Articles about #DEFI

Yield Farming Academy #1 Crypto Wallets

29/09/2023

Home | News & Insights Yield Farming Academy #1 Crypto Wallets This is the first lecture in the Yield Farming Academy section from the Leech Protocol. The path of any crypto enthusiast begins with the creation of a wallet. In this lecture we will tell you all about wallets and even more. Sit down comfortably, make yourself a cup of tea and we’ll start our tech journey! Table of Content What is Crypto Wallet and how it works? A cryptocurrency wallet is like a digital safe that allows you to store, manage, and use your cryptocurrencies securely. It’s a tool that helps you interact with the exciting world of digital assets safely and conveniently. When you create a cryptocurrency wallet, you create a unique digital identity for yourself. It’s like having your own virtual bank account but with the benefit of complete control and privacy. A critical aspect of a cryptocurrency wallet is the creation of your private and public keys. The private key is a confidential piece of information that only you should know. It’s like your secret password to unlock your wallet and make transactions. The public key, on the other hand, is like your public address. It’s what you share with others to receive funds. What is Crypto Wallet and how it works? Using a cryptocurrency wallet is as easy as using any other digital tool. Once you’ve set up your wallet, you can check your balances, send funds to others or receive funds. When you initiate a transaction, your wallet digitally signs it with your private key to prove that you’re the rightful owner of the funds. This signature is then broadcasted to the blockchain network, where it gets verified and added to the decentralized ledger. This way, you can be confident that your transactions are secure and transparent. In addition, it’s impossible to reveal your private key from the signature. It’s important to note that different types of cryptocurrency wallets are available on the market. Some wallets are custodial, meaning they are provided by third-party services that manage your private keys on your behalf. Others are non-custodial, which means you have complete control over your keys and funds. Another critical point in understanding how wallets work is that your assets are not stored in a wallet, they are stored on a blockchain, and the wallet allows you to manage them. With the right cryptocurrency wallet, you can dive into the exciting world of digital currencies and decentralized finance with confidence and peace of mind. Safely store your funds, manage your transactions, and explore the endless possibilities of crypto and the DeFi world. We created this session of Yield Farming Academy to describe all the essential aspects of crypto wallets. Please read it carefully and check our tutorial at the end. Also, we prepared some quests & tasks for you to prove your knowledge. The Evolution of Crypto Wallets The Evolution of Crypto Wallets Crypto wallets have come a long way to cater the evolving needs of users and enhance security measures. Let’s explore the notable developments in the evolution of crypto wallets: By embracing these advancements, crypto wallets have evolved into sophisticated tools that empower users to securely store, manage, and transact with their digital assets. Ultimately, choosing a cryptocurrency wallet depends on your needs and preferences. Consider security features, user-friendliness, compatibility with cryptocurrencies, DeFi interaction and backup options. Researching and selecting a reputable wallet that aligns with your requirements is always better than trusting someone’s opinion. Custodial and non-custodial wallets Custodial and non-custodial wallets are two different types of cryptocurrency wallets that differ in terms of control and custody of private keys. Custodial and non-custodial wallets Custodial Wallets: Custodial wallets, also known as hosted wallets or third-party wallets, are wallets where the private keys of the users’ cryptocurrency holdings are held and managed by a third-party service provider. In this type of wallet, users rely on the custodian to safeguard their private keys and manage their funds. Examples of custodial wallets include wallets provided by cryptocurrency exchanges like Coinbase, Binance, or Kraken. Pros of Custodial Wallets: Cons of Custodial Wallets: Non-Custodial Wallets: Non-custodial wallets, also known as self-custody wallets or user-controlled wallets, are wallets where users have full control over their private keys. In this type of wallet, users generate and store their private keys locally on their devices or in a secure offline environment. Non-custodial wallets do not rely on any third-party service provider to manage the private keys or access the funds. Examples of non-custodial wallets include software wallets like Electrum, MetaMask, and Argent, or hardware wallets. Pros of Non-Custodial Wallets: Cons of Non-Custodial Wallets: When choosing between custodial and non-custodial wallets, users should consider factors such as security, control, privacy, and their own level of expertise in managing cryptocurrency wallets. In our industry, we have amazing Quote. Not Your Keys, Not Your Coins! It is essential to weigh the trade-offs and choose the option that aligns with their preferences and requirements. We recommend using non-custodial wallets for most of the crypto portfolio. The public key & wallet address and private key & seed phrase Let’s dive into more technical aspects of the relationship between the public key & wallet address and private key & seed phrase: The public key & wallet address and private key & seed phrase Public Key: The public key is a publicly shared cryptographic key for encryption and verification. It is derived from the private key using a mathematical algorithm. Public keys are required to encrypt data or verify the authenticity of digital signatures. They are accessible to others without compromising the security of the encryption process. For example, when someone wants to send you an encrypted message, they use your public key to encrypt it. Only you, as the holder of the corresponding private key, can decrypt and access the message. Wallet Address: A wallet address is a unique identifier used in cryptocurrencies to receive funds. It is a string of alphanumeric characters, such as a Bitcoin or Ethereum address. When you want someone to

ETHcc side event by Leech Protocol

21/10/2023

Home | News & Insights ETHcc side event by Leech Protocol: Yield Farming Workshop RECAP We recently hosted an exhilarating Yield Farming Workshop as a side event at the ETHcc Conference, and it was a blast! Here’s a quick recap of what we covered: We are close to our 2nd stage of Launch! Follow our Twitter and Telegram to join the testing and get a reward as an early contributor! What should you do next? Share Twitter Facebook Telegram

Pendle Finance

28/09/2023

Home | News & Insights Pendle Finance – DeFi’s Yield Trading Protocol Starting to explore yield farming strategies based on protocols, and today we’ll take a look at Pendle Finance. Table of content Pendle Finance is one of the most intriguing protocols in DeFi right now. Its launch somewhat preceded its time, and the DeFi market wasn’t ready for widespread adoption of this protocol just yet. However, Pendle Finance has benefited from many innovations in DeFi over the past year: the emergence of the LSDfi narrative, the introduction of numerous other efficient yield-bearing assets, and the thriving DeFi ecosystem on Arbitrum. So, what is Pendle? Pendle Finance is a protocol in the Interest Rates Markets category. What does Pendle do? It divides yield-bearing tokens into two parts: the base portion (Principal Token = PT) and the income portion (Yield Token = YT), creating a market (pool) for them. Naturally, each specific YT/PT pool will have a maturity date. At the maturity date, the YT token will be worth 0, while the PT token will be equal to 1 unit of the underlying asset. Let’s take a look at an example using stETH. YT (Yield Token) By holding 1 YT stETH 🪙 🟢 You will receive the yield generated by stETH. This yield can vary depending on the activity in the Ethereum network, changes in the Lido protocol, and changes in staking rewards in the Ethereum network. 🟢 Your YT stETH will have a value (and a market with sufficient liquidity, by the way). The value will be influenced by: It’s worth noting that the price of YT is significantly lower than that of the underlying asset. For example, currently, you can buy YT stETH with a maturity date of December 30, 2027, for ~$250, while stETH is priced at ~$1850. This means you can exchange 1 stETH for 7.4 YT stETH and earn the yield equivalent to that of 7.4 stETH. It’s a kind of yield leverage without liquidations. Degen Tips: By holding a position in the Yield Token (YT), you, in a sense, have a long position in the yield of the underlying asset, and you generate this yield more efficiently (with “leverage”). PT (Principal Token) By holding 1 PT stETH 🪙 🟢 You will not receive the yield generated by stETH. 🟢 Your PT stETH will have a value (and a market with sufficient liquidity as well). The value will be influenced by: In the example of the same pool with a maturity date of December 30, 2027, the price of PT stETH would already be around $1600. By purchasing PT, you essentially acquire the underlying asset at a discount. More precisely, you are fixing the current yield. Degen Tips: By holding a position in the Principal Token (PT), you, in a sense, have a long position in the underlying asset + fix the yield. This can also be partially viewed as a short position in terms of yield if you expect the yield to decrease. DeFi opportunities with Pendle Finance So, we’ve discussed how interest rates markets work on Pendle. Now, let’s explore some specific farming use cases with Pendle and around it. Let’s dive in and explore the Pendle APYs! Impermanent Loss-free farming through YT At Leech Protocol, we don’t consider Impermanent Loss (IL) as a significant risk (we can provide a detailed explanation upon request), but nevertheless, this feature is present in DeFi. Pendle helps to coexist with this feature. That’s exactly what Pendle, in collaboration with @‌CamelotDEX ⚔️, has done. In the screenshot, you can already see LP PENDLE-ETH (Camelot) and ARB-ETH (Camelot). Farming Tips: If you don’t want to deal with asset price volatility in the pool and are bullish on the yield of a specific LP, YT LP is suitable for you. Farming Tips: If you want to lock in the current yield of the LP you are farming, PT LP will be useful for you. Farming in Pendle pools Alright, so Pendle has liquid markets, but where does that liquidity come from? It comes from its own liquidity pools, which means we can also become liquidity providers in these pools. Pay close attention here. Let’s say you have ARB-ETH LP (Camelot) and want to earn additional yield on top of it. You can come to Pendle and use the zap-in strategy (similar to providing liquidity to a regular pool) in the LP pool. Now, your LP is split into YT LP and PT LP, and you: Moreover, the nature of YT/PT assets in Pendle pools allows you to not worry about Impermanent Loss. Pendle pools are one of the best places in DeFi for liquidity providers. 💡 Farming Tips: If you want to increase the yield of your yield-bearing asset, take a look at Pendle Pools. If you truly want to delve deep into DeFi strategies related to Pendle Finance, you won’t find better threads than those from Vu Gaba Vineb. Farming based on Pendle The ve-tokenomics of Pendle Finance have not gone unnoticed, and the Pendle Wars have even ignited. To learn more about what is currently happening, check out an excellent thread by Small Cap Scientist. In any case, this has provided a boost for the development of a range of projects built on Pendle. The rewards earned in $PENDLE can already be directed towards yield boosters such as Equilibria or Penpie. Additionally, you can provide liquidity in Pendle Pools through similar projects, thereby earning yet another type of token rewards. Just take a look at the yield structure! In conclusion, we want to emphasize that Pendle may not be the most intuitive protocol, but it is highly versatile. It’s worth understanding it, if only because interest rate markets have the potential to become one of the largest markets in DeFi in the medium to long term. What should you do next? *Try our automated cross-chain farming app (soon) * Follow our Twitter for more DeFi and YieldFarming tips * Join our Telegram for Daily Farming discussion * Join our Discord to claim your roles and become early community member Share: Twitter Facebook Telegram