Farming or Staking? Or both?
This guide will present a strategy that highlights amazing interactions between Mai Finance, QuickSwap and Adamant after the launch of new LP pools on Mai Finance and QuickSwap.
When you are using DeFi (Decentralize Finance) applications, especially when you are farming yields, you tend to end up with a bunch of native tokens granted by the farm. If most people are simply selling these tokens to buy more or their favourite coins, we will try to showcase some ways to actually keep and put them to work in order to increase your revenues.
In order to do so, we will use new LP pools (Liquidity Providing pools) launched on QuickSwap at the beginning of September 2021, that are using the Qi token from Mai Finance. If you need to get a good idea of what are QuickSwap and Adamant applications, please read the Stacking DApps guide.
In order to maximize our gains, we will use 3 different applications
- Mai Finance
We will also be using the following LP pools
- Qi/MATIC on Mai Finance to generate Qi
- Qi/WETH on QuickSwap to generate QUICK and ADDY
- Qi/QUICK on Adamant to generate ADDY and MATIC
You can already see that each application is generating tokens that can feed the other pools used on the other applications. The idea is to use the Qi tokens harvested on Mai Finance in combination with the QUICK tokens harvested on QuickSwap and use the 2 on Adamant. Adamant will generate ADDY tokens that will let you claim MATIC dividends. The MATIC tokens can be locked on Mai Finance in the WMATIC vault to borrow MAI, and then buy MATIC and WETH that can then be used with Qi tokens to increase your positions on both Mai Finance and QuickSwap.
You also need to know that tokens generated in excess on Mai Finance and QuickSwap can be staked:
- Qi on Mai Finance AND QuickSwap can be used to vote on QIP (QiDAO Improvement Proposals).
- Qi on Mai Finance can be locked. If you lock your Qis, you become eligible to protocols dividends that are paid in Qi and distributed every Wednesdays. More details on Qi staking soon.
- QUICK on QuickSwap can also be staked to generate additional QUICK tokens in the Dragon's Lair.
- locked QUICK (dQUICK) can also be used on QuickSwap to generate other tokens in the Dragon's Syrup, and the one we will be using is the farm generating ADDY tokens.
- ADDY on Adamant are automatically vested (locked for 90 days), but will generate WMATIC dividends.
- ADDY on Adamant can also be locked in order to boost your APRs/APYs (Annual Percentage Rewards / Annual Percentage Yield) on the pools you entered on the site, as well as generating more ADDYs, and boosting your MATIC dividends.
What follows is a simulation made with an initial investment of $1,000 worth of Qi/MATIC and Qi/WETH LP tokens, and the current APRs / APYs given by the different platforms on September 9th 2021. This is not a real application of what we described above. Rates will vary, token prices will vary, some programs will come to an end etc ... so the final results are just an estimation of what you could get if everything remained stable, which will never be the case.
ATTENTION: The pools used in this guide went live a few hours prior to the publication. APRs and APYs are obviously not going to stay the same, and some revision to the document will be made in a few days. Please, DYOR and take the guide with caution.
Since we have $500 worth of Qi/MATIC LP tokens and $500 of Qi/WETH LP tokens, we will deposit them on Mai Finance and QuickSwap. As a side note, if you have a preference for Qi or QuickSwap, you can simply put more LP tokens on one or the other platform to generate more of your favourite token and stake more. For our example, we'll stick to a strict 50% split.
- $500 of Qi/MATIC will be on Mai Finance, with an APR of 1160.65%
- $500 of Qi/WETH will be on QuickSwap, with an APR of 1817.44%
We will also use the following APRs for the rest of the simulation
- dQUICK APR from Dragon's Lair is 17.28%
- ADDY APR from Dragon's Syrup is 17.08%
- Qi/QUICK APR on Adamant for auto-compounded LP tokens is 133%
- Qi/QUICK APR on Adamant for ADDY tokens is 131%
- WMATIC APR on Adamant is 35% of the locked ADDY tokens
Because the APR on Mai Finance is lower than the one on QuickSwap, we will be using 100% of the Qi generated on Mai Finance to generate additional Qi/QUICK tokens (not selling but combining with QUICK tokens received on QuickSwap), meaning that at the end of the day, we have 0 Qi left. Of course, if you balance your initial investment differently, you could get remaining Qi and 0 QUICK left.
Hence, at the end of Day 1, we have in our portfolio
On Day 2, the dQUICK deposited on QuickSwap's Dragon's Syrup starts generating ADDY tokens, as well as the Qi/QUICK LP pair on Adamant. At the end of Day 2, we would get
Don't forget to claim your rewards daily on Adamant in order to start generating WMATIC dividends!
On Day 3, the ADDY tokens collected on Adamant will start generating WMATIC dividends. This means that at the end of Day 3, we would get in our portfolio
Starting on Day 4, we will be able to
- collect the WMATIC dividends
- deposit a portion of the WMATIC on Mai Finance and borrow MAI against it
- sell MAI to buy more WETH
- pair the remaining MATIC with Qi, and the WETH with some more Qi generated on Mai Finance
- deposit the additional Qi/WMATIC pair on Mai Finance and the Qi/WETH pair on QuickSwap
At that point, the farming system is fully primed, and we can start estimating revenues.
The daily routine is composed by the following transactions
- Harvest Qi on Mai Finance
- Harvest WMATIC on Adamant
- Deposit 66% of WMATIC on Mai Finance
- Borrow MAI for 50% of the deposit
- Swap MAI for WETH
- Create Qi/WMATIC pair on QuickSwap
- Deposit the Qi/WMATIC on Mai Finance
- Create Qi/WETH pair on QuickSwap
- Deposit the Qi/WETH on QuickSwap
- Harvest Quick on QuickSwap
- Create Qi/QUICK pair on QuickSwap
- Deposit remaining QUICK on Dragon's Lair
- Deposit dQUICK on Dragon's Syrup
- Harvest ADDY token from Dragon's Syrup
- Harvest ADDY token from Adamant
- Deposit new Qi/QUICK on Adamant
- Deposit harvested ADDY on Adamant (lock)
After a complete year, the final state of our investment would be
Note that the ADDY that have been generated via the QuickSwap farm haven't been harvested daily and added to boost the ADDY rewards on Adamant in this simulation (it is already complex enough). Also, we are only taking in account vested ADDY. After the initial vesting period of 90 days, if you claim the ADDY tokens and lock them, you will boost your ADDY rewards even more, and generate more WMATIC.
Finally, after one year, the generated revenue is worth $51,580.50. If we consider the initial investment was $1,000 worth of Qi/MATIC and Qi/WETH, this leads to a final APY of 5,087.39%.
This guide is definitely not financial advice, it was made with an educational goal in mind. You need to pay attention to price variations, supply and demand, reward programs end dates, impermanent losses etc ... The goal wasn't to propose recipes that can be followed blindly, so please do your homework and your own simulation, and only invest what you're ready to possibly lose.
Keep in mind that a strategy that works well at a given time may perform poorly (or make you lose money) at another time. Please stay informed, monitor the markets, keep an eye on your investments, and as always, do your own research.