I wound up getting a lot more done yesterday that I figured I would, considering how the day started off. I exited the rest of my Badger DIGG LP, put some wBTC to work in KLON and Vesper pools instead. I doubled up my Alchemix position and spent some time mulling over the Liquitiy pools.
I’ve been in Badger since mid-January, and it’s probably my trade of the year. I went in hard, a little at first, then YOLO a couple days after. It paid off remarkably well and has basically funded most of my retirement stablecoin fund. I’d been hoping for a turnaround with DIGG, their rebasing token that’s supposed to follow the price of BTC, but it’s been a loss. I’d exited my BADGER LPs a few weeks ago, but had been holding out hope for some kind of turnaround. My patience was reached yesterday, so I pulled the rest and sold it for wBTC. I still retain a moonbag of both Badger and DIGG, but it’s a fraction of the value that I held during the height of my position a back in late February. I spent several hours trying to compute stake for the family business, and basically figured out that I had enough wBTC left over to give everyone their original stake back. It’s not quite fair on the surface, considering the gains that we’ve managed to pull off, but the primary goal right now is to compute shares and separate these funds out from the rest of my wallet. I still haven’t figured out the most economical way to do it, but a DaoHaus/Moloch DAO tied to a Gnosis Safe might be the best way to do that. More to come.
Liquity has been on my radar for a bit. I came across it via an Epicenter pod, and I gave it a listen despite the fact that I’ve never used a collateralized debt vault like Maker. From my understanding, these protocols are primarily used for leveraging oneself, and I’ve never felt comfortable with the risk involved in doing something like that. Still, Liquity seemed interesting. I spent a good bit of time reading over this Jon Wu thread on it, and mulling over how I would position myself. I have a sizable stack in Index Coop’s ETH 2x FLI token, so this might be an alternative, especially if ETH goes sideways for a while and the FLI fees start eating into my position. Of course I’d probably want to farm their governance token. I never made it that far into opening a trove yet, but it’s on my mind.
Finding places to put your wBTC to work in DeFi is a bit of a challenge. Yields are very low unless you’re willing to put it to use as LP. I’m not willing to risk it these days, but I did finally take a small LP on KLON. I’d been involved in the launch and staked some wBTC in pool 1 for a bit, but wasn’t terribly keen on the project or willing to risk taking a chance on their kBTC coin. Algo stablecoins are hard, and I feared losing the peg. It’s been holding up, and after watching what’s going on with DIGG and FEI, I’ve come to the conclusion that the chance of a cataclysmic failure of the kBTC is fairly low. It probably would have happened by now. kBTC actually spends more time over the peg than under it, so I went ahead and staked the kBTC-wBTC pool. That 230% APY, even if it is paid in KlonX, is probably the best deal around right now. Since I’m not apeing into anything, I also went and spread some funds back on Vesper. The APYs are more in line with the rest of DeFi, about five or eight percent, but they’re boosting it 30% with VSP rewards, which can be compounded. I’m still on the hunt for other opportunities that don’t seem sketchy or overly risky.
And yes, I did go and double up my Alchemix position, buying more ALCX this time instead of increasing my debt position. I noticed that the debt’s maturation slipped a few months, back to January of 2023, so I’m going to keep monitoring it and see how it looks by June 1. I don’t foresee a scenario that allows me to pay off the mortgage using Alchemix, but I will probably be able to do it for my student loans in September. I just don’t think I would be able to come up with sufficient liquidity for an overcollateralized loan. And the risk on such a new protocol is just way too high. I might potentially be able to swing it if I used IRA funds, but the tax ramifications of that would be even greater than just paying off the debt straightforward.
Last note, I’ve been trying to figure out what to do with $MUG. It’s been doing well, breaking $350 and holding $300 right now. There just isn’t any need for it right now. Index Coop launched their Metaverse product, MVI, and I haven’t been able to bring myself to provide liquidity for it other than a small Honeyswap pool on xDAI. A friend recommended that I setup wBTC and ETH pools for it over there, and let the bots go to town arbitraging the pools. I’m not sure it’s worth the trouble, but at least it’s something. I haven’t even done any fund management since I launched it, not one trade despite some noticeable churn in the top 10. The MVI set holds about fifteen positions right now, compared to ten in MUG. I could just sell off all the positions in MUG and buy MVI with it and call it a day, but I supposed I’ll just wait for now.