Earn 58% with Curve on Polygon
Disclaimer: This is not financial advice. This is an educational resource that should never be interpreted as a recommendation to buy any digital assets mentioned or to participate in Curve pools. Please do your own research.
Curve is a DeFi protocol that focuses on like-asset pools to enable deeper liquidity for some of the most popular tokens in DeFi on Ethereum, including stablecoins, tokenized BTC, and different forms of ETH such as stETH. Curve is known as the second largest automated market maker (AMM) in the world with $5.55B in deposits.
New Curve Aave Pool on Polygon
Recently, Curve launched its first stablecoin pool on the Polygon/Matic sidechain. Polygon aims to provide faster and cheaper transactions than Ethereum with sidechains, which are blockchains that run alongside the Ethereum main chain. Polygon has notably attracted some of the biggest names in DeFi on Ethereum, like Aave, a DeFi borrowing and lending market.
Curve's first stablecoin pool is composed of Aave interest-earning tokens (aTokens): aDAI, aUSDC, and USDT. The Aave Curve stablecoin pool has attracted $21.5M in liquidity. Anyone can deposit any ratio of these 3 aTokens or the underlying stablecoins DAI, USDC, USDT to start providing liquidity and in return, earn a proportion of the trading fees paid by Curve traders.
Polygon $5M Yield Farming Program
Polygon just today announced providing $5M in WMATIC funds to reward those providing liquidity in this Curve Aave pool on Polygon. At the moment, those additional rewards are yielding Curve liquidity providers a base APY of 16.32% (8.51% as of April 26, 2021) and additional WMATIC rewards APY of 141.47% (49.68% APY as of April 26, 2021). The best part of this yield farming opportunity is the ability to earn while paying significantly less in transaction fees.
Why is this referred to as yield farming? Because we're earning multiple forms of yield just for providing liquidity.
- Stablecoin interest accrues to the underlying aTokens
- A percentage of fees paid by Curve users to trade stablecoins
- WMATIC from a pool of rewards incentivizing new liquidity providers
How to Yield Farm with Curve on Polygon
Here's how to get started earning 3 forms of yield with this new Curve liquidity pool, including lending interest, trading fees, and WMATIC rewards!
- First, one must migrate DAI, USDC, or USDT or aDAI, aUSDC, aUSDT to the Polygon (Matic) blockchain using Zapper Bridge. One can participate with any amount of these tokens and refer to this tutorial on how to use Zapper Bridge if you're new to Polygon.
- Once you have stablecoins or aTokens available on Polygon, go to Curve Aave pool deposit page on Polygon linked here.
- Connect your MetaMask account like with any DeFi app.
- If you have stablecoins, you can simply specify how many DAI, USDC, or USDT to deposit.
- If you have aTokens, check off the box to Deposit aTokens and then specify how many to deposit.
- Lastly, press the green button to Deposit & stake in gauge to initiate a series of MetaMask transactions, including 4 total if you deposit a single token and up to 7 transactions if you deposit 3 tokens at once. The beauty of Polygon is you pay pennies per transaction in the native token MATIC.
You'll now accrue lending interest, trading fees, and WMATIC rewards as long one leaves their funds deposited in the pool! In the future, one can return to this Withdraw page for the Curve Aave pool to unstake the liquidity provision or choose to "Withdraw and claim" rewards, including the WMATIC subsidizing those participating.
You can track your Curve liquidity pool balance with Zapper Dashboard, but one can also find their balance of tokens in the pool on the Withdraw tab for Curve Aave pool along with estimated WMATIC earned rewards.
Before entering this liquidity pool, please check the updated APY being earned by liquidity providers because rates can go up and down according to the price of WMATIC, the trading volume in the pool, and the depth of liquidity.