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Study: Yield aggregators continue to show profits despite crypto winter

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A new study published on the 4th of October 2022 reveals yield aggregators continue to reap profits despite the recent crypto winter. The research demonstrates how yield farming and lending protocols consistently produce double-digit annual percentage yields (APYs) despite the crypto market facing a bear run throughout 2022.

Data compiled by Bolide Finance shows that DeFi companies such as CREAM, Dforce, and Valas continued to post impressive results in the first and second quarters of 2022. Farming and yield aggregators fared similarly, with companies such as Acryptos posting around 7% yield in May and June, Beefy finance posted a 3.6% yield for the same period, and Bolide reported a 15% return for investors off the back of a boosting campaign. 

The data was collected from dune over the last 7 months and compiled by Bolide based on the results of yield aggregators, lending, and farming. In the farming sector, data was collected from Biswap, Ellipse, Mdex, Nomiswap, and Pancakeswap. For yield aggregators, information was drawn from Acryptos, Autofam, Beefy Finance, killswitch, and Bolide, whereas CREAM, Valas, Dforce, Liqee, and Venus represent results in DeFi lending.

Generally, the yield farming sector has remained strong over 2022 as investors look to change their strategies, preferring to trade less, hold their coins, and earn a stable yield until the crypto winter passes. Overall, the DeFi sector seems to be maturing and responding to market changes and investors’ needs much faster than most staking methods.

THE CRYPTO WINTER AND RISING POPULARITY OF YIELD AGGREGATORS

The term crypto winter refers to a bear market or period of depressed digital coin prices in the market. Since the peak of 2021, cryptocurrencies have seen around $1.9 trillion wiped off their value, the biggest fall recorded in the industry’s history.

Despite these well-documented problems, many analysts remain bullish over the mid to long-term prospects for the crypto market, considering the current downturn and depressed crypto prices an excellent buying opportunity.

Edith Yeung, a partner at venture capital firm Race Capital refers to crypto investing as ‘a long-term play’, adding that ‘Crypto is about Web3. Many traders and investors are now taking a long-term approach to cryptocurrency investing and choosing to stake or farm their crypto assets. Yield farming or liquidity mining is a potentially profitable way to generate a passive income with cryptocurrency assets. Yield aggregators help the crypto community build sustainable annual percentage yields (APYs) while automating the staking process and maximizing returns by auto compounding.