A couple of examples

• Reaper Farm: allows you to farm LP positions from Spookyswap. Rewards are automatically added on as extra LP tokens to your existing position

• Liquid Driver: collects your LP tokens and then pays out your reward in $LQDR tokens which you can stake for $xLQDR to collect yields for coins across the FTM ecosystem.

Insurance

• Given DeFi is the wild wild west and there’s no customer support to help you if things go wrong, insurance is worth considering if you have positions you want some extra protection for. That being said, look into the fine print for these various insurance solutions, as they all have different nuances.

Staking: n/a for single-sided staking on Aurora

Borrowing: n/a (when I first started this, but a lot of new things have launched)

Yield farming: Vaporwave

Insurance: n/a

Start playing with a few protocols on the chain

1. Start by exploring a few of the protocols to see what features exist

   1. I picked out a few that I thought were most interesting and got a sense of what they offered:

      1. Trisolaris: ability to trade and swap most tokens on ETH and Terra, ability to add LP, stake $tri earnings from farming

      2. Rose: LP pools for stablecoins and ability to farm $rose, and ability to stake $rose with a slight lockup

      3. Vaporwave: primarily accepted LP tokens from all of the exchanges on Aurora

2. Deposit $10 to play around with the different chains and assess how fast/slow depositing is, test the ability to deposit and withdraw, etc

   1. You can skip this step if you’re not interested in investing, but I had a hunch I was interested, so I tried some small test transactions to see how it’d work.

   2. The first thing to do is always figure out how to get gas money on the new chain. Crypto is not as optimal as it should be, and you don’t want your funds to get stuck on a chain without gas to run transactions! Fortunately, at the time, Aurora actually had zero gas fees which made it a no brainer to play around with. Many chains offer faucets where they’ll drip out a small amount of the token to get you started with your first swap. You can also sometimes get token bonuses from some bridges (e.g. Multichain) that get you started.

   3. Once you have gas money, figure out what makes sense for you. I bridged my money from Terra to Aurora using the bridgooooors guide. Then swapped to a few tokens to open some small LP pools to see how yield accumulated.

   4. My initials observations were:

      1. Transactions were pretty fast. Didn’t have to wait more than a few min to see transactions go through. No gas was also super nice.

      2. Trisolaris had a bit of a janky refresh experience (though it’s gotten much better since my initial experience in Dec). But hard refreshing (shift + cmd + R) generally got my LP pools to show up

      3. I had some issues with Vaporwave, but the community was pretty helpful, and they generally suggested using a VPN for Aurora transactions to run more smooothly

Figure out how to track prices, common liquidity pairs, and expected yields

1. Figure out how to track prices (for some of these newer alt L1s, their tokens may not be available on Coinmarketcap or Coingecko). Dexscreener is a good tool for this.

   1. This was the first chain I used where Coinmarketcap/Coingecko were not sufficient for me to find token prices. I popped into one of the discords and asked around and learned about Dexscreener, which has fantastic coverage across most chains. I then used Dexscreener to get basics stats like token prices, market cap, FDV, etc.

2. Using Dexscreener, get a sense of the common liquidity pools so you can figure out how to actually exchange your coins

   1. This was another step I didn’t expect. Given the nascency of the ecosystem, I was curious about how I could acquire some $rose. At the time, $rose only had liquidity on Nearpad and not Trisolaris, which threw me off since I was used to coins being generally liquid across most AMMS on Ethereum.

   2. You can use Dexscreener to see where different liquidity pools are and figure out the most optimal way of exchanging tokens while minimizing slippage.

3. Map out expected yields for different actions (e.g. staking, LPing) so you can see if it’s worth your time to farm

   1. Finally, figure out the rough yields and if they make sense

      1. At the time, Trisolaris was yielding btwn 100-200% APR on a few liquidity pool pairs, Rose was doing 80% for Rose <> FRAX LPing, and Vaporwave was compounding some of these DEX LPs.

      2. A 150% APR roughly works out to about 0.4% per day. Even with impermanent loss, about 2 weeks in that pool assuming a 2x change in price difference would make up the loss.

         1. 2x change in price = 5.7% loss (more on impermanent loss here)

         2. 0.4% earned per day * 14 days = 5.6% earned

      3. Map out these different yields and see if they make sense for you. Generally yields that are >200% are very attractive, though they might not stick around, and even btwn 100-200% are still fantastic. But again, it depends on what your goals are.

Make a call on if you want to farm or not

1. I feel strongly that one shouldn’t copy trade in DeFi because everyone’s financial situation, goals, and risk tolerances are incredibly different. But, I’ll share the framework that I use when I think about this.

2. To make a call on farming, I figure out:

   1. Strategic questions:

      1. Ecosystem/protocol investment narrative

         1. Is there a narrative that makes sense for this chain? e.g. P2E, L2s, etc are popular narratives right now

         2. Is the tech unique in some way? Does the L2 solve for something with a novel solution? Unless you are choosing to farm in a chain and then immediately sell out profits and leave, you are implicitly making a call on if you believe in the chain long run.

      2. Ecosystem/protocol team

         1. Is the team good? Doxxed? Experienced? The decision to yield farm requires a decision at both the ecosystem and protocol level. Make sure you feel good about the people who are building the solutions that you’re locking your money into.

      3. Ecosystem/protocol community

         1. How’s the community? Given the importance of community in web3, it’s worth seeing if the community is helpful, thoughtful, etc. Also pro tip: you can often pick up some interesting ecosystem alpha in the Discords for protocols, since you have a group of passionate people about a specific topic.

   2. Execution questions:

      1. What the right entrypoint is

         1. While the general adage is time in market > timing the market… I have increasingly believed that if you are thinking about investing daily, this is not true. Entrypoints matter. For example, $PTP on Avalanche launched, pumped to almost $15, and then dropped down to stabilize at $2-3. I like the protocol a lot, but recovering from an entrypoint at $15 vs $2 is non trivial. Think about what makes sense. You can put in small investment to get start farming if you’re not happy with the price point, etc.

      2. Expected yield to risk

         1. 100-200% APRs are extremely tempting, but think about overall protocol risk, how mature the protocol is, etc, and other risk factors to weigh if the yield is worth the risk.

         2. For example, when I first started, Vaporwave’s TVL was so minuscule and no one CT was talking about them that while I wanted auto compounding vaults because I didn’t want to harvest myself, I was pretty skittish about putting my money in. I ended up rationalizing it by putting in a very small chunk to see how it went, and then readjusted the position over time.

         3. APRs can also swing a lot. I remember seeing the UST <> USDC pool on Pangolin when it first launched at 50% APY. After a few days, that pool is now XX. Not all yields last, and if you have to do a lot of bridging and swapping to work, it may not be worth it.

         4. There’s no formula here since risk is subjective to the investor. But generally, I’d optimize for decisions where you don’t need to look at your charts every day and just feel terrible if you see any drops. It’s too stressful otherwise.

      3. Expected time horizon

         1. Time horizon matters a lot, especially if you’re thinking about LP pools. If you want to sell at every drop, then the frustration of impermanent loss could deter you from LPing. Try single-sided staking instead. If you would have held the coin throughout the drops since you’re not a day trader, then LPing could make sense.

         2. Think about if you are planning to open this position with a short vs a long term time frame.

A couple of examples

• Reaper Farm: allows you to farm LP positions from Spookyswap. Rewards are automatically added on as extra LP tokens to your existing position

• Liquid Driver: collects your LP tokens and then pays out your reward in $LQDR tokens which you can stake for $xLQDR to collect yields for coins across the FTM ecosystem.

Insurance

• Given DeFi is the wild wild west and there’s no customer support to help you if things go wrong, insurance is worth considering if you have positions you want some extra protection for. That being said, look into the fine print for these various insurance solutions, as they all have different nuances.

Staking: n/a for single-sided staking on Aurora

Borrowing: n/a (when I first started this, but a lot of new things have launched)

Yield farming: Vaporwave

Insurance: n/a

Start playing with a few protocols on the chain

1. Start by exploring a few of the protocols to see what features exist

   1. I picked out a few that I thought were most interesting and got a sense of what they offered:

      1. Trisolaris: ability to trade and swap most tokens on ETH and Terra, ability to add LP, stake $tri earnings from farming

      2. Rose: LP pools for stablecoins and ability to farm $rose, and ability to stake $rose with a slight lockup

      3. Vaporwave: primarily accepted LP tokens from all of the exchanges on Aurora

2. Deposit $10 to play around with the different chains and assess how fast/slow depositing is, test the ability to deposit and withdraw, etc

   1. You can skip this step if you’re not interested in investing, but I had a hunch I was interested, so I tried some small test transactions to see how it’d work.

   2. The first thing to do is always figure out how to get gas money on the new chain. Crypto is not as optimal as it should be, and you don’t want your funds to get stuck on a chain without gas to run transactions! Fortunately, at the time, Aurora actually had zero gas fees which made it a no brainer to play around with. Many chains offer faucets where they’ll drip out a small amount of the token to get you started with your first swap. You can also sometimes get token bonuses from some bridges (e.g. Multichain) that get you started.

   3. Once you have gas money, figure out what makes sense for you. I bridged my money from Terra to Aurora using the bridgooooors guide. Then swapped to a few tokens to open some small LP pools to see how yield accumulated.

   4. My initials observations were:

      1. Transactions were pretty fast. Didn’t have to wait more than a few min to see transactions go through. No gas was also super nice.

      2. Trisolaris had a bit of a janky refresh experience (though it’s gotten much better since my initial experience in Dec). But hard refreshing (shift + cmd + R) generally got my LP pools to show up

      3. I had some issues with Vaporwave, but the community was pretty helpful, and they generally suggested using a VPN for Aurora transactions to run more smooothly

Figure out how to track prices, common liquidity pairs, and expected yields

1. Figure out how to track prices (for some of these newer alt L1s, their tokens may not be available on Coinmarketcap or Coingecko). Dexscreener is a good tool for this.

   1. This was the first chain I used where Coinmarketcap/Coingecko were not sufficient for me to find token prices. I popped into one of the discords and asked around and learned about Dexscreener, which has fantastic coverage across most chains. I then used Dexscreener to get basics stats like token prices, market cap, FDV, etc.

2. Using Dexscreener, get a sense of the common liquidity pools so you can figure out how to actually exchange your coins

   1. This was another step I didn’t expect. Given the nascency of the ecosystem, I was curious about how I could acquire some $rose. At the time, $rose only had liquidity on Nearpad and not Trisolaris, which threw me off since I was used to coins being generally liquid across most AMMS on Ethereum.

   2. You can use Dexscreener to see where different liquidity pools are and figure out the most optimal way of exchanging tokens while minimizing slippage.

3. Map out expected yields for different actions (e.g. staking, LPing) so you can see if it’s worth your time to farm

   1. Finally, figure out the rough yields and if they make sense

      1. At the time, Trisolaris was yielding btwn 100-200% APR on a few liquidity pool pairs, Rose was doing 80% for Rose <> FRAX LPing, and Vaporwave was compounding some of these DEX LPs.

      2. A 150% APR roughly works out to about 0.4% per day. Even with impermanent loss, about 2 weeks in that pool assuming a 2x change in price difference would make up the loss.

         1. 2x change in price = 5.7% loss (more on impermanent loss here)

         2. 0.4% earned per day * 14 days = 5.6% earned

      3. Map out these different yields and see if they make sense for you. Generally yields that are >200% are very attractive, though they might not stick around, and even btwn 100-200% are still fantastic. But again, it depends on what your goals are.

Make a call on if you want to farm or not

1. I feel strongly that one shouldn’t copy trade in DeFi because everyone’s financial situation, goals, and risk tolerances are incredibly different. But, I’ll share the framework that I use when I think about this.

2. To make a call on farming, I figure out:

   1. Strategic questions:

      1. Ecosystem/protocol investment narrative

         1. Is there a narrative that makes sense for this chain? e.g. P2E, L2s, etc are popular narratives right now

         2. Is the tech unique in some way? Does the L2 solve for something with a novel solution? Unless you are choosing to farm in a chain and then immediately sell out profits and leave, you are implicitly making a call on if you believe in the chain long run.

      2. Ecosystem/protocol team

         1. Is the team good? Doxxed? Experienced? The decision to yield farm requires a decision at both the ecosystem and protocol level. Make sure you feel good about the people who are building the solutions that you’re locking your money into.

      3. Ecosystem/protocol community

         1. How’s the community? Given the importance of community in web3, it’s worth seeing if the community is helpful, thoughtful, etc. Also pro tip: you can often pick up some interesting ecosystem alpha in the Discords for protocols, since you have a group of passionate people about a specific topic.

   2. Execution questions:

      1. What the right entrypoint is

         1. While the general adage is time in market > timing the market… I have increasingly believed that if you are thinking about investing daily, this is not true. Entrypoints matter. For example, $PTP on Avalanche launched, pumped to almost $15, and then dropped down to stabilize at $2-3. I like the protocol a lot, but recovering from an entrypoint at $15 vs $2 is non trivial. Think about what makes sense. You can put in small investment to get start farming if you’re not happy with the price point, etc.

      2. Expected yield to risk

         1. 100-200% APRs are extremely tempting, but think about overall protocol risk, how mature the protocol is, etc, and other risk factors to weigh if the yield is worth the risk.

         2. For example, when I first started, Vaporwave’s TVL was so minuscule and no one CT was talking about them that while I wanted auto compounding vaults because I didn’t want to harvest myself, I was pretty skittish about putting my money in. I ended up rationalizing it by putting in a very small chunk to see how it went, and then readjusted the position over time.

         3. APRs can also swing a lot. I remember seeing the UST <> USDC pool on Pangolin when it first launched at 50% APY. After a few days, that pool is now XX. Not all yields last, and if you have to do a lot of bridging and swapping to work, it may not be worth it.

         4. There’s no formula here since risk is subjective to the investor. But generally, I’d optimize for decisions where you don’t need to look at your charts every day and just feel terrible if you see any drops. It’s too stressful otherwise.

      3. Expected time horizon

         1. Time horizon matters a lot, especially if you’re thinking about LP pools. If you want to sell at every drop, then the frustration of impermanent loss could deter you from LPing. Try single-sided staking instead. If you would have held the coin throughout the drops since you’re not a day trader, then LPing could make sense.

         2. Think about if you are planning to open this position with a short vs a long term time frame.