Feel the Rush w Avalanche Liquidity Incentives

The Avalanche ecosystem is poised to capture the upcoming DeFi Winter.

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DeFi Slate Fam:

The long awaited Avalanche Rush is finally live and currently ongoing! Despite an initial selloff due to lackluster yields, capital is still continuing to flow into the AVAX ecosystem looking to take advantage of the various ongoing Liquidity Mining Programs. With bumped up yield incentives, numerous projects being built and new developments to be released, an opportunity may be presenting itself. 

Read on to learn more about the Avalanche Rush Program, the available yield opportunities and some new projects to watch out for.

Enjoy!

- Wassie


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Feel the Rush w Avalanche Liquidity Incentives

Avalanche Rush officially went live a few days ago led by leading DeFi platforms such as Aave and Curve. Since the initial announcement a month and a half ago, this has led to incredible growth in the Avalanche ecosystem with what is now $700M in allocated AVAX incentives, 461k wallet addresses, 335 projects, and nearly $5B in Total Value Locked (TVL). However, disappointment due to lower than expected incentives coupled with the launch of more attractive yield opportunities on other chains such as Fantom and Harmony resulted in significant amounts of capital leaving the ecosystem as seen through bridge withdrawals. The Avalanche team responded quickly, adjusting and bumping up yield incentives. With the recent sell-off and capital being deployed in other chains, it seems that an opportunity may be presenting itself.

Uniwhales Avalanche Bridge Tracker: Deposits vs Withdrawals in the past 2 weeks

Incentives to Build on Avalanche

Avalanche’s low transaction fees and sub-second ‘time-to-finality’ on transactions makes an attractive case for developers to launch their products on AVAX. This coupled with the massive incentive program has been a leading contributor to the exponential growth of DeFi on Avalanche causing TVL to skyrocket from just $312.2M on Aug. 18 to $4.93B as of Oct. 8 (~ Over 15x).

Avalanche TVL from DeFiLlama

As of writing, 13 protocols have since been included in the Avalanche Rush Program with 9 of them to receive AVAX incentives from the Avalanche Foundation. These projects include a variety of Liquidity Market Protocols, Decentralized Exchanges (DEXes), Autocompounders, DEX Aggregators, Launchpads and Gamified DeFi Hubs. 

Below is a list of the current ongoing liquidity mining incentives for each of these protocols.

Protocol

Liquidity Mining Incentives

Aave

Curve

$7M AVAX

BenQi

$7M AVAX

Sushi

$15M SUSHI + AVAX

Pangolin

$2M AVAX

Kyber Network

$5M KYBER + AVAX

StakeDAO

$20M AVAX

YieldYak

$100K AVAX

Trader Joe

$20M JOE + AVAX

Protocol Liquidity Mining Incentive Allocations on Avalanche

Main Yield Opportunities

Users looking to get a piece of the pie should consider the lucrative incentives for this current phase of the Avalanche Rush Program which has both Aave and Curve at the headlines given the huge AVAX incentives allocated for them. This shouldn’t also come as a surprise as these protocols are considered safer due to having been battle-tested across multiple chains and gone through numerous audits. 

However, Avalanche also puts importance on supporting native ecosystem projects such as Trader Joe (DEX), Benqi (lending protocol), and Pangolin (DEX) among many others. An interesting dynamic to keep in mind is the tendency for native ecosystem projects to perform better compared to their larger, more-established, multichain counterparts. A big reason for this is perhaps their ability to better incentivize users through a more aggressive token emission model.

AVAX Ecosystem Projects sorted based on Total Value Locked (TVL) 

With the bumped up rewards, users can take advantage of several main yield opportunities such as the ones listed below: 

Aave (Liquidity Market Protocol)
  • With the bumped up AVAX incentives, users can expect rates up to 12.71% by lending their assets on the Aave Market

Aave Lending / Borrowing Rates on AVAX

Curve (Stablecoin Liquidity Pool)
  • On both the Aave USD & atricrypto pools, users can expect an additional 28% and 39% respectively in WAVAX incentives on top of their current base pool APYs

Curve Rates on AVAX

Benqi (Algorithmic Liquidity Market Protocol)
  • Benqi, a native ecosystem lending protocol, was one of the first to receive AVAX incentives to reward its depositors

  • It recently concluded it’s initial $3M AVAX incentive distribution for early depositors and was recently renewed with a $4M AVAX incentive program

  • Users can deposit their assets similar to Aave and benefit from the incentives of both AVAX and its native governance token (Qi) for double rewards

Benqi Lending / Borrowing Rates

Trader Joe & Pangolin (Native DEXs on Avalanche)
  • As the top 2 native DEXs on Avalanche, both Trader Joe & Pangolin are set to benefit the most from Avalanche Rush with a $20M & $2M incentive program respectively

  • Similar to Benqi, users can provide liquidity in various pools to farm double rewards but can also choose to deposit in single-sided staking pools to earn either a portion of platform trading fees, incentivized tokens or AVAX incentives altogether

Trader Joe Farming Pool & Single Staking Rates

Pangolin Farming Pool Rates

Other Opportunities

The above are just a few of the many exciting protocols in the Avalanche Ecosystem. 

Though the list below may not all be yield-farming, AVAX incentivized opportunities, users should still consider taking a look at the following protocols which could perform well. Since these protocols are newer, users should do their due diligence before using any of them.

Sushi - Coming soon, the launch of Sushi on Avalanche will definitely be one to look out for as they not only bring with them a combined $15M liquidity incentive but also their entire product suite which they have continuously been developing and improving on

Yield Yak, Snowball, Cycle Finance - These three yield optimizers, though not incentivized with AVAX rewards, can help users earn more yield via their auto compounding yield farming strategies

Wonderland - First decentralized reserve currency protocol backed by a basket of assets giving it an intrinsic value that it cannot fall below

Hubble Exchange - As the trend towards decentralization continues, decentralized futures protocols are well positioned to disrupt their centralized counterparts. Hubble exchange seeks to establish itself as the first multi-collateral, cross-magined perpetual futures protocol on Avalanche

Penguin Finance - A gamified DeFi Hub, Penguin Finance brings yield farming to a whole new level with its high APY farms, no impermanent loss auto compounding nests, a launchpad, a king of the hill game and many more exciting products in its pipeline

Kalao - A Marketplace, Gallery and Metaverse experience built into one ecosystem. That is what Kalao aims to be as it leverages the technology of NFTs, VR and social networks to create the future of digital and virtual worlds

Closing Thoughts

The incentives of Avalanche Rush brought more capital into the ecosystem and enticed more developers to launch their projects on AVAX. Despite the many cloned projects being launched, we’ve often seen new paradigms come about as a result of innovation through imitation. In a multichain world where everyone is looking for the best yield opportunities and capital can easily flow elsewhere, observing what happens in the AVAX ecosystem could serve as a blueprint for the other ecosystems which just announced liquidity mining incentive programs as well. It remains to be seen whether or not this momentum sustains but for the most part, early signs are positive and indicate the possibility for further growth.


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⚠️ DISCLAIMER: Investing into cryptocurrency and DeFi platforms comes with inherent risk including technical risk, human error, platform failure and more. At certain points throughout this post, we might get commission for promoting certain projects, if this is the case we will always make sure it is clear. We are strictly an educational content platform, nothing we offer is financial advice. We are not professionals or licensed advisors.


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