How to use DefiLlama’s Delta Neutral Yields to make >20% APY on your BTC, ETH, & USDC tokens

DefiLlama is a firm that provides open and transparent DeFi TVL and analytics. Recently, they announced the launch of their new product called Delta Neutral Yields. 

This product is a strategy finder for yields. Through the use of their massive database, you can find opportunities where you borrow a token and then farm with it. With this, you can get >20% APY on BTC, ETH, and USDC. Of course, this is relative to the risk involved. 

In this article, we will explore how to find the various leverage farms, and how to find arbitrage between lending pools and against yield aggregators. 

To begin earning those juicy yields, you would first need to go to DefiLlama’s site.

Once you get to the “Strategy Finder” page, you must choose the collateral token you want to use to execute this strategy.

For this exercise, we would be using the Ethereum token as our collateral.

If you take a close look at the picture above, you will see over 761 strategies. These strategies vary based on their relative risk-to-reward ratio. To that effect, let’s take a look at…

A) Leveraged farming of Ethereum staking

For this exercise, we will be using the more popular Aave protocol. Now, if you click on the arrow beside the “WETH ➞ WBTC ➞ WBTC” sign, it takes you directly to the reserve overview page for Ethereum on the Aave protocol.

Note: You will not always be taken to the Aave platform. The site you would be redirected to is dependent on the platform you click on while choosing your strategies.

From here, it gets pretty intuitive. 

1. Deposit WETH on aave

2. Borrow BTC

3. Stake it to get WBTC

4. Deposit on aave to borrow BTC again

5. Repeat this to leverage the farming 

This strategy nets you an APY of 63.23% on your BTC with only exposure to aave and ETH liquid staking!

B) Arbitrage between lending protocols

If you take a close look at the picture above, you’ll see that borrowing OP in granary costs -6.53%, but depositing OP in Iron Bank gives you 32.71%

That there is an arbitrage opportunity. You just need to borrow some OP tokens on granary and deposit them in Iron Bank to arbitrage the rates and earn 26% on your ETH!

C) Arbitrage against a yield aggregator

1. Supply ETH for 5.9% APY

2. Borrow Dai from Sonne Finance, paying -1.91% 

3. Deposit Dai in Reaper Farm for 15.7% APY

Now you are earning 16.22% APY on your ETH.

Conclusion

DefiLlama’s yield dashboard contains thousands of other strategies like the ones I’ve just shown above.  While looking for those juicy yields, don’t forget to use the project filter to eliminate any projects that you think are suspicious. This would allow you to narrow down the results and avoid certain risks.

It is also critical to understand that these are not “set and forget” farms. They all require active management to keep your loan’s health ratio above water and your position’s final APY in good shape. If you’re willing to put in the effort and risk, you should look into it.

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