Analyzing the probable risk-free returns of Algorand, Avalanche, AAVE, and COMP

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During volatile markets, some traders resort to alternative solutions for consistent gains on cryptocurrency. For the same reason, yield farming has recently gained popularity, as staking/lending cryptocurrency for rewards through farming may provide larger returns than exchanging assets on cryptocurrency exchanges.

Furthermore, DeFi provides income through a portion in the liquidity pool, which can be transferred to other platforms, resulting in a large earning potential.

At the time of writing, Algorand was trading close to its two-year price ATH near $2, with its trade volumes seeing massive spikes too. ALGO also is a Yield Farming project that ranks among the market’s top-20, with a rise in the alt’s price corresponding to a hike in rewards too.

At the time of writing, Algorand had seen gains of 75% in one 24-hour window. Since the tokens being farmed are typically rewarded as the same token that is being staked, rewards must now be up by 70% in value. Thus, while it may be easier to farm stablecoins, Yield Farming projects on DeFi have offered double-digit ROIs. These are even greater now with the prices of certain alts on the rise.

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Some other high return options 

The Avalanche network is evolving as well, with more projects sprouting on the C-Chain following the recent introduction of the $180 million ‘Avalanche Rush’ incentives scheme. Surprisingly, large AVAX incentives following the alt’s recent ATH of $58.94 have proven to be a significant motivator for drawing greater attention to the ecosystem.

AVAX’s long-term and short-term ROIs were both positive, providing an additional incentive for new market entrants.

Furthermore, options such as Curve Finance, which has a total value locked of roughly 11 billion, provide interesting returns. However, its ROI was quite low when compared to ALGO because the alt traded 65 percent below its ATH. As a result, the incentives were also minimal.

Top players slacking?

Due to market confidence, top firms such as AAVE, COMP, and Yearn Finance continue to dominate the market. AAVE’s total value locked increased by 5.5 percent in the last day, while COMP’s TVL increased by 3 percent and Yearn’s increased by 2 percent. However, the hike was very modest in comparison to past periods, which could be attributed to the recent flash crash.

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Further, these cryptos had shown an independent market trajectory which, in a bull market, didn’t play out so well as AAVE and COMP saw losses from their last month tops. In fact, their one-month ROIs were negative at press time.

Thus, with more competition in the Yield Farming space, while the top players face no threat as of now, their low trade volume and prices can be repulsive for some market players.

According to a recent Glassnode report, depressed token prices (and thus reward values), alongside an increasingly huge volume of stablecoin capital participation, have been compressing yields.

Nonetheless, some of the new projects are offering good incentives to investors as a stream of income as flash crashes shock the crypto-verse.

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