If you have been looking for new ways to earn more profits on your crypto assets, you probably would’ve heard of yield farming. In essence, yield farming is all about staking or lending one’s crypto assets in an attempt to generate high returns or rewards in the form of additional cryptocurrency. Yield farming can also be carried out through other methods like arbitraging, providing liquidity, and margin trading. Despite DeFi (decentralized finance) being a concept in its nascent stages, this unique and innovative application of DeFi has already skyrocketed to great levels.
Yield farming protocols place liquidity providers (LPs) at the center of a smart contract-based liquidity pool with an incentive to stake or lock up crypto assets. The incentives may be in the form of percentages of transaction fees, interest from lenders, or even a governance token. This yield is then expressed as an annual percentage yield (APY). APY is basically the rate of return gained over a year on a specific investment. When more investors contribute funds to the related liquidity pool, the returns issued decrease in value.
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Yield Strategies on Delta Exchange
Excited about the prospects of yield farming? We’re pretty sure you’re now looking to try it out. Well, look no further than Delta Exchange, a one of its kind crypto derivatives platform that allows traders to grow their cryptocurrencies. Because DeFi is permissionless by nature, anyone from anywhere can join the network and participate in yield farming. Here are the various yield strategies available on Delta Exchange.
Enhanced yield BTC
The Enhanced Yield BTC strategy aims to increase the yield on BTC holdings by selling BTC at a higher price (strike price) on a specific date (expiry date).
This product is best suited for investors that feel Bitcoin’s gain is limited in the short term and are ready to sacrifice Bitcoin’s upside beyond a strike price at the product’s expiration. As a result, if you anticipate Bitcoin will not rise over the strike price before the expiration date, you can employ the enhanced yield BTC strategy to receive a higher return on your Bitcoins.
You can also exit the product at any moment by accepting the yield calculated using the price at the time of exit. Note, however, that the investor’s assets and yield gained remain locked and will only be unlocked when the product is exited or matured.
Under this strategy, the annualized yield calculated is determined by the following formula:
Y= [(P/S0) x (365/T) x 100] %
where,
P is the premium on the option,
T is the time to maturity, and
S0 is the price of Bitcoin at the time of entry.
At the time of writing, the projected APY for this strategy is 62.6%, with a strike price of 50000 on BTC.
Enhanced yield ETH
The enhanced yield strategy for ETH futures earns yields by writing monthly call options. While writing the contract, the premium is converted to ETH, and the position is squared off on the expiry date. If the options are settled with money in this strategy, a payout is made equal to (ETH price – Strike Price)/ ETH Price.
The current value of one’s investment will be calculated as follows:
Current value = initial investment + premium received – potential payout in case of square off of position.
It is important to note that all contributions and withdrawals to this strategy must be made in ETH.
The projected APY for this strategy is 37.5%, with a strike price of 3700. Furthermore, because the notional amount equal to the value of ETH is written, there is no risk of liquidation with this method. However, if there is a significant upward movement in the price of ETH, and the expiry price settles above the strike price, this strategy may lose money. In a downtrending market, this strategy is expected to perform well.
Enhanced yield USDT
In the enhanced yield strategy for USDT futures, writing monthly put options generates the yields. When writing a trade, the premium is usually paid in USDT, and the position is squared off on the expiration date. If the options are settled with money, a payout will be made equal to (Strike Price- ETH Price)/ ETH Price.
The current investment value is computed as follows:
Current value of investment = initial investment + premium received – potential payout in case of square off of position.
All deposits and withdrawals for this strategy must be made in USDT. Because a notional amount equal to the USDT value is written, this strategy has no liquidation risk. However, traders who use this method risk losing money if the price of ETH falls sharply and the expiry price falls below the strike price. As a result, this method is more likely to succeed in an up-trending market.
The projected APY for this strategy is 30.9%, with a strike price of 2500.
Delta Exchange Offers
Delta Exchange has a lot of ongoing offers to encourage both new and existing users. Some major offers include:
- $30,000 Bonus on deposit of $100,000 or more
- Upto $500 Bonus on First deposit
- $100 worth DETO Free on First Trade in 7 days of signup.
You can find complete details about these offers here: https://www.delta.exchange/offers.
Choose Delta, Choose Growth!
When getting to crypto trading, everyone’s ultimate goal is to make substantial profits, so if you have been looking to grow your crypto, Delta is your best choice. Being a superior crypto derivatives exchange, Delta offers various innovative products like Robo strategies, MOVE options, futures, options, calendar spreads, Interest Rate Swaps, and much more.
To learn more about Delta, follow them on Twitter, Facebook, Telegram, and Medium.