The days of speculating on meme coins and governance are past us. Now the majority of the crypto investing community look for projects that will produce sustainable revenue and give value to holders.
Here are 10 best DeFi projects to earn real yields from.
What is Real Yield?
Real yield is a yield that comes from the generation of real revenue. The alternative of real yield is yield generated from ponzi schemes. Such yields are not sustainable and they tend to die out a few hours-to-days after the launch of the yield farming protocol.
Most DeFi projects launching currently are aimed at small but sustained APYs. The effects of ponzi defi farming protocols was that the humongous natoive token emissions led to a drastic drop in the price of the token as everyone rushed to sell them for profit.
In real yield, what is shared among the yield farmers is the protocol profits. This way, if the protocol is profitable, the users get a large APR. For instance, GMX, the number 1 perpetual DEX on Arbitrum, has been massively profitable since its launch. The protocol has sustained its APR at about 18% for the longest time, showing that it is a real yield DeFi protocol.
Apart from GMX, here are the 10 best Real Yield Protocols to try out in 2023 and beyond.
#1. Umami Finance
Umami Finance is a first mover in Real Yield Defi narrative and works closely with the GMX ecosystem. The protocol is centered around providing access to liquidity and it uses a hybrid model to combine tested and regulatory complaint methods with trustless DeFi protocols. To this end, Umami serves as a middle layer that connects capital providers to Defi protocols.
A good example of this is Umami launching GLP vaults for USDC, ETH and BTC. The APY earned from staking GLP will be passed onto depositors while at the same time hedging out market risk.
Umami is going to deploy more vaults by the end of H1 2023 with a target of hitting over $1 billion TVL.
- Market Cap: $21,000,000
- Current TVL: $35,798.40
- Circulating Supply: (not provided)
- Total Supply: 1,000,000
- Current UMAMI price: $28.17
#2. Mugen Finance
Mugen Finance is a Yield Aggregator also working on the GMX ecosystem and built on Arbitrum. MGN, the native token of Mugen Finance, started with a total supply of 0.MGN. Users can get MGN through a bonding curve using USDC. You deposit USDC into a smart contract and get MGN in return. Bonding as a token generation event (TGE) is one of the best routes to go if a project is looking to become as decentralized as possible in its tokenomics.
Mugen Finance is using Layer Zero technology – the omnichain interoperability protocol. What this means for Umami is that with time, it can become a yield aggregator for protocols on any chain, yes, even for Bitcoin. Umami will be using layerzero technology to enable cross-chain swaps on their platform.
- Market Cap: $2,400,000
- Current TVL: $1,000,000+
- Circulating Supply: 25,564
- Total Supply: 25,564
- Current MGN price: $93.88
#3. Vela Exchange
Vela Exchange is a decentralized exchange that is launching on Arbitrum. The rise of perp DEXs has been fierce but only those that mimic CEXs as closely as possible will make it. Vela exchange does a perfect job to this end. CEXs are preferred even when their security is questionable because they offer position management, and ability to set Take Profits (TPs) and Stop Losses (SLs).
Vela has been hard at work creating the perfect Perp Dex. The platform has risk managed tools, including the above mentioned features. The exchange will support decentralized P2P and OTC trading as well as spot and futures trading.
Furthermore, when DXP (soon to be VELA) holders provide liquidity on the exchange, they receive VLP tokens and get to earn 50% on the fees generated by the protocol. Users can also stake VLP and earn an additional 10% APR on their stake in the form of eVELA tokens.
- Market Cap: $5,486,949
- Circulating Supply: 6,840,767
- Total Supply: 7,000,000
- Max Supply: 100,000,000
- Current DXP price: $0.8021
Unipilot is a liquidity optimizer for Uniswap LPs. To understand how Unipilot works, you first need to understand how the new Uniswap V3 concentrated liquidity program works.
Concentrated liquidity allows users to provide liquidity around a certain specified price. For instance, you can provide liquidity for ETH-USDC pool between $1,200 – $1,400 price range for ETH.
This means that if the price of ETH goes below or above this price range you don’t earn any fees, making it more efficient compared to the old liquidity providing method. If the price moves outside your range you have to adjust your range – something which costs time and money (in form of transactions fees).
Unipilot offers to manage your liquidity for you. Those who stake PILOT, the native token of Unipilot, get 6% APR from the protocol’s revenue share. As TVL grows, this amount will increase.
- Market Cap: $3,200,000
- Current TVL: $2,223,341
- Circulating Supply: 1,190,326
- Total Supply: 10,628,432
- Current PILOT price: $2.78
#5. Leverage Inu Finance
LeverageInu is a Meme Finance project that has created a lot of talk as a First mover on the Arbitrum blockchain. Leverage Inu Finance is a social passive trading protocol that gives its members real yield from profit earned by the protocols. The protocol is powered by LEVI, the native token. So far they have distributed $1,300 to about 500 members (at time of distribution).
LeverageInu works by using fees accrued from Uniswap LP and using the fees to invest in GLP and earn fees from GMX. 20% of the fees is also used to leverage trade on platforms such as GMX, Buffer Finance and soon, Vela Exchange.
From the last distribution, the APR is 3%. However, this can increase drastically as the team continues to build the treasury and as the token continues to be traded on Uniswap.
- Market Cap: $567,000
- Circulating Supply: 970,000
- Total Supply: 970,000
- Current LEVI price: $0.5677
Vincent Munene is a freelance writer and a great blockchain enthusiast. Blockchain has changed his life in terms of financial freedom and in return, he likes to educate people and keep them up to date on everything blockchain. He is a Biochemist by profession and also loves to play the piano.