Is yield farming really dead?

do u have the ability to know why? think deeper with Root Cause Analysis

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Is yield farming really dead?

it's easy to just follow what everyone say,

but do u have the ability to know why?

Think deeper use Root Cause Analysis

A short thread on

• 📍 why most yield farming is dead

• 📍 what hidden farm is actually 🔥

• 📍 what will bring yield farming back

independent thinking makes a good investor,

thinking deeper into the root cause of problems helps u identify hidden opportunities systematically, catalyst to trigger turning points.

This is an example of using root cause analysis to thinking deeper into

Yield farming as example

📍Symptoms

• TVL is dropping

• Everyone keep saying yield farming is dead

• IL is scary bro

📍Problem

• APY is not high enough for people to ape

• Too many hacks

• Most people don't understand what is "exposure" of farm such as IL

📍Cause

APY = Trading fee & Emission incentive tokens

❌Trading fee is low overall

Emission incentive tokens has been the core contributor of the high apys but what supported the price of these emission tokens?

buyers who wanted to speculate on the price of the next uniswap

With low hopium in the market n everyone is just farming n dumping due to repeating playbooks of dex fork there are no buy pressure towards these emission tokens.

I would identify the 📍Cause as

• Lack of trust towards the dex token

• High sell pressure

Finding opportunities

What might make a good yield farm opportunity

@aerodromefi

✅ Proven team/ contracts that would be hacked from OP

✅ People have more faith in $AERO , higher hopium, lower sell pressure

✅ capture top TVL of BASE likely capture top trading volume

See how much more simple is it to justify ur moves after u have a framework?

OK now lets think even deeper to find hidden market opportunities

Yield farming works when

Yield justify the exposure you have

So either the

• APY is so high ur exposure does not matter or your exposure is lower than ur APY

• And we also want the Emission token price to be more "stable" + low chance of rug

What is our exposure?

IL IL IL IL IL

i wont repeat this topic

but in short read the write thread below to understand IL for low volatility pair is actually very low, and u need not high apy to justify it

Heres a post on explaining

What is good yield?

- Emission tokens that are stable with good trading vol to pool tvl ratio

Where can u find this?

all the L2 is launching and all the top dex are rushing into @LineaBuild @BuildOnBase @0xPolygonDeFi

how are these top dex going to fight for tvl?

emission, emission, emission

some further reading for u guys

BTC/ETH farming strategy on new chains

https://twitter.com/2lambro/status/1673516862678904833

3 things i look for in new chains

https://twitter.com/2lambro/status/1664448359262978048