Yield farming may not be as exciting as it used to be but farming on Optimism right now is the best hit of dopamine you can find in DeFi, if we are being completely honest. Of course, this comes with certain risks so DYOR, never invest what you can't afford to lose, and know that this is not financial advice.
What Is Optimism?
Optimism is an Ethereum rollup enabling you to practically use ETH without the high network fees. Transactions are still executed on the main chain but they are rolled up and submitted by Optimism and not directly by the users which makes life a lot easier for everyone.
You can find more info regarding how Optimism works here.
How?
To connect to Optimism you will need to add it as a new network on Metamask. Click on "add new network" on the dropdown menu and enter the following information:
Network name: Optimistic Ethereum
RPC URL: https://mainnet.optimism.io
Chain ID: 10
Currency: ETH
Explorer: https://optimistic.etherscan.io
Once you hit "save" Otpimism will be ready for use but you will need some ETH to pay for the transaction fees. ETH can be bridged from Mainnet or many other different chains like Matic and Fantom using the Across Protocol bridge. There are other bridges that can also get the job done but Across doesn't have a token yet so why not try and qualify for that airdrop once it comes?
Why?
Let's get right to the numbers and see exactly why I'm talking about Optimism farming today.
Velodrome
I already wrote about Velodrome but here is a quick recap regarding yield farming opportunities:
The image may be a bit outdated since these numbers are from a few days ago but the APY is still very similar. The most interesting pool here is surely Lyra/USDC considering that Lira Finance is already an established option trading platform on Optimism and the token price is fairly "stable".
So far the platform has generated almost $150M in TVL and the token price did a 10x in the past two weeks or so. I feel like there is a lot more room for growth but there is no need to take my word for it. DYOR!
Beethoven X
Beethoven X is basically Balancer on Optimism. Here you can put many different tokens in one pool, essentially create a portfolio, and earn a yield on your deposits. Impermanent loss risk is a lot lower than in liquidity pools but it still exists. Those that don't mind getting hit with some IL every now and then can choose between many different pools that offer up to 220% APR.
More on Beethoven X and how it works can be found here.
Tarot Finance
True degens know that leveraged yield farming is not for the faint of heart but if you have a coherent plan for your entry and exit strategies it can help you improve your earning potential immensely. Tarot allows leverage of up to 5x on your LP deposits with APY ranging from 80% to 5k% depending on the risk and liquidity of the pool.
When leverage farming you are essentially borrowing assets from others so some of this yield will have to go towards repaying your debt. Do the math, see if it makes sense, and stay safe.
It's also worth mentioning that Tarot is a lending platform so you can even stake your tokens for a good return. Currently, there is a 2.2k% supply on ETH deposits in the ETH/AELIN pool. Liquidity is low so it will probably go down very soon but if you keep an eye on the markets every day there is opportunity at every corner.