Introduction

My name is Taiki Maeda and I run a yield farming channel on YouTube with over 53k
subscribers. I am an aspiring DeFi educator and power user; I’ve learned a lot of valuable
information that I wanted to share with the community for FREE. I believe one of the most
powerful thing that DeFi allows you to do is to get your dollars to work for you, helping you
earn passive income.

This guide was started in late May, so depending on when you’re reading this, the
strategies may be a little outdated and the yields less extravagant. However, I believe that these
yields will last some time and provide a good way for newer DeFi users to “experiment” with
DeFi to test the waters a bit. NONE OF THIS IS FINANCIAL ADVICE.

● Link to my Yield Farming YouTube Channel

● Link to my Twitter
● No donation necessary; just subscribe to my channel
and leave a Like to help me with the algorithms!
 What is DeFi and Yield Farming?
In short, DeFi stands for “Decentralized Finance.” Here is my collab video w/ Benjamin Cowen
on an Introduction to DeFi & Yield Farming which should give you a good primer on the basic
primitive (lending & borrowing protocols and decentralized exchanges). Here are additional
sources from other amazing YouTube channels that will give a good introduction to the concepts
you’ll need to know as you learn to become a Humble Yield Farmer:

● What is a Liquidity Pool & What does it mean to be a Liquidity Provider?

● How does Yield Farming give you free tokens?
● What is “Degen Yield Farming” and What are the Risks?
● General tips to become a profitably yield farmer (ecosystem agnostic)
● How to Avoid Getting Rug Pulled
● What is Impermanent Loss and How to Avoid it?
● “DeFi for Beginners” by Whiteboard Crypto

Picking an Ecosystem to Farm At

You can farm anywhere, so it’s important to choose the right blockchain to farm at. Ethereum
has the highest adoption, but it has the highest gas fees due to it being the most decentralized
blockchain. On the other hand, Polygon (Matic) has near-zero fees because the blockchain has
high centralization. Other “ETH Competitors” like Avalanche/Solana/Fantom sacrifice some level
of decentralization in order for more scalability.

If you’re a beginner farmer, I recommend trying out Polygon first because the ecosystem is
extremely mature and the cost of error is low (since transactions are so cheap). After
understanding the basics of farming, you can venture out to other blockchains like
Avalanche/Solana/Fantom.

Yield Farming on the Polygon/Matic Ecosystem

Summary: With near-zero transaction fees, the Polygon/Matic network allows DeFi users the
ability to generate an income on their crypto assets. In other words, Polygon makes DeFi usable
for anyone, regardless of the size of their wallets.

Assumptions: This guide assumes you already have Metamask downloaded, configured, and
have funds bridged over. Below are resources to get you started.

1. Step 1: Download Metamask

2. Step 2: Configure Matic ecosystem on Metamask
3. Step 3: Bridge ETH from Coinbase to your Metamask (ETH blockchain)
 4. Step 4: Bridge ETH from ETH blockchain to Matic blockchain
5. Step 5: Yield Farm!

● Here’s my playlist for yield farming on the Matic/Polygon ecosystem

○ Vfat.tools to find farms; RugDoctor website to check for safety

Why is this possible? To incentivize liquidity to come on to the Polygon ecosystem, various
liquidity mining partnerships have formed. The largest of which being the $40M partnership w/
AAVE, where the protocol will PAY YOU to borrow & lend your assets. Partnerships w/ SUSHI
and CURVE exist as well.

UPDATE: This is no longer the case on Polygon as of June 2021, but the idea is that going to
ecosystems with liquidity mining programs is the way to go since they’re literally giving you
money to try their blockchain out.

Key Takeaway: Polygon will pay you to use their platform, so let’s capitalize on it.

OVERVIEW OF POLYGON STRATEGIES

There are many ways to earn a yield on your assets. There’s always smart contract risk. I’ve
outlined the strategies below based on their risk profiles (as of June 5th, 2021). Yes, there are
more lucrative opportunities out there but for a public guide, I only felt comfortable endorsing the
“DeFi blue chips.” AAVE rewards lowers on June 15th 2021 so it may affect some strategies:
Low Risk: This is recommended for HODLers with full-time jobs that just want to earn passive
income on their crypto without having to manage their positions. Only uses “blue chip” DeFi
protocols.

High Risk: This strategy aims to make the highest returns via degen yield farming. There are
ways to mitigate risk but there’s no way to completely “be safe.” Suitable for those that are
full-time crypto and knows the ins-and-outs of how things work.

1) Low Risk Strategies (AAVE, Curve)

This strategy uses what I consider to be DeFi blue chips. AAVE is the most powerful application
on Polygon right now given that they pay you to borrow and lend. This will only focus on the
lending side.

AAVE - earn 3-10% on your assets (MATIC, AAVE, WBTC, ETH, Stables)

Curve - earn 15-25% on your dollars

These protocols have been battle-tested and are multi-billion dollar protocols. This is a “set it
and forget it” type of strategy.

2) High Risk Strategies (Degen Yield Farms)

This strategy focuses on degen yield farming strategies. I famously was able to farm 10,000
$MATIC tokens in 2 weeks when I was degen yield farming in mid-May. I also have a tutorial on
how to become a profitable yield farmer here.
Essentially it involves getting into a ponzi-esque game where you stake assets, earn farm
tokens, and immediately dumping them on the market to purchase assets that you actually
want. There is the risk of getting rug-pulled but using public goods like the Rug Doctor can help
you audit the code of these farms.

As I mention in my videos, I like to borrow stablecoins on AAVE against my collateral, and farm
using that to maximize my yields and to be capital efficient. I do not endorse this strategy to
beginners unless you fully understand the risks.

Yield Farming on the Avalanche Ecosystem

Summary: Avalanche replicates the Ethereum experience with lower transaction costs. Though
fees are slightly more expensive than Polygon, it is more than 10x cheaper than on Ethereum.
This is because Avalanche is less decentralized than Ethereum but more decentralized than
Polygon.

Assumptions: This guide assumes you already have Metamask downloaded, configured, and
have funds bridged over. Below are resources to get you started.

● Step 1: Download Metamask

● Step 2: Configure Avalanche ecosystem on Metamask
● Step 3: Bridge ETH from Coinbase to your Metamask (ETH blockchain)
○ Doesn’t have to be ETH but using ETH will give you the lowest fees
● Step 4: Bridge ETH from ETH blockchain to Avalanche blockchain
 ● Step 5: Yield Farm!
● ***You can also directly withdraw from Coinbase to the AVAX Blockchain

Avalanche transaction fees are a little more expensive than on Polygon, but there is more
attention towards the ecosystem due to Avalanche Rush, a liquidity mining program by the
AvaLabs team to incentivize people to bridge to the AVAX ecosystem. They are allocating 10M
tokens, so if the price of AVAX is $60, that’s a $600M liquidity mining program.

OVERVIEW OF AVALANCHE STRATEGIES

To be honest, the yield farming strategies on all blockchains are going to be similar. Personally, I
deploy BIG into safe protocols (like AAVE/Curve) for the nice, safe yields whereas on the higher
risk ones, I deploy smaller size given I’m taking on more risk.

Low Risk: This is recommended for HODLers with full-time jobs that just want to earn passive
income on their crypto without having to manage their positions. Only uses “blue chip” DeFi
protocols.

High Risk: This strategy aims to make the highest returns via degen yield farming. There are
ways to mitigate risk but there’s no way to completely “be safe.” Suitable for those that are
full-time crypto and knows the ins-and-outs of how things work.

3) Low Risk Strategies (AAVE, Curve)

This strategy uses what I consider to be DeFi blue chips. AAVE is the most powerful application
on Avalanche right now given that they pay you to borrow and lend. This will only focus on the
lending side. Here’s my BEGINNER’S GUIDE TO USING AAVE ON AVALANCHE.

AAVE - earn 3-10% on your assets (AVAX,WBTC, ETH, Stables). Borrow against your collateral
to farm. If you pay 5% interest rate but earn 20% on your dollars, why not take the loan?

Curve-
● earn 15-25% on stables, BTC, or ETH.
● Do not underestimate the atricrypto pool. Here’s my video to help you better understand
it and why it’s so powerful.

These protocols have been battle-tested and are multi-billion dollar protocols. This is a “set it
and forget it” type of strategy.
 4) High Risk Strategies (Degen Yield Farms)
This strategy focuses on degen yield farming strategies. I famously was able to farm 10,000
$MATIC tokens in 2 weeks when I was degen yield farming in mid-May. I also have a tutorial on
how to become a profitable yield farmer here. The same concept applies to Avalanche, except
you have to understand that the fees are going to be slightly higher.

Essentially it involves getting into a ponzi-esque game where you stake assets, earn farm
tokens, and immediately dumping them on the market to purchase assets that you actually
want. There is the risk of getting rug-pulled but using public goods like the Rug Doctor can help
you audit the code of these farms.

As I mention in my videos, I like to borrow stablecoins on AAVE against my collateral, and farm
using that to maximize my yields and to be capital efficient. I do not endorse this strategy to
beginners unless you fully understand the risks.

Farm & Dump vs. “Farm to Accumulate”

The “degen yield farms” essentially employ a strategy of farming and dumping tokens to
buy an asset that you want to accumulate. However, you’re also able to farm tokens to
speculate on the future price of the asset. I go over an example around the 12:45 time mark in
this video, “How I’ll Yield Farm in a Potential Bear Market.”

This obviously depends on the type of farm that you’re entering. Usually a “farm and
dump” token is from a project with zero fundamentals and awful tokenomics (infinite supply) that
just acts as a cash grab. However, there are many tokens that do have fundamental value and
you can totally just farm them using dollars.

Example (from May 2021):

DFYN Network seems like an interesting project that could become something valuable in the
future. However, it’s a speculative bet so I don’t really want to buy the token with my own
money. So, I decided to farm it. I talk about my logic in this video at the 10:38 mark.

Using dollars, I LP the USDT-DAI pool to earn 70% APY on my dollars. So I just provide
liquidity, sit back, and watch my DFYN stack grow. If it goes to zero, oh well. I got them for free
anyways. If it pumps, great. Free moniez.

October Update: The coin has essentially gone to zero, but that’s the risk I took. I farmed this
for free with dollars, so I was okay to let it ride. God bless the people that bought this token.
This is the mindset that most farmers have. Try it, learn from your mistakes, and get
better.

Glossary of Key Terms

APR vs APY:
● APR represents the annual rate charged for earning or borrowing money.
● APY takes into account compounding, but APR does not.
● The more frequently the interest compounds, the greater the difference between APR
and APY.

For example, when you take a loan on a credit card with 24% APR (monthly), you’ll need to pay
2% per month. However, if you end up compounding that 2% over the course of 12 months,
you’ll see that the APY is actually 26.8% (1.02^12).

Yield Farming:
Taking advantage of liquidity mining rewards in crypto (DeFi) to generate yield on your crypto
assets

Rug Pull (Hard vs Soft):

A Hard Rug Pull is when the developer takes the funds locked in the protocol and disappears.

A Soft Rug Pull is when the developer disappears and stops working on the project. They don’t
take your funds but the token price will eventually go to zero.

Projects with higher TVL(Total Value Locked) and has been around for a long time are less risky
than projects with low TVL that just launched. AAVE with $20B+ TVL is much lower risk than
some new project called PolyCabbage with $10k TVL, for example.

Harvest:
The act of claiming your farming rewards

Pool1 vs Pool2
Let’s say you’re entering a farm called FarmerTaiki with the $TAIKI token.

“Pool2” is an LP pair like $TAIKI-$ETH that pays out high rewards in $TAIKI.
“Pool1” is an LP pair like $ETH-$USDC that pays out lower rewards in $TAIKI.

Since Pool2’s are risky, they receive higher rewards. Pool1’s are less risky, so they receive less
rewards. Beware token inflation.