AVAX Stablecoin Farm

Estimated returns: 20.13% as of Oct 2021

Investing Approach

The approaches above apply in this strategy too but it only uses stablecoins as pairs. The advantage of investing in pools that are fully stablecoins is that there is no volatility on the stablecoins themselves and no impermanent loss is incurred in the full stablecoin pools.

Since this is a double-stablecoins pool we can expect that the return will be lower than the strategies above. Even at this, we can still achieve 2 digits returns compared to full-stablecoin pools on Ethereum or Polygon.

Allocations

• USDT 33.33%

• USDC 33.33%

• DAI 33.33%

The actual pairs look like this:

• USDT-USDC pair on Trader Joe

• USDT-DAI pair on Trader Joe

• USDC-DAI pair on Trader Joe

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.