Disclaimer: This article is intended solely as a sharing of my earnings, not as financial advice, and is not a recommendation or basis for any investment.
I've been a Hodler since 2013. And apart from collecting more bitcoin and high-quality crypto assets, I also invest in DeFi projects & trade stocks.
I began experimenting with synthetic asset projects a few years ago (mainly Synthetix and Mirror, UMA), sharpened my investment mindset throughout the process to implement strategies to maximize returns or minimize risks.
I recently started mining Phantom's mainnet launch pool after a Conflux AMA and reading the code audit report. (This is one of Conflux's invested projects) After a few days of mining, I want to share with you all some of my earning results and my mining experience. Hope this helps those who are thinking about joining the event.
- What exactly is a "synthetic asset"?
As far as I can tell, synthetic assets are a "cross-market" investment vehicle. For example, if I had the majority of my assets in digital coins and wanted to invest in Tesla stock, I would have to transfer my assets, open a USD stock account, and wait a few days before trading without a synthetic asset platform. In contrast, the DeFi synthetic asset program allows investors to use cryptocurrencies to invest in other asset classes.
For Phantom, the supported pAsset categories are cryptocurrencies and commodities. Stocks and NFT will also be available on the official website in the near future.
By clicking the build button, you can begin creating synthetic assets that can then be traded or used in liquidity mining. Phantoms reward liquidity providers with PHM tokens.
2. How to estimate the price of PHM?
Phantoms reward liquidity providers with PHM tokens. The APY (Annual Percentage Yield) is the most important consideration for anyone investing in DeFi projects. The APY calculation in this article is based on the estimated PHM price methodology described below.
Currently, there is no public price for PHM before IDO. When estimating the price, I used Coinmarketcap data to compare the market cap of other synthetic asset projects.
- Synthetix market cap: $2 billion +
- Mirror market cap: $1 billion +
- Lina: $400 million +
Phantom is in the same league with well-known investors such as Conflux, NGC, and Open DeFi. Using the most conservative estimate of a total market capitalization of $100M, a PHM calculated value of 0.01 USDT.
3.What is the APY of Launch Pool?
Phantom previously announced a total reward of 21 million PHM for 6 coin pairs during 30 days of the Launch Pool liquidity mining period, accounting for 0.21% of total circulation.
Based on previous experience, I decided to invest the majority of my funds in cUSDT-pETH. The reason for this is that the average user is hesitant to participate, so the earnings share should be higher.
Based on the revenue figures, it appears that my estimate is correct.
Highest yield: cUSDT-pETH, followed by cUSDT-pBTC
I used 30,000 u of LP to get a total of over 29,000 PHM in 22 hours. The APY at PHM 0.01u is approximately 389%.
The returns on cUSDT-pBTC are slightly lower than those on cUSDT-pETH, with an APY of around 362 %.
The rest of the gold and silver gains are similar with a lower minimum collateral rate, implying that the use of funds will be efficient. It is best for everyone to choose a pair with a large reward pool and fewer total assets according to the current share.
The pAsset ratio can be found at https://cfx.phm.finance/.
Low risk options: CFX-pCFX and cMOON-pMOON
These two community-reward token pairs have no risk of being liquidated, making them almost free (except for transaction fees) and suitable for users with a low-risk appetite. Because there are fewer people holding cMoon, it is expected to receive a larger share of the reward.
More advice:
- In fact, returns depend on the number of participants. Phantom's home page will display the current pAsset asset distribution; choose a trading pair with a lower asset distribution for a higher yield.
- Invest early: The above-mentioned APY is the current situation, and it will fall as more liquidity is pledged.
- To avoid unnecessary retrievals, think before you act. The withdrawal of collateral (withdraw and close) will incur a fee of 1%.
- Don't use all of your assets to build assets. Reserve some or matching pairs and some for gas. For example, If you have 30,000 cUSDT, you should probably use 20,000 to build pAssets and the remaining 10,000 to create LP token pairs & pay the gas fee.
How do I get involved in Launch Pool liquidity mining?
I follow the official Medium step-by-step guide, you may find it here https://phantomdefi.medium.com/phantom-mainnet-reward-mining-instructions-c7e35a1c98c8.
Someone in Telegram mentioned that there are two ways to participate in mining: "create pAsset" and "buy pAsset," here are my thoughts.
- Directly build pAsset: Suitable for those with a large amount of money; the absolute return is higher. The direct purchase pAsset on DEX will have a lot of slippages because moonswap is generally liquid.
- Buy pAsset from moonswap and pair it (be careful not to buy all assets as p-assets as I mentioned above), suitable for small-scale assets investors, the capital utilization rate is higher, but the absolute return may be lower.
Advanced Play on Synthetic Assets: Using crypto assets to indirectly invest in other market assets.
In fact, the creation of pAssets and the mining of liquidity are not the main goals of the synthetic assets project. The greatest value of DeFi synthetic assets is that they make it easier for people to trade traditional financial assets.
For example, you can invest in London gold and silver by constructing pXAU and pXAG and profit from price fluctuations in gold and silver, and I am currently investigating this strategy. Also, I hope Phantom will soon go live with stock assets.
Wish you all a prosperous mining experience.
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