-PNG pair)

• LYD 5% (DAI-LYD pair)

• USDT 5%

• USDC 40%

• DAI 5%

*Stablecoins will be preferably allocated as 50% of the funds.

Portfolio Growth

The incentives a user earns from yield farming these pairs would be compounded automatically by DAOventures smart contracts. This would ensure that the portfolio is rebalanced so that the strategy can reset back to its standard allocations as shown above. This will maintain a balanced allocation as a result.

Risks

A standard risk when it comes to providing liquidity on decentralized exchanges is Impermanent loss. To know more about impermanent loss, you can check this article, made by Binance Academy.

Fees

Besides the standard 0.5%-1% deposit fees and 20% profit sharing fees (see here for more details), there is a 10% fee on the yield farmed which is used to pay the gas fees associated with harvesting rewards and depositing LPs.