DeFi for Miners
Harness the Power of FOMO
Fear of missing out (FOMO) is a powerful force. FOMO is particularly important in a speculative market like ours; every so often we cryptosexuals need a few “Thanks to Dogecoin I retired at 28” headlines to keep this whole thing humming.
FOMO struck me while listening to Kevin Rose’s excellent Modern Finance podcast while driving back and forth among our four crypto growhouses. As I raced to reboot modems and swap switches, I listened to tales of high yields, liquidity mining, and NFT flipping. As I tested troublesome CAT6 cables I began to feel like a dirty mechanic down in the bilges, sweating to keep the engines of Web 3.0 running, while the cool DeFi kids drank champagne up on the fantail. (That’s a nautical reference, fyi.)
I thought, Hey man, I’m making this blockchain ship go! I should be sipping some of that champagne! Serious FOMO for sure. I decided to learn more about DeFi.
(This is the part of the blog where we strongly state that neither Print Crypto nor myself are professional investment advisors. This blog is for entertainment and information only. All investments incur risk.)
As far as DeFi projects go, Thorswap seemed the most compelling. Thorchain is the cross-chain protocol that provides the ability to swap native tokens across chains, ie, you can swap BTC for ETH for LTC without intermediary assets, and also without know your customer (KYC). This seems like a useful capability with a promising future.
To execute these trades, Thorswap needs plenty of liquid assets on hand, and they pay well to hold them. On the day I dove in, they were paying around 40% annual yield (APY) to hold BTC, ETH, and LTC.
So I sat down to figure out how to drink that champagne. Now listen guys. I’m a jet pilot. I also write cyber ops policy for the world’s second largest bureaucracy. But still, figuring out how to add tokens into the protocol was not for babies. Getting the coins into the liquidity pool required either linking Trust Wallet or downloading the Thorswap desktop app, and using its installed wallets.
(There’s apparently a helpful Thorchain Discord community as well, but asking for help would just be so... Not who we are as miners!)
Adding liquidity to the pool requires trading for an equal amount of RUNE, Thorchain’s native token. Your liquidity earns you a share of the fees collected on all of those cross-chain swaps. To kick the tires, I threw $300 worth of boring-yet-underrated low-fee LTC into the pool.
So 40% APY on day one. On day three I checked again and made a coffee spit-take when I saw…
That’s right. 63% APY on boring-yet-underrated low-fee LTC!
Yeah I’m pretty much hooked.
The biggest drawback so far, your fate is entangled with RUNE (which I admit sounds like something a D&D NPC would say.) If RUNE drops your overall value drops. But you’re also diversifying a bit along the way. There are other more existential risks; Thorchain was famously hacked by a greyhat who wanted them to be more careful.
FOMO got me and I learned a bit. I’m going to make a few more small bets with house money to see how it works out. Don’t worry, my next guest post won’t be about flipping NFTs. (...or will it? These are pretty rad!)
-Andy Howell is a retired military officer, beltway bandit, gamer dad, and co-owner of Green Heron Strategy, LLC.
