Getting the best out of DeFi still requires unusual amounts of expertise, patience, and a willingness to embrace complexity.
Consider a yield-maximizing strategy popularized by degens: looping.
This technique typically requires four steps: Put your crypto up as collateral, generate a synthetic asset, swap it on a decentralized exchange like Curve, and then deposit back into the initial base position. Repeat to increase APY, so long as you’re comfortable with potential liquidation risk.
It’s a solid way to maximize DeFi yield, but risks getting eaten by fickle gas prices, and it can be a timesuck for users.
Enter Smart Farming
“Over the past few months, we have focused on developing our most innovative feature yet, appropriately called Smart Farming,” Metronome Co-founder and CEO Jordan Kruger told Sync.
Smart Farming (SF) packages those four hops into one set of transactions, looping a position in a fraction of the previous time. This simplifies the process by lessening gas and smoothing the user experience. Set a few basic parameters and users are ready to amplify their yield in one click.
Simpler Paths to Yield
“Smart Farming is a central use case for Metronome Synth,” Metronome Co-founder Zane Huffman explained. “Yield farmers post their productive assets (like Vesper pool-share tokens and ETH liquid staking tokens) as collateral to mint synthetic USD or ETH. Those assets can be converted back for more of the yield-bearing collateral on the open market. Users can work through a ‘looping’ strategy, where they continually mint-swap-deposit to multiply exposure to the yield opportunity.”
Kruger reiterated how SF removes “the need for manual work and offers a more efficient way to loop yield through a single transaction. This expands the capabilities of yield-bearing assets and streamlines the whole minting, swapping, and exchanging process to deliver a simplified, gas-sensitive result.”
Integration with Vesper Delivers Complete Experience
At launch, users of sister Bloq DeFi project Vesper Finance can mint-and-convert synthetics in one-click — enabling users to access the desired end state ‘looped’ position and achieve multiplied APY in a single motion.
“In that one click, one transaction,” Huffman stressed to Sync, “users aren’t looping over-and-over again all at once. Smart Farming actually takes advantage of a more nuanced, ‘flash-minting’ type of functionality.”
Initiating SF doesn’t mean having to “loop over-and-over through exchanges,” Huffman continued. “It’ll give users credit at the beginning of a transaction, minting a multiplier based on what’s first deposited. Then it will swap it one time back into the position.”
This saves precious time in price sensitive markets but, on the Ethereum mainnet, stands to bring gas fees down from as much as $500 to $1,000, to lows of $50-$100.