Best Yields on Layer 2 | Q1 2022
A list of the highest yields on Ethereum Layer 2
Zerion is Mission Control for Web3. Trade tokens, transfer across chains, and display NFTs.
Dear Bankless Nation,
We’re bullish on L2s. Just this year we’ve released five L2 level-ups:
Now we’re taking it one step further:
This is a comprehensive guide on opportunities to earn juicy yields on L2s.
⚠️ The Full Guide is only available to Premium Members. If you’re not Bankless Premium yet, this single guide gives you the ROI to justify an upgrade.
Here’s why these yield opportunities are 🔥:
More gains on L2s. Gone are the days of triple digit APYs on Compound. But on L2s, where activity is still climbing, APYs have not been diluted and still offer double digit returns in many cases.
L2s are cheap. What’s the point of aping $100 into a 69% APY pool on mainnet is the gas costs to deposit and withdraw eat your profits away?
Tokens are coming. Earlier this week, we dropped thoughts on how to qualify for the inevitable L2 token drops. Using L2s increases your chances of receiving future L2 token drops!!!
Bankless was founded on the idea of financial and economic independence. This guide reminds me of the exuberance I felt in DeFi summer. If you missed that, don’t miss this.
WAGMI
- RSA
P.S. This is cool…who’s gonna win the superbowl? Bet on Bengals vs Rams using DeFi.
🙏 Sponsor: Polymarket—Bet on your Beliefs & Harness the Power of Free Markets
🎙️ STATE OF THE NATION
Listen to podcast episode | iTunes | Spotify | YouTube | RSS Feed
THOUGHT THURSDAY
Bankless Writer: Lucas Campbell, Editor for Bankless & Co-Founder for Bankless DAO
Best Yields on Layer 2
Ethereum gas fees have been untenable for years. And for yield farmers, these gas fees have been seriously eating into profits. You can’t be paying hundreds of dollars in fees when you’re farming with a few thousand, or less. The economics just don’t add up.
Ethereum needs to scale.
Fortunately, this problem has been known for years, and solving it has been a priority since genesis. To that end, the Ethereum community dialed in on a rollup-centric roadmap and it’s finally coming to fruition. Arbitrum, Optimism, and others have all launched on mainnet, opening up the gates for developers to build and degens to ape.
As such, we’ve seen an explosion of applications extend onto L2s while some have bypassed mainnet altogether.
Look closely and you’ll see parallels to DeFi Summer 2020. DeFi apps are coming in droves and offering juicy yield opportunities.
Not only are these yields high, but the gas fees are nothing. Users are paying a couple of bucks to transact instantly on L2, allowing them to reap the full yield rewards without eating into the margins.
But it still takes effort to scour the DeFi ecosystem to find these opportunities. So we did the work for you and put together this 💰 guide.
Here are the best yield opportunities on L2.
⚠️ This guide focuses specifically on Arbitrum and Optimism. While zkSync and Starkware are both L2s, their DeFi activity is still early. Importantly, Polygon is not included as it’s technically a side chain and likely deserves its own guide for another time :)
Best Yields on Arbitrum
Curve
🧠 Curve Finance is the most popular DEX built specifically for trading stables, with minimal slippage and maximal efficiency! Curve V2 opens up the possibility for non-like pairs, providing more options for prospective depositors.
TriCrypto (ETH + USDT + WBTC)
Risk: Low-Moderate
Yield: 17% APY (Base + Rewards)
The largest pool by trading volume is the TriCrypto Pool, offering 17% APY in CRV tokens for providing liquidity on the ETH, USDT, and WBTC. In addition, as volume increases, LPs can expect to earn more from trading fees as well!
2Pool (USDT + USDC)
Risk: Low
Yield: 8% APY
For those that want to avoid the risk of impermanent loss, Curve is also offering a liquidity mining program on the USDT and USDC pool on Arbitrum, currently boasting 7.4% APY. Similar to above, the majority of the yield derives from Curve’s native token, CRV, but there’s also the potential to earn sizable rewards from trading fees.
Dopex
🧠 The Dopex Single Sided Options Vault is a newer DeFi primitive. It allows users to lock tokens and choose 3 call option strikes where the vault will automatically farm rewards from the call options and automatically compound them for stakers.
Singled Sided Options Vault (ETH)
Risk: Moderate-High
Yield: 16% APY
Dopex’s SSOV for ETH allows you to lock tokens and sells call options to users. The rewards are automatically compounded for users for an APY of 16%. If you’re looking for yields on other tokens, check out the vaults for DPX and gOHM!
Hundred Finance
🧠 Hundred Finance is a lending and borrowing protocol similar to Compound or Aave. The caveat here is that it implements the veToken model found in Curve for its native token. As such, users can earn a higher APY yield (in the form of HND) by locking up more HND for an extended period of time.
USDC Pool
Risk: Moderate
Yield: 8-20% APY
Given the implementation of the veToken model, pool yields depend on how long you lock HND tokens for—if any. The current rate on USDC ranges from 8% APY to as high as 20% APY to those that lock HND tokens for the maximum amount of time, which is 4 years.
FRAX Pool
Risk: Moderate-High
Yield: 9-23% APY
For those that are fans of FRAX’s algorithmic stablecoin, Hundred Finance also offers a substantial yield for those who deposit the FRAX, depending on the amount of HND the depositor locks. The current yield ranges from 9-23%, with the majority of the rewards denominated in the HND tokens.
Synapse
🧠 Synapse is a cross-chain liquidity protocol that facilitates swaps across different L1s, L2s, and sidechains. The protocol offers a range of opportunities for depositors to provide this cross-chain liquidity, boasting noticeable yields across the board.
ETH Pool
Risk: Moderate-Low
Yield: 9% APY
The Synpase ETH pool is currently pumping out a 9% APY for anyone who helps provide liquidity for cross-chain (L1s and L2s) swaps. This includes LP’ing with WETH and nETH on Arbitrum!
3Pool
Risk: Moderate-Low
Yield: 15%
In addition to the ETH Pool, Synapse also offers a 3Pool for those looking to earn a yield on stablecoins. As of writing, this amounts to 15% APY for those that deposit USDC, USDT, and nUSD (Synapse’s native cross-chain stablecoin).
[REDACTED]
[REDACTED]
Risk: Moderate
Yield: 13% APY
[REDACTED]
Risk: Moderate
Yield: 11% APY
[REDACTED]
[REDACTED]
Risk: Moderate-High
Yield: 5-27% APY
[REDACTED]
Risk: High
Yield: 18-225% APY
[REDACTED]
[REDACTED]
Risk: High
Yield: 56%
[REDACTED]
Risk: High
Yield: 60%+
[REDACTED]
[REDACTED]
Risk: High
Yield: 144%
[REDACTED]
Risk: High
Yield: 47%
Best Yields on Optimism
Synapse
🧠 Synapse is a cross-chain liquidity protocol that facilitates swaps across different L1s, L2s, and sidechains. The protocol offers a range of opportunities for depositors to provide this cross-chain liquidity, boasting noticeable yields across the board.
ETH Pool
Risk: Moderate-Low
Yield: 5-6% APY
Similar to the Arbitrum Pool, Synapse also has an ETH/nETH pool on Optimism. However, the yield is slightly lower sitting at 5.6% APY for depositors.
Barnbridge
🧠 BarnBridge is a decentralized protocol for tokenizing risk. The project offers blockchain-based products that help users hedge against, and calibrate their exposures to, DeFi yield fluctuations. Barnbridge recently deployed its fixed rate protocol to Optimism, featuring a number of pools including ETH, WBTC, SNX, and LINK for prospective depositors to ape into.
WETH Pool
Risk: Moderate
Yield: N/A
Given how new Barnbridge’s deployment is on Optimism, the numbers here are still fairly early to calculate. but if you’re interested in learning more about Barnbridge and how it works, I recommend leveling up with our guide here.
WBTC Pool
Risk: Moderate
Yield: N/A
Similar to the ETH pool, Barnbridge also has an opportunity for WBTC holders on Optimism!
[REDACTED]
[REDCATED]
Risk: Moderate
Yield: 39-49% APY
[REDACTED]
[REDCATED]
Risk: High
Yield: 14.5% APY
[REDACTED]
[REDCATED]
Risk: Moderate
Yield: 10-125% APR
[REDCATED]
Risk: Moderate
Yield: 12-500% APR
Conclusion
Ethereum Layer 2s are growing at a rapid pace.
More protocols are deploying on these emerging systems every week, providing more and more opportunities for yield farmers. If Ethereum gas fees are preventing you from aping into your favorite farms, Layer 2s are the answer.
The best part is that it’s just getting started. Major protocols like Aave, Compound, Maker, and others are amid the process of deploying their protocols on Layer 2s while centralized exchanges are gearing up to support direct withdrawals and deposits. This doesn’t even account for the plethora of L2 native applications that are being built, and where a lot of the potential opportunities will lie.
The last part worth noting is that Layer 2 tokens are coming. No one knows exactly how they’ll distribute their native tokens, but the safest bet is to start using these platforms today, in any capacity you can.
It’s #L222, mfers.
Action steps
📑 Read why we’re expecting to see L2 tokens late this year and into 2023
🤑 Understand why earning yield on L2s could qualify you for L2 tokens
🎓 Check out our content on Abritrum, zkSync, Optimism, and StarkWare
Author Bio
Lucas Campbell is the Editor for Bankless and Co-Founder of Bankless DAO. He also engages with teams on token economics & governance through 🔥 _🔥 (Fire Eyes DAO), working with industry-leading projects like Aave, Balancer, Gitcoin, SuperRare, ENS and more.
Subscribe to Bankless. $22 per mo. Includes archive access, Inner Circle & Badge.
🙏Thanks to our sponsor
Polymarket
👉 Use code "bankless" to get up to $100 reimbursed on your first day of trading!
Polymarket is an information markets platform that lets you trade on the world’s most highly-debated topics. On Polymarket, build a portfolio based on your forecasts and earn a return if you are right.
When you buy shares in a market, you are weighing in with your own knowledge, research, and view on the future. Market prices reflect what traders think are the odds of events happening, turning trading activity into actionable insights that help people better plan for their future.
Want to get featured on Bankless? Send your article to submissions@banklesshq.com
Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.
Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.
Zerion is Mission Control for Web3. Trade tokens, transfer across chains, and display NFTs.
Dear Bankless Nation,
We’re bullish on L2s. Just this year we’ve released five L2 level-ups:
Now we’re taking it one step further:
This is a comprehensive guide on opportunities to earn juicy yields on L2s.
⚠️ The Full Guide is only available to Premium Members. If you’re not Bankless Premium yet, this single guide gives you the ROI to justify an upgrade.
Here’s why these yield opportunities are 🔥:
More gains on L2s. Gone are the days of triple digit APYs on Compound. But on L2s, where activity is still climbing, APYs have not been diluted and still offer double digit returns in many cases.
L2s are cheap. What’s the point of aping $100 into a 69% APY pool on mainnet is the gas costs to deposit and withdraw eat your profits away?
Tokens are coming. Earlier this week, we dropped thoughts on how to qualify for the inevitable L2 token drops. Using L2s increases your chances of receiving future L2 token drops!!!
Bankless was founded on the idea of financial and economic independence. This guide reminds me of the exuberance I felt in DeFi summer. If you missed that, don’t miss this.
WAGMI
- RSA
P.S. This is cool…who’s gonna win the superbowl? Bet on Bengals vs Rams using DeFi.
🙏 Sponsor: Polymarket—Bet on your Beliefs & Harness the Power of Free Markets
🎙️ STATE OF THE NATION
Listen to podcast episode | iTunes | Spotify | YouTube | RSS Feed
THOUGHT THURSDAY
Bankless Writer: Lucas Campbell, Editor for Bankless & Co-Founder for Bankless DAO
Best Yields on Layer 2
[INSERT GRAPHIC] + Logan Credit
Ethereum gas fees have been untenable for years. And for yield farmers, these gas fees have been seriously eating into profits. You can’t be paying hundreds of dollars in fees when you’re farming with a few thousand, or less. The economics just don’t add up.
Ethereum needs to scale.
Fortunately, this problem has been known for years, and solving it has been a priority since genesis. To that end, the Ethereum community dialed in on a rollup-centric roadmap and it’s finally coming to fruition. Arbitrum, Optimism, and others have all launched on mainnet, opening up the gates for developers to build and degens to ape.
As such, we’ve seen an explosion of applications extend onto L2s while some have bypassed mainnet altogether.
Look closely and you’ll see parallels to DeFi Summer 2020. DeFi apps are coming in droves and offering juicy yield opportunities.
Not only are these yields high, but the gas fees are nothing. Users are paying a couple of bucks to transact instantly on L2, allowing them to reap the full yield rewards without eating into the margins.
But it still takes effort to scour the DeFi ecosystem to find these opportunities. So we did the work for you and put together this 💰 guide.
Here are the best yield opportunities on L2.
⚠️ This guide focuses specifically on Arbitrum and Optimism. While zkSync and Starkware are both L2s, their DeFi activity is still early. Importantly, Polygon is not included as it’s technically a side chain and likely deserves its own guide for another time :)
Best Yields on Arbitrum
Curve
🧠 Curve Finance is the most popular DEX built specifically for trading stables, with minimal slippage and maximal efficiency! Curve V2 opens up the possibility for non-like pairs, providing more options for prospective depositors.
TriCrypto (ETH + USDT + WBTC)
Risk: Low-Moderate
Yield: 17% APY (Base + Rewards)
The largest pool by trading volume is the TriCrypto Pool, offering 17% APY in CRV tokens for providing liquidity on the ETH, USDT, and WBTC. In addition, as volume increases, LPs can expect to earn more from trading fees as well!
2Pool (USDT + USDC)
Risk: Low
Yield: 8% APY
For those that want to avoid the risk of impermanent loss, Curve is also offering a liquidity mining program on the USDT and USDC pool on Arbitrum, currently boasting 7.4% APY. Similar to above, the majority of the yield derives from Curve’s native token, CRV, but there’s also the potential to earn sizable rewards from trading fees.
Dopex
🧠 The Dopex Single Sided Options Vault is a newer DeFi primitive. It allows users to lock tokens and choose 3 call option strikes where the vault will automatically farm rewards from the call options and automatically compound them for stakers.
Singled Sided Options Vault (ETH)
Risk: Moderate-High
Yield: 16% APY
Dopex’s SSOV for ETH allows you to lock tokens and sells call options to users. The rewards are automatically compounded for users for an APY of 16%. If you’re looking for yields on other tokens, check out the vaults for DPX and gOHM!
Hundred Finance
🧠 Hundred Finance is a lending and borrowing protocol similar to Compound or Aave. The caveat here is that it implements the veToken model found in Curve for its native token. As such, users can earn a higher APY yield (in the form of HND) by locking up more HND for an extended period of time.
USDC Pool
Risk: Moderate
Yield: 8-20% APY
Given the implementation of the veToken model, pool yields depend on how long you lock HND tokens for—if any. The current rate on USDC ranges from 8% APY to as high as 20% APY to those that lock HND tokens for the maximum amount of time, which is 4 years.
FRAX Pool
Risk: Moderate-High
Yield: 9-23% APY
For those that are fans of FRAX’s algorithmic stablecoin, Hundred Finance also offers a substantial yield for those who deposit the FRAX, depending on the amount of HND the depositor locks. The current yield ranges from 9-23%, with the majority of the rewards denominated in the HND tokens.
Synapse
🧠 Synapse is a cross-chain liquidity protocol that facilitates swaps across different L1s, L2s, and sidechains. The protocol offers a range of opportunities for depositors to provide this cross-chain liquidity, boasting noticeable yields across the board.
ETH Pool
Risk: Moderate-Low
Yield: 9% APY
The Synpase ETH pool is currently pumping out a 9% APY for anyone who helps provide liquidity for cross-chain (L1s and L2s) swaps. This includes LP’ing with WETH and nETH on Arbitrum!
3Pool
Risk: Moderate-Low
Yield: 15%
In addition to the ETH Pool, Synapse also offers a 3Pool for those looking to earn a yield on stablecoins. As of writing, this amounts to 15% APY for those that deposit USDC, USDT, and nUSD (Synapse’s native cross-chain stablecoin).
[REDACTED]
[REDACTED]
Risk: Moderate
Yield: 13% APY
[REDACTED]
Risk: Moderate
Yield: 11% APY
[REDACTED]
[REDACTED]
Risk: Moderate-High
Yield: 5-27% APY
[REDACTED]
Risk: High
Yield: 18-225% APY
[REDACTED]
[REDACTED]
Risk: High
Yield: 56%
[REDACTED]
Risk: High
Yield: 60%+
[REDACTED]
[REDACTED]
Risk: High
Yield: 144%
[REDACTED]
Risk: High
Yield: 47%
Best Yields on Optimism
Synapse
🧠 Synapse is a cross-chain liquidity protocol that facilitates swaps across different L1s, L2s, and sidechains. The protocol offers a range of opportunities for depositors to provide this cross-chain liquidity, boasting noticeable yields across the board.
ETH Pool
Risk: Moderate-Low
Yield: 5-6% APY
Similar to the Arbitrum Pool, Synapse also has an ETH/nETH pool on Optimism. However, the yield is slightly lower sitting at 5.6% APY for depositors.
Barnbridge
🧠 BarnBridge is a decentralized protocol for tokenizing risk. The project offers blockchain-based products that help users hedge against, and calibrate their exposures to, DeFi yield fluctuations. Barnbridge recently deployed its fixed rate protocol to Optimism, featuring a number of pools including ETH, WBTC, SNX, and LINK for prospective depositors to ape into.
WETH Pool
Risk: Moderate
Yield: N/A
Given how new Barnbridge’s deployment is on Optimism, the numbers here are still fairly early to calculate. but if you’re interested in learning more about Barnbridge and how it works, I recommend leveling up with our guide here.
WBTC Pool
Risk: Moderate
Yield: N/A
Similar to the ETH pool, Barnbridge also has an opportunity for WBTC holders on Optimism!
[REDACTED]
[REDCATED]
Risk: Moderate
Yield: 39-49% APY
[REDACTED]
[REDCATED]
Risk: High
Yield: 14.5% APY
[REDACTED]
[REDCATED]
Risk: Moderate
Yield: 10-125% APR
[REDCATED]
Risk: Moderate
Yield: 12-500% APR
Conclusion
Ethereum Layer 2s are growing at a rapid pace.
More protocols are deploying on these emerging systems every week, providing more and more opportunities for yield farmers. If Ethereum gas fees are preventing you from aping into your favorite farms, Layer 2s are the answer.
The best part is that it’s just getting started. Major protocols like Aave, Compound, Maker, and others are amid the process of deploying their protocols on Layer 2s while centralized exchanges are gearing up to support direct withdrawals and deposits. This doesn’t even account for the plethora of L2 native applications that are being built, and where a lot of the potential opportunities will lie.
The last part worth noting is that Layer 2 tokens are coming. No one knows exactly how they’ll distribute their native tokens, but the safest bet is to start using these platforms today, in any capacity you can.
It’s #L222, mfers.
Action steps
📑 Read why we’re expecting to see L2 tokens late this year and into 2023
🤑 Understand why earning yield on L2s could qualify you for L2 tokens
🎓 Check out our content on Abritrum, zkSync, Optimism, and StarkWare
Author Bio
Lucas Campbell is the Editor for Bankless and Co-Founder of Bankless DAO. He also engages with teams on token economics & governance through 🔥 _🔥 (Fire Eyes DAO), working with industry-leading projects like Aave, Balancer, Gitcoin, SuperRare, ENS and more.
Subscribe to Bankless. $22 per mo. Includes archive access, Inner Circle & Badge.
🙏Thanks to our sponsor
Polymarket
👉 Use code "bankless" to get up to $100 reimbursed on your first day of trading!
Polymarket is an information markets platform that lets you trade on the world’s most highly-debated topics. On Polymarket, build a portfolio based on your forecasts and earn a return if you are right.
When you buy shares in a market, you are weighing in with your own knowledge, research, and view on the future. Market prices reflect what traders think are the odds of events happening, turning trading activity into actionable insights that help people better plan for their future.
Want to get featured on Bankless? Send your article to submissions@banklesshq.com
Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.
Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.
Zerion is Mission Control for Web3. Trade tokens, transfer across chains, and display NFTs.
Dear Bankless Nation,
We’re bullish on L2s. Just this year we’ve released five L2 level-ups:
Now we’re taking it one step further:
This is a comprehensive guide on opportunities to earn juicy yields on L2s.
⚠️ The Full Guide is only available to Premium Members. If you’re not Bankless Premium yet, this single guide gives you the ROI to justify an upgrade.
Here’s why these yield opportunities are 🔥:
More gains on L2s. Gone are the days of triple digit APYs on Compound. But on L2s, where activity is still climbing, APYs have not been diluted and still offer double digit returns in many cases.
L2s are cheap. What’s the point of aping $100 into a 69% APY pool on mainnet is the gas costs to deposit and withdraw eat your profits away?
Tokens are coming. Earlier this week, we dropped thoughts on how to qualify for the inevitable L2 token drops. Using L2s increases your chances of receiving future L2 token drops!!!
Bankless was founded on the idea of financial and economic independence. This guide reminds me of the exuberance I felt in DeFi summer. If you missed that, don’t miss this.
WAGMI
- RSA
P.S. This is cool…who’s gonna win the superbowl? Bet on Bengals vs Rams using DeFi.
🙏 Sponsor: Polymarket—Bet on your Beliefs & Harness the Power of Free Markets
🎙️ STATE OF THE NATION
Listen to podcast episode | iTunes | Spotify | YouTube | RSS Feed
THOUGHT THURSDAY
Bankless Writer: Lucas Campbell, Editor for Bankless & Co-Founder for Bankless DAO
Best Yields on Layer 2
[INSERT GRAPHIC] + Logan Credit
Ethereum gas fees have been untenable for years. And for yield farmers, these gas fees have been seriously eating into profits. You can’t be paying hundreds of dollars in fees when you’re farming with a few thousand, or less. The economics just don’t add up.
Ethereum needs to scale.
Fortunately, this problem has been known for years, and solving it has been a priority since genesis. To that end, the Ethereum community dialed in on a rollup-centric roadmap and it’s finally coming to fruition. Arbitrum, Optimism, and others have all launched on mainnet, opening up the gates for developers to build and degens to ape.
As such, we’ve seen an explosion of applications extend onto L2s while some have bypassed mainnet altogether.
Look closely and you’ll see parallels to DeFi Summer 2020. DeFi apps are coming in droves and offering juicy yield opportunities.
Not only are these yields high, but the gas fees are nothing. Users are paying a couple of bucks to transact instantly on L2, allowing them to reap the full yield rewards without eating into the margins.
But it still takes effort to scour the DeFi ecosystem to find these opportunities. So we did the work for you and put together this 💰 guide.
Here are the best yield opportunities on L2.
⚠️ This guide focuses specifically on Arbitrum and Optimism. While zkSync and Starkware are both L2s, their DeFi activity is still early. Importantly, Polygon is not included as it’s technically a side chain and likely deserves its own guide for another time :)
Best Yields on Arbitrum
Curve
🧠 Curve Finance is the most popular DEX built specifically for trading stables, with minimal slippage and maximal efficiency! Curve V2 opens up the possibility for non-like pairs, providing more options for prospective depositors.
TriCrypto (ETH + USDT + WBTC)
Risk: Low-Moderate
Yield: 17% APY (Base + Rewards)
The largest pool by trading volume is the TriCrypto Pool, offering 17% APY in CRV tokens for providing liquidity on the ETH, USDT, and WBTC. In addition, as volume increases, LPs can expect to earn more from trading fees as well!
2Pool (USDT + USDC)
Risk: Low
Yield: 8% APY
For those that want to avoid the risk of impermanent loss, Curve is also offering a liquidity mining program on the USDT and USDC pool on Arbitrum, currently boasting 7.4% APY. Similar to above, the majority of the yield derives from Curve’s native token, CRV, but there’s also the potential to earn sizable rewards from trading fees.
Dopex
🧠 The Dopex Single Sided Options Vault is a newer DeFi primitive. It allows users to lock tokens and choose 3 call option strikes where the vault will automatically farm rewards from the call options and automatically compound them for stakers.
Singled Sided Options Vault (ETH)
Risk: Moderate-High
Yield: 16% APY
Dopex’s SSOV for ETH allows you to lock tokens and sells call options to users. The rewards are automatically compounded for users for an APY of 16%. If you’re looking for yields on other tokens, check out the vaults for DPX and gOHM!
Hundred Finance
🧠 Hundred Finance is a lending and borrowing protocol similar to Compound or Aave. The caveat here is that it implements the veToken model found in Curve for its native token. As such, users can earn a higher APY yield (in the form of HND) by locking up more HND for an extended period of time.
USDC Pool
Risk: Moderate
Yield: 8-20% APY
Given the implementation of the veToken model, pool yields depend on how long you lock HND tokens for—if any. The current rate on USDC ranges from 8% APY to as high as 20% APY to those that lock HND tokens for the maximum amount of time, which is 4 years.
FRAX Pool
Risk: Moderate-High
Yield: 9-23% APY
For those that are fans of FRAX’s algorithmic stablecoin, Hundred Finance also offers a substantial yield for those who deposit the FRAX, depending on the amount of HND the depositor locks. The current yield ranges from 9-23%, with the majority of the rewards denominated in the HND tokens.
Synapse
🧠 Synapse is a cross-chain liquidity protocol that facilitates swaps across different L1s, L2s, and sidechains. The protocol offers a range of opportunities for depositors to provide this cross-chain liquidity, boasting noticeable yields across the board.
ETH Pool
Risk: Moderate-Low
Yield: 9% APY
The Synpase ETH pool is currently pumping out a 9% APY for anyone who helps provide liquidity for cross-chain (L1s and L2s) swaps. This includes LP’ing with WETH and nETH on Arbitrum!
3Pool
Risk: Moderate-Low
Yield: 15%
In addition to the ETH Pool, Synapse also offers a 3Pool for those looking to earn a yield on stablecoins. As of writing, this amounts to 15% APY for those that deposit USDC, USDT, and nUSD (Synapse’s native cross-chain stablecoin).
[REDACTED]
[REDACTED]
Risk: Moderate
Yield: 13% APY
[REDACTED]
Risk: Moderate
Yield: 11% APY
[REDACTED]
[REDACTED]
Risk: Moderate-High
Yield: 5-27% APY
[REDACTED]
Risk: High
Yield: 18-225% APY
[REDACTED]
[REDACTED]
Risk: High
Yield: 56%
[REDACTED]
Risk: High
Yield: 60%+
[REDACTED]
[REDACTED]
Risk: High
Yield: 144%
[REDACTED]
Risk: High
Yield: 47%
Best Yields on Optimism
Synapse
🧠 Synapse is a cross-chain liquidity protocol that facilitates swaps across different L1s, L2s, and sidechains. The protocol offers a range of opportunities for depositors to provide this cross-chain liquidity, boasting noticeable yields across the board.
ETH Pool
Risk: Moderate-Low
Yield: 5-6% APY
Similar to the Arbitrum Pool, Synapse also has an ETH/nETH pool on Optimism. However, the yield is slightly lower sitting at 5.6% APY for depositors.
Barnbridge
🧠 BarnBridge is a decentralized protocol for tokenizing risk. The project offers blockchain-based products that help users hedge against, and calibrate their exposures to, DeFi yield fluctuations. Barnbridge recently deployed its fixed rate protocol to Optimism, featuring a number of pools including ETH, WBTC, SNX, and LINK for prospective depositors to ape into.
WETH Pool
Risk: Moderate
Yield: N/A
Given how new Barnbridge’s deployment is on Optimism, the numbers here are still fairly early to calculate. but if you’re interested in learning more about Barnbridge and how it works, I recommend leveling up with our guide here.
WBTC Pool
Risk: Moderate
Yield: N/A
Similar to the ETH pool, Barnbridge also has an opportunity for WBTC holders on Optimism!
[REDACTED]
[REDCATED]
Risk: Moderate
Yield: 39-49% APY
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[REDCATED]
Risk: High
Yield: 14.5% APY
[REDACTED]
[REDCATED]
Risk: Moderate
Yield: 10-125% APR
[REDCATED]
Risk: Moderate
Yield: 12-500% APR
Conclusion
Ethereum Layer 2s are growing at a rapid pace.
More protocols are deploying on these emerging systems every week, providing more and more opportunities for yield farmers. If Ethereum gas fees are preventing you from aping into your favorite farms, Layer 2s are the answer.
The best part is that it’s just getting started. Major protocols like Aave, Compound, Maker, and others are amid the process of deploying their protocols on Layer 2s while centralized exchanges are gearing up to support direct withdrawals and deposits. This doesn’t even account for the plethora of L2 native applications that are being built, and where a lot of the potential opportunities will lie.
The last part worth noting is that Layer 2 tokens are coming. No one knows exactly how they’ll distribute their native tokens, but the safest bet is to start using these platforms today, in any capacity you can.
It’s #L222, mfers.
Action steps
📑 Read why we’re expecting to see L2 tokens late this year and into 2023
🤑 Understand why earning yield on L2s could qualify you for L2 tokens
🎓 Check out our content on Abritrum, zkSync, Optimism, and StarkWare
Author Bio
Lucas Campbell is the Editor for Bankless and Co-Founder of Bankless DAO. He also engages with teams on token economics & governance through 🔥 _🔥 (Fire Eyes DAO), working with industry-leading projects like Aave, Balancer, Gitcoin, SuperRare, ENS and more.
Subscribe to Bankless. $22 per mo. Includes archive access, Inner Circle & Badge.
🙏Thanks to our sponsor
Polymarket
👉 Use code "bankless" to get up to $100 reimbursed on your first day of trading!
Polymarket is an information markets platform that lets you trade on the world’s most highly-debated topics. On Polymarket, build a portfolio based on your forecasts and earn a return if you are right.
When you buy shares in a market, you are weighing in with your own knowledge, research, and view on the future. Market prices reflect what traders think are the odds of events happening, turning trading activity into actionable insights that help people better plan for their future.
Want to get featured on Bankless? Send your article to submissions@banklesshq.com
Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.
Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.
Zerion is Mission Control for Web3. Trade tokens, transfer across chains, and display NFTs.
Dear Bankless Nation,
We’re bullish on L2s. Just this year we’ve released five L2 level-ups:
Now we’re taking it one step further:
This is a comprehensive guide on opportunities to earn juicy yields on L2s.
⚠️ The Full Guide is only available to Premium Members. If you’re not Bankless Premium yet, this single guide gives you the ROI to justify an upgrade.
Here’s why these yield opportunities are 🔥:
More gains on L2s. Gone are the days of triple digit APYs on Compound. But on L2s, where activity is still climbing, APYs have not been diluted and still offer double digit returns in many cases.
L2s are cheap. What’s the point of aping $100 into a 69% APY pool on mainnet is the gas costs to deposit and withdraw eat your profits away?
Tokens are coming. Earlier this week, we dropped thoughts on how to qualify for the inevitable L2 token drops. Using L2s increases your chances of receiving future L2 token drops!!!
Bankless was founded on the idea of financial and economic independence. This guide reminds me of the exuberance I felt in DeFi summer. If you missed that, don’t miss this.
WAGMI
- RSA
P.S. This is cool…who’s gonna win the superbowl? Bet on Bengals vs Rams using DeFi.
🙏 Sponsor: Polymarket—Bet on your Beliefs & Harness the Power of Free Markets
🎙️ STATE OF THE NATION
Listen to podcast episode | iTunes | Spotify | YouTube | RSS Feed
THOUGHT THURSDAY
Bankless Writer: Lucas Campbell, Editor for Bankless & Co-Founder for Bankless DAO
Best Yields on Layer 2
[INSERT GRAPHIC] + Logan Credit
Ethereum gas fees have been untenable for years. And for yield farmers, these gas fees have been seriously eating into profits. You can’t be paying hundreds of dollars in fees when you’re farming with a few thousand, or less. The economics just don’t add up.
Ethereum needs to scale.
Fortunately, this problem has been known for years, and solving it has been a priority since genesis. To that end, the Ethereum community dialed in on a rollup-centric roadmap and it’s finally coming to fruition. Arbitrum, Optimism, and others have all launched on mainnet, opening up the gates for developers to build and degens to ape.
As such, we’ve seen an explosion of applications extend onto L2s while some have bypassed mainnet altogether.
Look closely and you’ll see parallels to DeFi Summer 2020. DeFi apps are coming in droves and offering juicy yield opportunities.
Not only are these yields high, but the gas fees are nothing. Users are paying a couple of bucks to transact instantly on L2, allowing them to reap the full yield rewards without eating into the margins.
But it still takes effort to scour the DeFi ecosystem to find these opportunities. So we did the work for you and put together this 💰 guide.
Here are the best yield opportunities on L2.
⚠️ This guide focuses specifically on Arbitrum and Optimism. While zkSync and Starkware are both L2s, their DeFi activity is still early. Importantly, Polygon is not included as it’s technically a side chain and likely deserves its own guide for another time :)
Best Yields on Arbitrum
Curve
🧠 Curve Finance is the most popular DEX built specifically for trading stables, with minimal slippage and maximal efficiency! Curve V2 opens up the possibility for non-like pairs, providing more options for prospective depositors.
TriCrypto (ETH + USDT + WBTC)
Risk: Low-Moderate
Yield: 17% APY (Base + Rewards)
The largest pool by trading volume is the TriCrypto Pool, offering 17% APY in CRV tokens for providing liquidity on the ETH, USDT, and WBTC. In addition, as volume increases, LPs can expect to earn more from trading fees as well!
2Pool (USDT + USDC)
Risk: Low
Yield: 8% APY
For those that want to avoid the risk of impermanent loss, Curve is also offering a liquidity mining program on the USDT and USDC pool on Arbitrum, currently boasting 7.4% APY. Similar to above, the majority of the yield derives from Curve’s native token, CRV, but there’s also the potential to earn sizable rewards from trading fees.
Dopex
🧠 The Dopex Single Sided Options Vault is a newer DeFi primitive. It allows users to lock tokens and choose 3 call option strikes where the vault will automatically farm rewards from the call options and automatically compound them for stakers.
Singled Sided Options Vault (ETH)
Risk: Moderate-High
Yield: 16% APY
Dopex’s SSOV for ETH allows you to lock tokens and sells call options to users. The rewards are automatically compounded for users for an APY of 16%. If you’re looking for yields on other tokens, check out the vaults for DPX and gOHM!
Hundred Finance
🧠 Hundred Finance is a lending and borrowing protocol similar to Compound or Aave. The caveat here is that it implements the veToken model found in Curve for its native token. As such, users can earn a higher APY yield (in the form of HND) by locking up more HND for an extended period of time.
USDC Pool
Risk: Moderate
Yield: 8-20% APY
Given the implementation of the veToken model, pool yields depend on how long you lock HND tokens for—if any. The current rate on USDC ranges from 8% APY to as high as 20% APY to those that lock HND tokens for the maximum amount of time, which is 4 years.
FRAX Pool
Risk: Moderate-High
Yield: 9-23% APY
For those that are fans of FRAX’s algorithmic stablecoin, Hundred Finance also offers a substantial yield for those who deposit the FRAX, depending on the amount of HND the depositor locks. The current yield ranges from 9-23%, with the majority of the rewards denominated in the HND tokens.
Synapse
🧠 Synapse is a cross-chain liquidity protocol that facilitates swaps across different L1s, L2s, and sidechains. The protocol offers a range of opportunities for depositors to provide this cross-chain liquidity, boasting noticeable yields across the board.
ETH Pool
Risk: Moderate-Low
Yield: 9% APY
The Synpase ETH pool is currently pumping out a 9% APY for anyone who helps provide liquidity for cross-chain (L1s and L2s) swaps. This includes LP’ing with WETH and nETH on Arbitrum!
3Pool
Risk: Moderate-Low
Yield: 15%
In addition to the ETH Pool, Synapse also offers a 3Pool for those looking to earn a yield on stablecoins. As of writing, this amounts to 15% APY for those that deposit USDC, USDT, and nUSD (Synapse’s native cross-chain stablecoin).
[REDACTED]
[REDACTED]
Risk: Moderate
Yield: 13% APY
[REDACTED]
Risk: Moderate
Yield: 11% APY
[REDACTED]
[REDACTED]
Risk: Moderate-High
Yield: 5-27% APY
[REDACTED]
Risk: High
Yield: 18-225% APY
[REDACTED]
[REDACTED]
Risk: High
Yield: 56%
[REDACTED]
Risk: High
Yield: 60%+
[REDACTED]
[REDACTED]
Risk: High
Yield: 144%
[REDACTED]
Risk: High
Yield: 47%
Best Yields on Optimism
Synapse
🧠 Synapse is a cross-chain liquidity protocol that facilitates swaps across different L1s, L2s, and sidechains. The protocol offers a range of opportunities for depositors to provide this cross-chain liquidity, boasting noticeable yields across the board.
ETH Pool
Risk: Moderate-Low
Yield: 5-6% APY
Similar to the Arbitrum Pool, Synapse also has an ETH/nETH pool on Optimism. However, the yield is slightly lower sitting at 5.6% APY for depositors.
Barnbridge
🧠 BarnBridge is a decentralized protocol for tokenizing risk. The project offers blockchain-based products that help users hedge against, and calibrate their exposures to, DeFi yield fluctuations. Barnbridge recently deployed its fixed rate protocol to Optimism, featuring a number of pools including ETH, WBTC, SNX, and LINK for prospective depositors to ape into.
WETH Pool
Risk: Moderate
Yield: N/A
Given how new Barnbridge’s deployment is on Optimism, the numbers here are still fairly early to calculate. but if you’re interested in learning more about Barnbridge and how it works, I recommend leveling up with our guide here.
WBTC Pool
Risk: Moderate
Yield: N/A
Similar to the ETH pool, Barnbridge also has an opportunity for WBTC holders on Optimism!
[REDACTED]
[REDCATED]
Risk: Moderate
Yield: 39-49% APY
[REDACTED]
[REDCATED]
Risk: High
Yield: 14.5% APY
[REDACTED]
[REDCATED]
Risk: Moderate
Yield: 10-125% APR
[REDCATED]
Risk: Moderate
Yield: 12-500% APR
Conclusion
Ethereum Layer 2s are growing at a rapid pace.
More protocols are deploying on these emerging systems every week, providing more and more opportunities for yield farmers. If Ethereum gas fees are preventing you from aping into your favorite farms, Layer 2s are the answer.
The best part is that it’s just getting started. Major protocols like Aave, Compound, Maker, and others are amid the process of deploying their protocols on Layer 2s while centralized exchanges are gearing up to support direct withdrawals and deposits. This doesn’t even account for the plethora of L2 native applications that are being built, and where a lot of the potential opportunities will lie.
The last part worth noting is that Layer 2 tokens are coming. No one knows exactly how they’ll distribute their native tokens, but the safest bet is to start using these platforms today, in any capacity you can.
It’s #L222, mfers.
Action steps
📑 Read why we’re expecting to see L2 tokens late this year and into 2023
🤑 Understand why earning yield on L2s could qualify you for L2 tokens
🎓 Check out our content on Abritrum, zkSync, Optimism, and StarkWare
Author Bio
Lucas Campbell is the Editor for Bankless and Co-Founder of Bankless DAO. He also engages with teams on token economics & governance through 🔥 _🔥 (Fire Eyes DAO), working with industry-leading projects like Aave, Balancer, Gitcoin, SuperRare, ENS and more.
Subscribe to Bankless. $22 per mo. Includes archive access, Inner Circle & Badge.
🙏Thanks to our sponsor
Polymarket
👉 Use code "bankless" to get up to $100 reimbursed on your first day of trading!
Polymarket is an information markets platform that lets you trade on the world’s most highly-debated topics. On Polymarket, build a portfolio based on your forecasts and earn a return if you are right.
When you buy shares in a market, you are weighing in with your own knowledge, research, and view on the future. Market prices reflect what traders think are the odds of events happening, turning trading activity into actionable insights that help people better plan for their future.
Want to get featured on Bankless? Send your article to submissions@banklesshq.com
Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.
Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.
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