Bitcoin and yield farming

[amicrypto]

I am looking to invest some BTC to generate passive yield on my collateral. What are the best techniques and places to invest and generate passive returns on BTC?

Most of the top projects were offering somewhere from 1% to 10% returns on BTC lending.

Although, there was one project in the De-Fi world that piqued my interest. WOWswap, a cross-chain De-Fi leverage lending protocol is offering users to generate 719% APY by lending to their pool.

I did some initial research and was able to understand that:

• Leverage traders use WOWswap to make leverage (up to 5x) long, short positions in various coins.
• The liquidity for leveraged trade comes from a liquidity pool where depositors lend their token to the liquidity pool and are rewarded with returns that comes from the transaction fees generated by leveraged traders.
• Returns on any lending is decided by the pool utilization and the demand for those tokens to trade.

Currently, BTC has 719% APY (https://wowswap.io/earn) which makes it a very attractive proposition to lend especially in the current volatile markets.

Has anyone tried using their lending option to earn returns? Do let me know your thoughts around this protocol or if there are any other better investment opportunities to earn passively in BTC.

[Rikafip]

Currently, BTC has 719% APY (https://wowswap.io/earn) which makes it a very attractive proposition to lend especially in the current volatile markets.

You might have created wowswap thread in the altcoin section instead as point of this thread is obviously to promote than altcoin project and not to look for the best place earn BTC passively. But let's say that you really want to give someone else your BTC and earn passive income from it, probably the safest option (more precisely least risky) is Celsius with ~5% APY on BTC. I know couple of people that are using it and are quite satisfied with it but I personally wouldn't trust them with my BTC.

Anyway, expect your thread to be moved to altcoin section where it belongs.

[Pmalek]

Never heard of that DeFi platform before. But I am not involved in such activities, so I wouldn't know. A quick search over the Internet has not found any records of scams or hacks. There isn't a lot of talks about the site on Bitcointalk either. Generally, I would be very careful who I give the custody of my BTC to. More precisely, I wouldn't give it to anyone. I especially don't like hearing numbers such as 700% returns on investment and similar 'promises' and 'guarantees'.     

[cryotreasure]

These are turbulent times. If it were me, I wouldn't hand over bitcoin easily. Maybe one day, the founder announced that he was quitting. The defi platform is not decentralized at all.

[Jawhead999]

Currently, BTC has 719% APY

This is misleading, it's not BTC but BTCB which means a token created from someone pegged with Bitcoin value using BSC chain. You need to separate both of them since BTCB isn't BTC, BTCB is same as many shitcoins and not even safe due to centralization.



If you ask me, I don't use any platform to earn passive income in BTC. I'm just holding on my non custodial wallet and gaining passive income from the volatility, nothing more.

[NeuroticFish]

I am looking to invest some BTC to generate passive yield on my collateral. What are the best techniques and places to invest and generate passive returns on BTC?

For allowing such things as "passive yield" you probably have to
1. convert your bitcoins into something else - probably altcoins althoough they sometimes are pegged to bitcoin and may look like they're bitcoin
2. possibly send out your money into others' custody

This means that you are on the risks of the other coins and platforms from price fluctuations against bitcoin in some cases to vulnerabilites of those coins/chains/platforms.
Even more, as you know, not your keys, not your coins.

I will also add that if something looks too good to be true, you better stay away.


So, as others said, I would not risk by bitcoins for some virtual pennies to earn. But what I'm telling is only common sense general stuff, I didn't risk my money to see about those platforms.

[mk4]

That APY is definitely unsustainable, and will most likely hugely drop as more BTCB gets deposited.

Not to mention that this seems to be a very unpopular BSC platform. Totally not worth risking at all.

[amishmanish]

The APY on any of the DeFi platforms is mostly due to their own token emissions. These go up and down based on the hype and how much of it is being dumped by the pre-sale people and the farmers.

In case you are looking for yield on BTC, It is going to be very difficult to find legitimate opportunities. Those which are legitimate would definitely not be in the 700 range as in the example you quoted above.

Go for something like Badger or even CRV where you would know that it is going to be safe.

[dkbit98]

This shit is NOT related with real bitcoin but with some token that is representing fake bitcoin on totally centralized binance smart chain, operated by just few nodes from CZ and his friends.
I would never send BTC and convert it to some token because of ''low fees'' and big yield percentage advantage, when I know this can all fall apart like dominos.
This swap farming thing is probably worse then legit centralizes services that earn small percentage if you send them your bitcoin.

[amicrypto]

Generally, I would be very careful who I give the custody of my BTC to. More precisely, I wouldn't give it to anyone. I especially don't like hearing numbers such as 700% returns on investment and similar 'promises' and 'guarantees'.     

It is not exactly giving up custody, it is locking up your BTCB (a mirror of BTC on BSC) and getting ibBTCB (interest-bearing BTCB). I did some research as well and the crazy returns are coming from the leverage traders who use this capital and pay interest on it.

The defi platform is not decentralized at all.

Did you go through the contracts? Can you highlight the concern? I don't have technical understanding and hence would appreciate if you can list your concerns from the smart contract.

That APY is definitely unsustainable, and will most likely hugely drop as more BTCB gets deposited.

Not to mention that this seems to be a very unpopular BSC platform. Totally not worth risking at all.

Yes, the APY has fallen. Since the last time I checked, someone has deposited close to 100 BTCB and the APY has fallen to 50%.
Why do you say that it is an unpopular exchange?

[PrimeNumber7]

Generally, I would be very careful who I give the custody of my BTC to. More precisely, I wouldn't give it to anyone. I especially don't like hearing numbers such as 700% returns on investment and similar 'promises' and 'guarantees'.     

It is not exactly giving up custody, it is locking up your BTCB (a mirror of BTC on BSC) and getting ibBTCB (interest-bearing BTCB). I did some research as well and the crazy returns are coming from the leverage traders who use this capital and pay interest on it.

I have not looked at the contract you are referencing specifically, however, there are risks to lending out bitcoin (or any altcoin) on these platforms.

These types of platforms work like this:
The depositor send coin to the platform, which in turn lends out their coin to borrowers, who in turn put up collateral in the form of another type of coin. If the value of the collateral drops below a threshold, the collateral will be liquidated. The problem is that if there is a coin that is being used for a lot of collateral, if the price of this type of coin drops, the platform may not be able to liquidate the collateral at a rate that will make the depositors whole. It is difficult for smart contracts to manage this type of risk, as there being "too much" of a type of collateral being used is subjective and will require looking at outside sources.

If market forces are paying 7xx%+ APY of interest on deposits, the market is saying lending on this platform is high risk, especially if these high-interest rates are not "temporary spikes" caused by a sudden increase in demand for loans.

I will not endorse any particular lending platform. However, I would suggest that you review the rates being offered on centralized crypt lending platforms. One person in this thread mentioned celsius.network. There are other lending platforms out there that you can also review. These platforms should give you somewhat of an idea as to what the market is offering in terms of interest rates. If you are being presented with an opportunity that pays substantially higher than market rates, I would encourage you to consider why this might be, including if the market is believing that the particular platform is particularly risky.