Farming MAI on SolarBeam
Solarbeam has a MAI-MOVR farming pool with nice a APR. Today we will see how to take advantage of it.
Most of the tutorials presented in this guide are using stable coins as starting position. This is mostly du to the fact that stable coin pairs are not impacted by impermanent loss nor volatility of other assets. It is then almost impossible to lose your initial, and you can use more risky strategies with the gains from your stables to increase your gains.
Today, we're trying another approach on Moonriver with Solarbeam, currently the only application that uses MAI. The LP (Liquidity Providing) pair there is MAI-MOVR. MAI is the stable coin from Mai Finance that you will be able too bridge to Moonriver or mint from a vault, and MOVR is the native gas token of Moonriver. As such, MOVR will always have some kind of utility and should never go down in prce too drastically. This is not a stable pair, but the only variable part of the token is linked to MOVR, which makes it a good starting point anyway.
Let's see how we can generate some very high yields with a closed feedback loop on Moonriver without dumping too many farm tokens on the go.
Solarbeam is the first and main DEX (Decentralized EXchange) and AMM (Automatic Market Maker) on Moonriver, and the second application in terms of TVL on the chain. It's also the very first Moonriver partner of Mai Finance and offers a MAI-MOVR pool that gets rewarded with some of their native token, the SOLAR token. This is also the place where you'll find some liquidity for MAI.
MAI-MOVR pool on Solarbeam as of December 2021
The APR (Annual Percentage Rate) of 84% is quite high due to the low usage of the pool, which also makes it a perfect starting point for our strategy. You will get this APR (corresponding to 131% APY if you want to compare to something like MAI-WMATIC on QuickSwap for reference) and the reward will be paid in SOLAR tokens. As of December 2021, 1 SOLAR = 3.78 USDC.
Most Uniswap forks are now proposing staking for their native token, and Solarbeam is doing it too. You can either stake your SOLAR into a Vault to get more SOLAR, and depending on the length of your lock, you'll get very interesting rates (up to 200% APR for a 30 days lock), but we will be using staking to earn external tokens. Indeed, you can stake your SOLAR tokens to receive a bunch of other tokens from different apps on Moonriver, and the one we're looking for is the ROME token.
Staking SOLAR token to earn ROME tokens on Solarbeam
You will notice that the ROME pool is the one with the lowest APR, but it's still quite high, and you will soon see that our ROME tokens will multiply at a crazy rate.
Rome DAO is another big player on Moonriver. It's an Ohm-fork (Olympus DAO copy) that uses the ROME token as native token. You will be able to stake your ROME tokens on the application in order to get very high returns. The goal of each Ohm-fork is to have as much native token staked and attract liquidity to be able to sustain the emission. If you need more details on Ohm-forks, please check our tutorials on Klima DAO for Polygon.
Staking ROME tokens on Rome DAO for 771% APR as of December 2021
Because we'll get ROME tokens from Solarbeam, we should be able to stake them on Rome DAO and the rebase system will get you a lot more very quickly. For this strategy, we will stake ROME tokens on Rome DAO and sell 50% of the daily reward, which is currently corresponding to ~1% of the deposit on Rome DAO.
Mai Finance is a lending platform where you'll be able to deposit your crypto assets and borrow the MAI stable coin at 0% interest. The only fee that will ever be charged on Moonriver is the repayment fee of 0.5% of your loan.
ETH vault on Moonriver with a lot of MAI available
For our strategy, we will be using a ETH vault. The ROME token that will be extracted from the Rome DAO staking pool will be split as follows:
- 33% will be swapped to MOVR using the swap feature on Solarbeam
- 66% will be swapped to ETH using the swap feature on Solarbeam
You will then be able to deposit the ETH on Mai Finance to borrow MAI with a CDR (Collateral to Debt Ratio) of 200% to stay in the safe zone and try to prevent liquidation. The MAI borrowed will then be used to create additional MAI-MOVR LP tokens that will then be added to the initial position on Solarbeam.
As an example, for each $1 of ROME that you extract from Rome DAO we will get
- $0.33 of MOVR
- $0.66 of ETH deposited on Mai Finance
- $0.33 of MAI borrowed against our ETH
- $0.66 worth of MAI-MOVR LP token to add to Solarbeam
The following simulation is made by assuming a few different things:
- All rates and prices remain the same for the entire period of the simulation, 1 year in our case
- 84% APR on MAI-MOVR farming on Solarbeam
- 108% APR on staking SOLAR to farm ROME tokens
- 771% APR on Rome DAO when staking ROME tokens
- All rewards and programs are also running for an entire year
- 50% of the daiy gains on Rome DAO is sold for 33% MOVR and 66% ETH
- The initial investment is $100 worth of MAI-MOVR LP token
On day 1, you would simply deposit your $100 worth of MAI-MOVR on Solarbeam and will harvest your SOLAR tokens at the end of the day. This would give you the following result:
On day 2, you'd keep your MAI-MOVR position to farm more SOLAR, but you will also stake your first harvest of SOLAR token in order to start collecting some ROME tokens. At the end of day 2, you would get:
At the beginning of day 3, you should be able to harvest your first few ROME tokens from the 50% daily staking reward. It's probably not a good idea to do it on day 3 with only an initial of $100 because the amount is quite unsignificant, but still. You will sell 33% for MOVR and 66% for ETH that you will deposit your vault on Mai Finance, then borrow MAI against your new collateral.
At this point the system is fully bootstrapped.
Once the system is fully prepared, here's your daily routine
- harvest SOLAR from the MAI-MOVR pool
- stake the SOLAR tokens you just earned
- harvest the ROME tokens from the SOLAR staking pool
- stake your freshly acquired ROME tokens
- unstake 50% of your daily gains on Rome DAO (corresponds to ~1.5 rebase)
- sell 66% of your ROME tokens for ETH
- sell 33% of your ROME tokens for MOVR
- deposit ETH in the ETH vault on Mai Finance
- borrow 50% of your deposit as MAI stable coin
- pair the borrowed MAI with the MOVR tokens
- deposit your additional MAI-MOVR tokens
After a complete year of farming, you would have
- $239.633 worth of MAI-MOVR on Solarbeam
- $106.358 worth of SOLAR tokens on Solarbeam
- $263.708 worth of ROME tokens staked on Rome DAO
- $141.450 worth of ETH on Mai Finance
- $68.817 worth of MAI debt on Mai Finance
The additional MAI-MOVR doesn't fully correspond to the debt since we're using a third of the swapped ROME tokens to get half of the new LP tokens.
This loop would thus give you an equivalent APY of 583.15% from a relatively stable initial position.
The main things to understand from this strategy are that Moonriver is currently under-used and reward rates are very interesting. Also, as soon as you throw a Ohm-fork in your strategy to re-invest a portion of your gains, the reward rates are so insane that you will make a very important profit as long as you keep enough tokens in the DAO to generate staking rewards.
Keep in mind though that projects will have variable reward rates that will not be guaranteed over the span of one year. Please make sure you understand all the project you're investing in, do your own research and make sure to invest only what you may be ready to loose. Because this strategy is investing on a relatively stable initial, the only thing that is at risk in here are the benefits from other systems. This guide cannot be taken as an endorsement of the projects it uses.