Arrakis, Beefy Finance | Hidden Gems – DeFi
Review Date: April 22, 2022
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We scored over 50 projects this week, and these are 2 DeFi yield farming opportunities we think you should know about:
- Arrakis – MATIC farming
- Beefy Finance – NEAR, MATIC, LUNA, UST, FTM, and more
Please keep in mind that some of these projects have not yet been subjected to our code review process, but we want to call them out here for preliminarily catching our eye based on our fundamental analysis process.
Arrakis (77%)
Arrakis’s goal as a protocol is to become web3’s “liquidity layer” by solving a number of the current issues that projects face today:
- Uniswap V3 created liquidity improvements over V2, but providing liquidity is now more complex and the risks are actually higher if done improperly.
- The current multichain landscape has made liquidity more fragmented and difficult to manage.
Arrakis has been working on solving these issues since February 2021 when the project was called G-UNI, a sub-project started within Gelato Network. As the project attracted more TVL and its vision separated further from Gelato, a vote was taken to spin it out into its own independently acting project.
Why we like it
There are two main reasons to pay attention to Arrakis: the future potential of the project and its token when it launches (the current estimate is 6-8 weeks), and the current yield farming opportunity.
The key feature of the token when it launches (planned to be called SPICE, Arrakis and SPICE are terms from the Dune novel and recent movie) is that it will have a similar emission and gauge/voting system that Curve has, only applied to Uniswap. The official documentation and tokenomics aren’t released yet, but following updates and being early users of the platform can potentially lead to collecting significant early emissions.
In the shorter term, there are some great rewards for providing liquidity on the platform. Polygon partnered with Arrakis and provided them with $3M in MATIC rewards to boost liquidity on the platform. The MATIC rewards will be given to liquidity providers until the end of June. Some highlighted rewards:
- 12% APR of MATIC rewards for providing a stablecoin pair of USDC / USDT
- 38% for USDC / WETH
- 60% for WMATIC / WETH
- 87% for WMATIC / AAVE
This is an attractive opportunity as MATIC is a great long-term project, and since Arrakis has already been operating for more than a year, it has been audited multiple times.
Investors
Arrakis hasn’t received any direct funding, but back when it was operating as G-UNI within Gelato, some of Gelato resources were allocated toward its development. On 9/30/21, Gelato raised $11M from Dragonfly Capital, ParaFi Capital, Nascent, and Stani Kulechov (founder of Aave).
The team
The team is anonymous, but there are 10 members actively contributing with more being added.
Token Utility
TBA. Full details of the SPICE token will be released in the coming weeks.
Action Steps
- If interested in various liquidity providing options on Polygon to earn MATIC, explore https://beta.arrakis.finance/#/pools
- If interested in Arrakis as a platform and its future token launch, follow updates here:
- Twitter: https://twitter.com/ArrakisFinance
Discord: https://discord.gg/arrakisfinance
Beefy Finance (76%)
Beefy Finance is a decentralized, multi-chain yield optimizer. Beefy’s value as a protocol comes from two key features: it is a clear aggregator and facilitator of yield farming opportunities – different chains, coins, and yields can all be viewed from the main page with filtering options, and a built-in zapper tool helps easily convert coins into the ones required to participate in liquidity providing. Additionally, vaults are auto-compounding, so rewards are stacked and re-invested quicker and without any additional fees, like gas. There are also multiple audits that go into the protocol itself, and new vaults when they are created. Scrolling down to the Strategy section inside of any vault will show its calculated safety score and audit information.
Why we like it
Beefy is worth looking at for two reasons, the yield opportunities that it features and the underlying token. Beefy is constantly adding new vaults, here are just some of the recent opportunities:
- NEAR / MATIC on Polygon, 108% APY
- UST / FTM on Fantom, 57% APY
- LUNA / FTM on Fantom, 47% APY
Additionally, Beefy has its own underlying token, BIFI. Token stakers are entitled to a small percent of the yield generated by every vault run on Beefy, and BIFI can either be staked in the BIFI Maxi vault to earn more BIFI or in a native asset pool to earn more of that asset (ETH, BNB, FTM, etc). BIFI is also purely deflationary as the max supply has been minted, and BIFI rewards for BIFI Maxi stakers are bought on the open market, creating slow but steady daily buy pressure.
As the project has been out for a while, BIFI is unlikely to return large multiples – but if the price sees a dip in the future, it could be a strong low risk/medium reward buy.
The Team
The team is anonymous but has approximately 12 smart contract developers to review the code and structure of all vaults that are being created. Beefy has also employed multiple rounds of audits to work toward the safety of the protocol and vaults. The protocol was first audited by DefiYield, and more recently twice by Certik as updates were released.
Token Utility
The protocol collects fees and redistributes almost all of them to BIFI token stakers. As such, holding the token creates a dividend-like cash flow tied to the underlying earnings of the entire protocol. It also grants voting rights in the DAO decision-making process.
Action Steps
- Visit https://app.beefy.com/ and see if any coins you hold or are interested in have attractive yield and risk characteristics. Use the fields on top to filter by a preferred chain or token, or simply scroll through the list of vaults.
- Follow https://twitter.com/beefyfinance to track newly created vaults and farming opportunities.
- Consider if any of the BIFI / native vaults have favorable returns, or if the BIFI token itself is a good fit for your portfolio, especially if the price sees a notable dip in the future to make the valuation more attractive.
