14.54% APY Returns on DeFi Yield Farming! DeFi Trend Will be Sustainable?

[mirrasel]

Hi Crypto people, hope all you are enjoying the recent DeFi trend. But are you really aware of Yield Farming? Or APY?

Decentralized lending and borrowing remove the barrier between a bank and bank users. It is on the way to create a bankless society. Allowing anyone to collateralize their digital assets and use this to obtain loans. One can also earn a yield on their assets and participate in the lending market by contributing to lending pools and earning interest on these assets. With decentralized lending and borrowing, there is no need for a bank account or a credit-worthiness check.

Many of the platforms like Aave, Compound, Dy/Dx, Falcurm, etc. are providing this opportunity!

The Annual Percentage Yield (APY) differs between assets as it is algorithmically set based on the supply and demand of the asset. Generally, the higher the borrowing demand, the higher the interest rate (APY) and vice versa.

Let's have a look at the Annual Percentage Yield (APY) of DeFi Yield Farming of this month!




What do you think about this trend? Let's chat on this!

Want to get real-time Crypto & DeFi analytics?

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Prepared by
Mir Rasel
Digital Lead, Bitcurate
www.bitcurate.com

[1714774165]

1714774165

[bitmover]

15% apy?

I would stay away
 There is no easy money. Looking for investments like that that most people get scammed.

Those are very risky as speculative assets.

[AmoreJaz]

15% apy?

I would stay away
 There is no easy money. Looking for investments like that that most people get scammed.

Those are very risky as speculative assets.

and to add also, if the OP will revisit the APY after couple of months, i guess the percentages will be different.
 i dont believe in high returns as well. that percentage may be true today because of the DeFi hype but after few months, the story will be different.
or if the OP can post also the same table after 2 weeks and let's see the comparison of rates. same projects involved.

[X-ray]

15% APY is still non sense thing even when such service was offering the lending service and how is it possible for the such service offering this 15% of APY while another project has already offered only up to 3% - 4%?

That needs to be asked by the creator of such project especially it's for staking USDC and how is it possible? I believe this defi is not even the same like exchange site which has active source income.

, the most important thing is that the smartcontract is without tricks, so that you can get your own back.

That needs to be fully audited but the question is whether the team wanna publish their own code to make others can verify the contract or not?

[btc_angela]

That huge amount? I don't think so, it will be sounding like a Ponzi scheme. I know that everyone is very happy about that huge APY but you have to understand that long term it won't be sustainable and might collapse. No need to exaggerate this yields just to attract more investors, because it might be the opposite as smart investors really knows what's going to happen next with the huge return, so it is not sustainable, the way I see it.

[optimisticcm]

The projects in defi sector that are offering high yield must be dealt with care and first let them prove them and the sustainability of the returns for good few years because 15% returns are not offered anywhere in cefi and defi projects.

[cryptomaniac_xxx]

The projects in defi sector that are offering high yield must be dealt with care and first let them prove them and the sustainability of the returns for good few years because 15% returns are not offered anywhere in cefi and defi projects.

That is why they are offering this big amount of yield, to attract beginners. But as attractive it can be, it can also one way to deceived or hide their true intentions. Who knows, maybe they would also run and do an exit scam? There are a lot of thing that is very wrong in the beginning, so it's really dangerous to join this Defi Yield farming, too many red flags!

[brightemo]

Check kucoin staking, much higher apy there even before all this defi story

[mersal]

15% is okay but do you think this project will stay in the market for that much longer?

I guess it is not going to be so don't feed your greed anymore since the return is highly not possible in reality, already defi market starts to hinder in a week and it may goes to none in the next few months.

[santiagomaicon]

How so big apy could be sustainable?

[qwizzie]

We have already seen fees between $50 - $100 for a single transaction, when interacting with a DeFi protocol on Ethereum.
The more DeFi traffic increases on Ethereum network, the higher these specific DeFi fees (and the gas fee in general) will get.
Ethereum already has a network utilization of 95%, it will not take much to see a whole new level of network congestion and crazy fee levels on that network.

https://cointelegraph.com/news/using-a-defi-protocol-now-costs-more-than-50-as-ethereum-fees-skyrocket
https://cointelegraph.com/news/99-gas-fees-on-ethereum-are-crippling-defis-growth

The high DeFi fees will lock small investors in those DeFi projects, as these DeFi fees will get too high for them to pay.
Only the bigger whales will have no problem with paying these high DeFi fees.

So no, DeFi Trend will not be sustainable because all these DeFi token projects rely on a single blockchain (Ethereum) that can not scale, is facing lower network security,
gets more and more congested and is getting hit with a higher gas fee and exponentially higher DeFi fees.

https://coinmarketcap.com/tokens/

Most likely DeFi volume / DeFi transactions will flow from Ethereum to other decentralized platforms that can actually scale.

[hatshepsut93]

Not only the rates are unsustainable, there's also a ton of risk with this DeFi investing - DeFis get hacked all the time or have some bugs that lead to fund loss in other ways, you can lose money if someone with big pockets will try to manipulate the market, the token itself can crash, because it's in a bubble, a negative downtrend in Bitcoin would take the whole crypto market with it, and some of the DeFi are just scams or will pull an exit scam.

[Fundamentals Of]

It cannot be denied that DeFi yield farming has good numbers. But it cannot be a solid basis for sustainability. It is very hard to judge DeFi based on its current numbers since it is still at its peak right now. Nobody knows how it will turn out in the next months.

Just like the ICO, who would have thought that it will die when one project after another is raising millions and millions? A lot are even sold out in just a matter of hours and days. Some others are even overshooting their maximum caps.

But it just suddenly died out. I hope I am wrong but this could actually happen to DeFi.

[r32godzilla]

There is one problem, this interest is calculated for today, but we can expect that more people will join DeFi and allocate their funds for Yield Farming, which will cause that the interest rate will fall down because there will be a higher demand for this service. 

[tomahawk9]

No, it's not "bubbles" are not sustainable. DeFi in 2020 is the same BS we saw in 2017 with ICOs, a new crypto bubble has emerged and it's getting bigger and bigger every week...By the time people (mostly newcomers and the 'making a quick buck' kind of users) realize what they got themselves into, it'll be too late

Surprisingly, defi scams have started cashing out their gains: Another DeFi exit scam just made off with $20M in investor funds

But honestly, the defi hype won't dissapear for a while, the ICO hype in 2017 took like 6 months to reach its peak, we could expect something similar with the DeFi bubble given how we're already in a bull run.

[hrunya102]

This is a good trend, it takes time to check the reliability of projects, but even now people not from the crypto world are interested in what these defi are and how they work.

[MFahad]

This is a good trend, it takes time to check the reliability of projects, but even now people not from the crypto world are interested in what these defi are and how they work.

People should understand what is defi and also they should closely monitor the defi projects before investing in them. There are a lot of defi projects in the market both good and bad ones and i hope no one gets trapped in the scam ones.

[beerlover]

That is still not sustainable, 14.5 is not something you expect when you make an investment, specially not in dollar format because if you could make 14% per year in dollars, you could literally build a whole business out of that, you could give people 10% guaranteed yearly return and they would give you SOOOOO much money, when this is the fact you know it is too good to be true.

The only person who could offer over 10% guaranteed over long period of time was Warren Buffet and even he is too old to talk about the future now, which means you are not going to get anything out of 14.5% per year type of deals, it is a ponzi scheme and eventually either the value will drop or you are going to end up with not making that much money and get scammed eventually.

[nelson4lov]

That is still not sustainable, 14.5 is not something you expect when you make an investment, specially not in dollar format because if you could make 14% per year in dollars, you could literally build a whole business out of that, you could give people 10% guaranteed yearly return and they would give you SOOOOO much money, when this is the fact you know it is too good to be true.

~Snipped ~

Yeah. I think a lot of people locking their funds in DeFi protocols already know that. But they still go ahead to do it. It's probable because they use stablecoins to participate in these protocols and we know the value of stablecoins are pegged to USD so it's not susceptible to volatile price movements. The major risks with DeFi protocols right now is  either smart contract bugs or hacks. My concern with protocols is that sooner or later, scammers will hop on the space (If they haven't already) or the APY decreases significantly and it doesn't seem to be doing that anytime soon.

DeFi is currently being hyped. The last time something was hyped like this, it got burst at the end. The core of DeFi might remain (decentralized the financial systems ~ loans, bomds, etc) but these insane APY(s) won't.

[wiss19]

It can be possible that they are giving up to that 14.54% giving that I have seen one that is giving up to 18% and that’s Crypto.com when you stake with their wallet and with their own token that is known as CRO. So, it can be possible.

Moreover lending platform is nothing new, before now there have been many of them platforms that are lending money to cryptocurrency users, so don’t make it seem like it’s something new, there is nothing new about this. And like other people have pointed out, these companies might be giving these much because of the DeFi trend, and it will all depending on how long the hype is going to last, and everything will drop again.