The race for higher yields are endless and today I stumbled on another fascinating way to earn some where close to 50% APY. This is another protocol on Terra Protocol called Spectrum Protocol.
https://terra.spec.finance/vaults
Like many farms protocols Spectrum has an audit done and currently a little under 130 million in Total Value Locked. It has multiple pools to farm and its key incentive is that it will automate farming in such a way users can schedule when to reinvest earnings or not at all. The platform rewards users who provide liquidity to the platform their native token SPEC which is currently worth $2.22 each.
Protocols Tag Teaming To Earn More
What is interesting in Spectrum is its most recent pool available for its investors.
On the surface the pool do not look like much. It is basically providing bPsi to Spectrum and farm in their pool. However for those new to Terra there is a lot more happening within the pool. Lets take a deeper dive into what makes this pool so interesting.
https://terra.nexusprotocol.app/
The Nexus Protocol is another Terra Protocol. This one focuses on increasing investor's yields for those who stake in its protocol on versus liquidity pool. By participating in their liquidity pools users earn native token Psi.
In addition Pylon Protocol another Terra Protocol focuses on holding and retaining same value of stable tokens for its investors and in return earn them dividends. Basically consider it as a loss-less investment as no matter which proposal on Pylon users onboard they will earn some sort of incentive.
Back in Oct. 2021 Pylon joined with Nexus to create a PSI token that would pegged to UST by bonding PSI tokens that would last until Oct. 2023. The tokens are labelled bPsiDP-24 in Spectrum and short for bonded Psi Pool for 24 months.
The short of it is Pylon allows investors to put in Psi and locked unto October 2023. In return users will earn approximately 37% APR of Psi tokens. What is cutting edge here is Spectrum takes the Pylon Psi Pool and automates the its investment so that end users can easily earn more yield than 37% while keeping their asset liquid!!!
Flow chart of how this whole process plays out between Spectrum and Pylon. Courtesy of https://spectrum-protocol.medium.com/liquid-pylon-vault-when-lossless-investment-meets-auto-compound-4c682d3e6c54
Conclusions
As Pylon locks the Psi the pool can then use other protocols to earn more rewards giving the overall APY to be much higher than Pylon's itself 37% or Anchor's 20% on UST. What is even better is that bPsi would be consider a liquid asset so users can trade bPsi back to UST and vise versa. Partake in a pool that has locked up time but the asset is liquid, how ingenious!
The risk here is bPsi is not pegged to the UST. In fact in order for this to all work is that Spectrum takes its earned rewards and repurchases enough bPsiDP in the current pool to match with UST. Basically trying to balance the pool to be 50/50 all the while providing providing users Spectrum earning at a current rate of 50.48% APR.
The race for higher yields are here to stay, and can you keep up?
None of what I write is financial advice. It is for entertainment purposes only. Thanks for reading!
LeoFinance = Financial Blog
LeoDex = Hive trading exchange for Secondary Tokens, Low 0.25% fees for deposits and withdraws.
HiveStats = Hive stats per user
LeoPedia = Informative content related to anything about Crypto and how to make financial gains in crypto!
CubDefi = LEO Finance's Defi with CUB Token