How I'm Earning Yield on My ETH
Similar to what I outlined in my stablecoin farming strategy article, my primary interests are:
- Not having to constantly monitor everything
- Sleeping well at night
- Being smart about taxes and getting long-term capital gains
- Finding the best yield
So I think about my ETH in two stacks. A more active farming stack where I’m looking for the best yield with less focus on tax efficiency, and a large more passive stack that I just wnat to let sit forever.
The larger stack I currently have in Lido stETH sitting in my wallet. 3.8% is still pretty good, and now that I can use it as collateral in AAVE, I can always borrow against it if I need some liquidity for other things. I also don’t want to introduce too many platform risks for my larger, more passive ETH.
The smaller, more active stack I’m currently farming the cxETH-ETH pool on Polygon. This is a synthetic ETH-pegged asset created by Celsius, which is backed 1:1 with ETH. You can trade cxETH for ETH any time on their site, so I consider it quite a bit lower risk than other synthetic ETH assets. I also know one of the guys at Celsius who helped build it, so I feel quite good about its security.
Since this pool is currently paying 16.5%, autocompounded on Beefy Finance, it’s the best ETH-pegged liquidity pool by far. It’s even better than the RocketPoolETH one on Convex by about 5%.
So I have about 80% of my ETH parked in stETH, and the other 20% farming this cxETH pool on Polygon. I’ll probably keep farming this pool until something better pops up, or until it gets too diluted and the RocketPoolETH option starts paying more.
But this is a strategy I’m happy to let sit and run for months, and don’t feel like I need to constantly check on. Getting that, plus a great return, is a huge win in my book.
If you find anything else though, share it below for the other paying members to riff on!