You have heard about Moonbeam — an ETH-compatible smart contract parachain on Polkadot, which can be used to interoperate dApps across other parachains. If you’re a DOT holder and would like to put your capital to use, investing DOT on Moonbeam has never been easier, even though DOT is not an ERC20 token that is directly compatible. Moonbeam offers a quick solution to swapping your holdings to xcDOT, this way opening the door to the world of robust and high-yielding DeFi services that are both safe and easy to use. We’ll be reviewing the top dApps that are a must-have for you to consider investing in!
LIDO liquidity stacking program
With the integration of this DeFi app on Moonbeam, DOT holders now have access to such a cool feature as liquidity stacking, which allows to stake and use tradable tokens at the same time. You begin staking your DOT by converting it to an equivalent in xcDOT (an XC-20 token) via the Transfer tab on your Moonbeam account. Make sure that you also have some amount of GLMR (native Moonbeam token) reserved for originating such transactions. After that you simply deposit your xcDOT through LIDO dApp and receive stDOT in return. stDOT is a liquid token that represents your share of the total xcDOT pool that you’ve delegated to LIDO, and this token can now be used in DeFi. Best thing is that you don’t need to wait for any delegation or activation steps to be completed, which usually happens in traditional stacking.
Your liquid token comes with an array of awesome features. First off, these tokens are rebasable, meaning you’re earning daily rewards on the total value invested without any bonding delay. What’s more intriguing is that your ROI is maximized through dynamic reallocation, which delegates your holdings only to the most profitable DOT validator nodes. This provides an extra layer of security to your holdings, as staking providers do not control your funds directly. If you wish to unstake your liquid tokens, the Polkadot unbounding comes with a 30 day time wait period, so it’s best to simply trade your stDOT for xcDOT on an exchange.
DeFi offerings on Moonbeam
If you’d like to get a taste of the best DeFi services on Moonbeam, then hold your wallets…..that is put them to a good use! StellaSwap is the leading DeFi gateway that unites a multitude of DeFi services in one place. Again, you’d first have to make a swap of your DOT holdings and deposit xcDOT, which opens a number of pathways: you can generate yields by staking your xcDOT across different farms, or you can the NFT route and trade unique collectables on Stella’s marketplace. Moreover, you’ll have access to fresh IDO launches on Moonbeam meaning you can invest the smart way by sticking with the proven projects and collecting good returns through token sales.
Stablecoin liquidity
We’ve talked about Polkadot 30-day unbounding period, which can be used for unstaking your liquid tokens (stDOT). A much faster way would be to swap your liquid tokens to xcDOT on an exchange, and this is exactly the application of Curve Finance. It’s a decentralized liquidity pool that can be used to quickly swap back to stablecoins with minimal price slippage (100x smaller). Afterwards you can put to use your xcDOT holdings in Curve’s multi-stablecoin savings account by providing liquidity to interest-bearing assets, and which can yield up to 300% APR according to simulations. Pretty neat, considering there are no middlemen and order books involved!
Lending & borrowing on Moonbeam
Want to put your assets to use in a secure way and with a high return rate? **Moonwell **— is an open lending and borrowing DeFi protocol developed on Moonriver. The sister network that acts as a sandbox to improve security and user experience of dApps before they are launched on the mainnet. That’s where the security perks come in play — top security firms audit and provide Moonwell’s smart contract support. Another great thing about Moonwell is that it’s well-adapted user interface is intuitive and easy to use. To further support this the team has also prepared a vast database of user manuals and detailed explanations of terms that will clear out any questions that you may have regarding the process. While being transparent and community-driven, this service offers excellent yield on lending your funds, with up to 40% APY on some coins.
Portfolio management
Sometimes tracking your investments can go over your head, which is why it’s a good idea to have an overview of your assets in a portfolio manager. Remember the liquid stacking on Moonbeamwe’ve covered in the beginning? DeBank, which provides data and analytics for all your DeFi investments, has recently extended the support to include LIDO. You may now enjoy the benefit of keeping track of all your staked DOT, as well as its liquid counterpart that you can freely use across the DeFi infrastructure.
Now that we‘ve covered an array of different investing routes, it‘s up to you as an investor to pick the option that is most suitable to you in terms of risk and reward ratio. Cryptocurrency market has suffered huge volatility spikes during Q2, so it’s always advisable not to hold all of your eggs in one basket. Happy investing on Moonbeam!