A Few Days on the Yield Farm
Well howdy partner and welcome to the farm.! It has only been a few days since I first started yield farming last week on Wednesday but I wanted to give you a bushel of my initial thoughts. As I wrote on the day I started in the article The Animal Farm - My First Attempt at Yield Farming, the whole idea of it was rather intimidating and overwhelming. It is obvious that people are interested because I found the article posted in a couple places on Reddit and a copy even showed up in my personal email account - stick that in your grain elevator why don't you....
A couple of key points from the first week on The Animal Farm are below:
My PIGS disappeared or so I thought
So I tested a DOGS/WBNB LP farm and after putting in some the first day just to make sure all the processes worked correctly I bought some more DOGS to created more Liquidity Pool (LP) tokens. After adding them to the farm, all my PIGS tokens (crops, I mean rewards) gained in the first day were gone. Little did I know that once you add more LP tokens your current reward tokens go straight to your wallet. The bonus here is that you don't pay any gas fees.
Turn PIGS into BUSD
Once I had PIGS in my Metamask wallet I was able to add them to the Pig Pen. Your PIGS here act as a fertilizer and you get rewarded in BUSD so not only are you getting rewards from the farm but also by staking the rewards from the farm. BUSD is the stable coin on the Binance Smart Chain so you can covert those into real dollars or use those rewards to create more LP tokens - now that is a lot of cultivating. One reward leads to another which leads to another - I kinda like this farming thing.
Gas fees are always what they appear to be
I held off "harvesting" my first set of PIGS until the gas fees wouldn't kill the profit. The farm said gas fees would be about .01 BNB which worked out close to $5 at the time so I decide to hold off until I had at least $50 worth of PIGS to limit the fee to 10% or less. When I converted them, however, my actual gas fees were roughly .002 or about $0.80 which made me feel like I was driving a real fancy tractor. That said, I can imagine if you are yield farming on an Ethereum Network fees could be a big deal and really need to be taken into account or you will be put out to pasture.
Overall Results
Despite the astronomical returns shown, overall my initial investment is down all things considered. I haven't gone into all the mechanics yet but with crypto down a bit since I first got involved last week I'm not too worried. There are also some deflationary aspects to farming, so combining the two it makes sense to be down a little.
Overall I put a little over $1,030 into the farm and am down nearly $30 overall. The farm value is down to about $927 but that is made up almost with the $80 in PIG rewards. BNB is down since I first stuck it into the farm as well so if I was just holding those coins I'd probably be down more. As I said in my article last week, I am not too concerned with losses as this is a learning experience more than anything. My overalls are finally beginning to fit right.
Yeehaw - Farming is Fun!
My biggest takeaway so far is that farming is pretty fun. While I certainly enjoy passive income, there is a little more involved with yield farming. I check in a couple times a day to see how many PIGS the farm has generated and also take a peek at the BUSD my harvested PIGS are generating in the Pig Pen which is still pretty small at this point. But the point of my farm is to grow the number of PIGS I have so that is where the focus will be early on in my agricultural adventures. There is supposed to be a new feature coming giving you a new way to stake PIGS that I'm excited about.
Going Forward
Once I am more comfortable with my first farm I plan on doing some more yield farming on different platforms. Within the Binance Smart Chain, I do plan on messing around with PancakeSwap since I've already had to use the platform a little to buy DOGS and create LP tokens when paired with BNB (or WBNB).
Eventually I'd like to have about 40% of my overall portfolio dedicated to yield farming assuming I continue to enjoy it and figure it out. I plan on splitting this up in to 4-5 different platforms so that 20-25% of my yield farming portfolio is invested in a different platforms to diversify and minimize risk. For example it could eventually look something like this:
25% Binance Smart Chain (The Animal Farm / Pancake Swap)
25% Polygon (Uniswap)
25% AAVE (Curve.Finance)
25% Ethereum (Sushiswap / 1inch)
I'd like to mix in newer farms like The Animal Farm with more established farms while also mixing in a couple of short term newer altcoin plays with high risk / high yields in shorter term plays to learn even more about yield farming.
That said, I'm still formulating a strategy around yield farming and my crypto portfolio overall since I'm fairly new to crypto overall. I do plan to hold about 40-50% overall in Bitcoin and Ethereum, 10-20% in other DeFi projects with about 40% in yield farming as stated above. I wonder if I'm eligible yet for FarmersOnly.com?
So are you into yield farming? Can you offer any tips about exchanges to use or strategies to employ?
