Bitcoin, DeFi , Yield Farming, and Ethereum Update

Boxmining avatar Boxmining
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Description

Latest Bitcoin and Cryptocurrency news and trends. We take a look at the key events affecting the blockchain sector and review market movements. Combining both fundamental analysis and technical analy...

AI Analysis

This video dives into the current crypto landscape, focusing on shifting market sentiment from extreme greed to caution, the increasing prevalence of scams in DeFi, and a deep dive into strategic, hedged yield farming. It also covers market movements influenced by real-world events and emphasizes the importance of critical thinking when consuming crypto news.

Here's a closer look at what was covered:

* Market Sentiment and Caution: The overall market sentiment has drastically shifted from extreme greed to caution, a pattern observed in 2017 before a second bull wave. This shift is accompanied by a significant increase in scams, rug pulls, and MetaMask compromises in the DeFi space, making extreme caution crucial, especially as the "greed wave" potentially ends.
* BitMEX Legal Action and Market Impact: The CFTC and DOJ's legal action against BitMEX, including the arrest of its CTO, caused a significant market hammer. Simultaneously, news of Trump contracting COVID also impacted crypto prices. This highlights that crypto markets are currently dictated by real-world events and are still viewed as a single, interconnected segment by the broader market, regardless of the distinct functionalities of assets like Bitcoin (store of value) and Ethereum (Turing complete for DeFi).
* DeFi Pullbacks: While Bitcoin and Ethereum saw some recovery over the weekend, DeFi continues to experience pullbacks. Flagship DeFi tokens like Yearn Finance (YFI, or "Wifey") lost 36% of its value over seven days, indicating a broader cautious trend in the DeFi sector.
* Evolving Farming Strategy: While acknowledging past "insane yields" of 1000% APY from early yield farming, there's a shift towards more strategic and hedged farming. The current approach involves being more cautious, selecting the best farms with the best yields, and creating hedged positions to mitigate exposure to underlying asset price fluctuations. This is referred to as "smart farming" or "farming 2.0."
* CVault.finance ($CORE) & Speculation: Core is highlighted as a highly speculative project with "Ponzi-nomics" and promises of vaults in its whitepaper, but no public code or clear development progress. This leads to a personal stance of taking a backseat and protecting funds from such speculative "insanity."
* CREAM Protocol: CREAM, a protocol that the presenter invested heavily in, experienced a significant price dump and has not found strong support. There's a personal regret of not moving funds out due to "sentimental attachment." Despite the price drop, Cream is still considered valuable due to its active development, including its swaps (similar to Curve but with more liquidity) and lending platforms (like Compound). Bitcoin is currently being utilized on Cream for an 11% APY on RenBTC, despite the inherent risks.
* YFValue ($YFV / $VALUE): YFV is noted for stabilizing and aggressively pushing out its development roadmap. While its APY is significantly lower now (80-90%) compared to its previous 600%, it's still considered relatively good in the current climate, and funds are still being farmed there, often with rarer coin pairs.
* LuaSwap ($LUA) and Hedged Farming Deep Dive: LuaSwap was the biggest farming project for the presenter recently. The strategy involved farming TAMO/ETH and TAMO/USD pools, but with a critical hedging component:
* Hedging: To remove TAMO price exposure, TAMO was bought and simultaneously shorted on FTX.
* Costs: This hedging comes with a high hourly funding rate (0.6% per hour, equating to around 518% APY in costs), which significantly eats into the farming profits.
* Reward Structure: LuaSwap's APY is high, but 75% of the Lua gains are locked and distributed linearly over a year, meaning immediate gains are much lower than the advertised APY. After calculations, immediate gains were around 140%.
* LUA Volatility: The Lua token itself is highly inflationary, causing its price to trend downwards. Therefore, the presenter immediately market-sells harvested Lua, retaining exposure only through the locked portions.
* Heightened Security Concerns: There's a strong emphasis on paranoia and security. Due to recent incidents of malicious links breaching MetaMask accounts and stealing tokens, the presenter has resorted to using different computers and networks when clicking on potentially suspicious links to minimize risk.
* Other Ongoing Farms: Still actively farming various protocols including YFE, Tomo, Sushi, and Swerve, often with 20-30% APYs, treating them as "set up and forget" positions. The primary focus for stablecoin farming has been Tomo using its USDT pair, combined with the FTX hedging strategy.
* Crypto Media Literacy: Warns against sensationalist headlines in crypto media, citing examples of Vitalik Buterin and Andre Cronje (Wifey creator) being selectively quoted and taken out of context. The takeaway is to be critical, read beyond headlines, and check what people actually said.
* Steaks Finance (STEAK): This is a new project mentioned where friends are farming. While it boasts high APYs (e.g., 1000% with STAKE/ETH), these are deemed very dangerous. Stablecoin pools within Steaks Finance offer much lower rewards (11-16% APY), reinforcing the personal logic of avoiding high-risk pools unless a clear hedging strategy is in place.
* Community and Content: Actively promoting his podcast, which features interviews with projects like Oasis (Paratime for private compute) and Plutus (integrating traditional and decentralized finance with a debit card). The Telegram group is being structured for higher quality discussion by funneling new members through a Discord server first. A newsletter is also growing, soon transitioning to a paid model with contributors, offering a summarized view of the crypto space for those not daily involved. The presenter also shares a personal goal of being more open-minded to new projects and trying intermittent fasting, making for a hungry live stream!

Transcript

It's Monday morning for me. So it's the 6th, 5th, not the 5th, not the 6th, the 5th of October. We're all the way in October now. It's kind of crazy if you think about it. But, you know, that's how fast life moves, I guess. So let me just double check that everything's live. We're all good. And we're going to talk a little bit about crypto today. It's not too much happening. So I think the market's kind of sentiment has drastically shifted. If you really look at sentiment throughout the last tw...