DeFi farming on Polygon

An aspiring comprehensive guide

By Mark G. Koh 

@hawkerize

https://www.linkedin.com/in/markgkoh/

Opportunity Wizard of Bebop Asia

also the creator of Megacorptcg.com / megacorprpg.com

Cofounder Refermany.com

I'm not going to waste time writing a story you might skim, so I shall be brief on the exposition: Since 1 may 2021 I have personally been earnestly yield farming on Polygon. It has been very profitable for me. And I think you can enjoy these gainz too. A big disclaimer before you read any further - you are responsible for your own decisions, whatever I write here is NOT INVESTMENT ADVICE.

Quickstart

1. Get MetaMask chrome browser extension (https://chrome.google.com/webstore/detail/metamask/nkbihfbeogaeaoehlefnkodbefgpgknn?hl=en)
   
   
2. Add USDC token to it
   
   
3. Send USDC tokens you want there (https://metamask.zendesk.com/hc/en-us/articles/360028141672-Direct-deposit-receive-tokens-to-your-MetaMask-wallet)
   
   
4. Add matic mainnet to the MetaMask
   
   How to guide -
   https://metamask.zendesk.com/hc/en-us/articles/360043227612-How-to-add-custom-Network-RPC-and-or-Block-Explorer
   
   Note: As matic is getting popular, this default public RPC might get congested
   You can use the polywhale private RPC:
   https://rpc-polywhale-mainnet.maticvigil.com/v1/9782146ec2ba6ae559d6ab5762169ce1a265519f
   
   
   
5. Go here, link MetaMask to this wallet https://wallet.matic.network/bridge/
   
   
6. Convert USDC token via this link to matic’s mainnet
   
   
7. Go to https://polycat.finance/?ref=0kOo77rQn00654oo78nS2R1O9p40p14Qs8Sp1r9oR9
   
   
8. Connect meta mask wallet
   
   
9. Navigate to 'pools'
10. Stake your USDC and start earning, come back and harvest. Click all confirm buttons whenever metamask asks you.

(note that I included a far cheaper method to replace steps 5 and 6 - navigate down to "onramps" but this is the default method)

What is Polygon

Official site: https://Polygon.technology/

Polygon (formerly known as Matic) is a protocol that acts like a 'layer 2' on top of Ethereum. Allowing much faster and almost-free transactions, but with the security of Ethereum as a settlement layer.

Why Polygon?

It’s cheaper, faster and better.

Saw a new asset that you want to buy at a dip? Instantaneously acquire it with a few clicks.

Want to trade out your peaking asset to a stablecoin in a volatile market? Hit swap. Bam, it's in USDT. Value locked in under 2 seconds.

Why now? 

Why now?  Despite the rage on mainstream media about where cryptocurrency, NFTs, and projects that have once been laughed at taking center stage (looking at you Doge), the whole universe (I'm exaggerating) is coming into Polygon, given that the advantages stated. Let's be honest Yield farmers are migrating en masse to Polygon https://cryptobriefing.com/yield-farmers-migrating-Polygon/. In fact, the amount of transactions on Polygon has surpassed Ethereum itself since may 18 https://cryptonews.com/news/Polygon-flips-ethereum-in-daily-transactions-price-hits-all-10351.htm and is now viewed as a direct competitor to BSC (Binance smart chain) where the majority of the 'traditional' (Can't believe we are calling them that) yield farms hail from.

If you don't know what yield-farming is, it's essentially utilising DeFi protocols to generate rather unbelievable returns vs anything in the traditional centralised finance space. 

A typical personal savings account in Singapore will net maybe 2.38% per annum (e.g.: OCBC, Standard Chartered - yeah free advertising for you, but no love eh) to perhaps the benchmarks set by hedge funds with APRs approximately 200-300%, which are very inaccessible to most mortals. The advent of DeFi puts the reach of higher returns and beyond into the hands of a much more democratised user base. 

For instance: https://learn.zapper.fi/articles/how-to-earn-with-SushiSwap-on-Polygon

Participation into liquidity pools, essentially means the user has fractional ownership of the distributed 'bank' that services that pair of cryptocurrencies. And boy, playing the bank is profitable.

In the current Polygon landscape, annual returns into the 1000%+ range can be rather common. No, that is not a typo. Not an extra zero.

Exhibit: APR of a new farm launched 23 may 2021 (https://www.blackswap.finance/Polysolar) no that's not infinite APR some projects list 'infinity' or '>billion%' because the theoretical APY given daily compounding would have so many zeros it would wreck the UI.

And the purpose of this article is to articulate what opportunities and pitfalls exist in this opportunity and to provide as comprehensive a toolkit as possible to approach Polygon and to start yield farming.

The title of this article is intentionally click baity but I have empirical proof: The gains from DeFi on Polygon has eclipsed my entire career as an amateur trader on crypto, even surpassing the meagre gains won from nexo.io, yield.app, and several BSC projects that I have observed and participated in. Gains are good at the moment (https://www.coindesk.com/Polygon-bitcoin-ether-crypto-market-rebounds ) due to the fact that Matic's price itself survived Elon-gate (https://edition.cnn.com/2021/05/19/business/elon-musk-bitcoin-crash/index.html) and the LP pool earnings are not yet shared among millions... yet. This is reinforced by titans of DeFi intentionally creating Polygon products - https://dappradar.com/Polygon/DeFi/1inch-network-on-Polygon

https://www.coindesk.com/DeFi-major-aave-working-with-Polygon-to-bypass-ethereum-congestion

make no mistake, typical crypto trading and staking on erc20, BSC is already fairly risky. This is next level-risky. But the potential upside is enormous on what could be the cutting-edge blockchain.

So let's begin by looking at some key terms to add to our DeFi vocabulary.

DeFi Jargon

While Coinmarket cap's Crypto glossary (https://coinmarketcap.com/alexandria/glossary) and this DeFi encyclopedia page https://academy.ivanontech.com/blog/DeFi-encyclopedia-the-ultimate-list-of-decentralized-finance-terms

provides quite a complete list of terminology, the short list here would be quite helpful in deciphering the common jargon used in context of DeFi farming. Not in alphabetical order.

Degen - degenerate. While the term degen does surface many times across DeFi, it usually refers to individuals and/or groups that behave in a predatory fashion towards yield farming, jumping in and trying to make as much profit as possible from highly risky (even questionable) projects and getting out rapidly. These days the term is used also as a badge of honour to claim 'hardcore-ness' in the space.

Chad - originally a derogatory term for the British equivalent of well... a dickhead. (Singaporeans: think Ah Beng), now it's used to describe someone successful (or thinks he is) in the context of Crypto. Adamant vaults even has a 'chad logo' for those farming pools they believe to be "chad worthy" . Usage- Person A: I got into Matic when it was 30 cents (now it's 1+) Person B: "You chad!" Note: Sometimes, Chads are equated with Degens. There is also such a thing as a Chad Degen.

LP- liquidity pair. This article provides a very in depth explanation: https://academy.binance.com/en/articles/what-are-liquidity-pools-in-DeFi

But TLDR: Its a pair of cryptocurrency assets that you 'stick together' to form an LP token. An LP token is a share of a LP pool, in which you are entitled to have a fraction of the fees earned.

IL - Impermanence loss. Very important fundamental concept when you are taking your first steps into DeFi/yield farming. since this article is focused specifically on the HOW of yield farming of Matic, allow me to recommend this as reading material to fully understand impermanent loss. https://blog.bancor.network/beginners-guide-to-getting-rekt-by-impermanent-loss-7c9510cb2f22

TLDR: When you create LP pairs, and their value drifts apart either by one or both assets gaining or losing value - you lose money overall. A rule of thumb is that if one of the assets 5x-es.... you lose 25% of your LP pair value to IL.

FOMO - Slang/acronym: fear of missing out - basically people thinking they will miss out on gains given the potential of a new yield farming project and they would 'fomo' or 'ape' in.

AMA - Acronym: ask me anything. Essentially a public forum (sometimes even by video or audio chat) with the management team of a DeFi project. 

Rekt - Slang: Wrecked. You will hear this often among younger crypto enthusiasts. E.g.: I got Rekt. Or just commenting on a project that went terribly: Rekt omg.

Slippage - you will see this while using swaps, the slippage % is the difference between the expected price and actual price, mostly due to high trading volatility or lack of liquidity for either asset. Importantly, you will find yourself adjusting the 'maximum slippage' setting in swaps with new native tokens or tokens with a transfer or reflection tax feature.

Shill - Slang: to promote. Broadcast. Spam people. Usually, a term used to indicate advertising. "Stop posting shill text of another project in our chat"

Autostaking

since the advent of Safemoon, autostaking has become a sexy mechanism because users simply need to hold it in their wallets to benefit from the reflection taxes (see below). Polygon has approximately 4 autostaking tokens: Moonwolf (WOLF), Blackswap's SOLAR, Polycake's PSYRUP, and of course Polymoon (which is not officially affiliated with the Safemoon team, but hey.)

Reflection tax

This is a fee paid when the token is transacted. Only a few tokens have reflection tax, some imho executed badly (e.g.: Polylion's LION) and the rest are the autostaking tokens which I provided examples above.

Multiplier

In staking pools and LP farms, you normally see a “x15” or even a “x100” tucked into a corner. This is a variable corresponding to the number of emissions going toward a specific pool. The most popular pools have higher variables to keep returns high, even while crowded as a balancing mechanism. That means - the emissions of rewards are distributed to ALL DeFi instruments on a project in proportion to the multiplier. To make sense of this, add all the multipliers of every single instrument (every pool, every lp pair) together and then divide the multiplier of the pool you are interested in by the total multipliers- this will give you the actual proportion of reward tokens emissions that that particular instrument is getting.

TLDR: The higher the better. 

rug/Rugpull

Basically means scam, or that the developers intended from the start to "pull the rug from beneath you" through malicious code or tokenomics or both. Bear in mind in community channels, some bad actors and/or competitors might call rug on a completely legitimate project just to damage their credibility and send their TVL away.

TVL

total locked value - meaning the total amount of assets of all kinds staked into the DeFi project

And the most important one:

DYOR - Do Your Own Research. No article or source of information, no matter how comprehensive and well researched should be thought of as bible truth. Trust yourself first and find as many resources as possible. 

Exhibit: Even Jesus was impressed.

Most DeFi projects (not just in Polygon) are growth-focused first, product-focused second. Anyone too used to traditional equities would also find this a red flag, but this is quite common to woo new investors to projects with crazy high APRs, we are talking returns in the 100%+ range all the way through to as high as 4000% (no I kid not) and then attempt to build a viable project out of the fees raised.

P.s.: Two Polygon projects that I have found to be pre-hype (2 of the gems imho) are moonwolf.io and orcinuslabs.ca read more in the "who's who" section.

The name of the game 

The strategy that IMHO should be implemented is to get a 100% nett return (i.e.: 1x your principal) as fast as possible and leave profits behind. With some guidance of true Chads, I have managed to 1.2x my meagre investments thus far, leaving 20% in to continue farming tokens.

But greed is the downfall of many a degen, double or even triple dipping once they have hit break even. It is recommended to take out your principal to your offramp as soon as you can, leaving only your profits (a.k.a "Gravy") to be able to farm indefinitely. 

Pull this off, and no matter what happens to the market, you are always up. 

The power of compounding

With each transaction costing approximately 70c USD on BSC at the time of writing, it makes no sense to harvest (costing gas fees), then restake (costing gas fees again) then ultimately take profit to fiat (again, gas fees for the third time). This is made worse when the gains are in single digits USD value, with the typical DeFi actions costing a sizable amount of the profit. With Polygon, this problem is entirely absent. I could choose to compound endlessly, as fast as my mouse click, wallet confirmation, and internet speed will allow. This gives rise to an entirely new form of DeFi activity that is unique to Polygon thus far: optimised auto-compounding. Note that this is also feasible even with micro sub-dollar values!

A few on Polygon thus far use the full potential of Polygon's speed and negligible fees to re-compound your investments (mainly LP stakes) by taking rewards given by incentive pools on QuickSwap and SushiSwap, swapping them automatically into new segments of your lp pair, re-pairing them, re-staking them all without any actions on the part of the user. This is really a passive income concept I could get behind.

Two projects that have tools to do this are Polywhale (see "ocean v2" and "reef") and Polycat (see "vaults"), Adamant vaults and beefy finance also have similar functionality, but do not compound as many times (Polywhale allegedly compounds every 2 minutes).

Exhibit: Polywhale.finance Telegram official english group (https://t.me/Polywhale) 0250hrs 22 may 2021

The who's who

(of Polygon DeFi farming projects)

Exhibit Source: https://dappradar.com/rankings/protocol/Polygon

Ranked by number of users

The pioneers

Polywhale

the first-ever yield farm on Polygon: Polywhale

https://Polywhale.finance

Polywhale is the OG of the Polygon DeFi landscape. At its peak, it had 150M TVL and even now, its Telegram channel seems to be a good place to get the sense of the sentiment of the entire DeFi scene in Polygon.

Its largely considered quite safe to stake into Polywhale, though the ROI is lower than most of the newer projects.

Admins: The One, Mr Smith

Polycat

https://Polycat.finance/?ref=0kOo77rQn00654oo78nS2R1O9p40p14Qs8Sp1r9oR9

Note: Polycat survived the first generation of "Poly-animal" yield farms appearing using cloned code in Polywhale's wake, but survived till this day with a stable native token price and a sizable community.

Admins: Finn

direct Fiat bridge- https://Polycat.finance/buy

https://vfat.tools/Polygon/Polycat

As written earlier, both Polywhale and Polycat have the most advanced yield aggregation tools in all of Polygon at the moment: automatic auto compounding pools.

The big boys

AAVE - https://app.aave.com/

SushiSwap https://app.sushi.com/swap

1inch https://app.1inch.io/#/137/swap/USDC/WOLF

The triad of the 'big 3' are the largest DeFi players on the planet fomo-ing into the Polygon landscape, bringing their massive billion-dollar TVLs with them. There’s not much I need to write here. They are the safest projects (by nature of them being huge) to invest in, but you will quickly find that their APYs are not as high as their Polygon-native counterparts.

Mainstays

(Full disclosures, some of these are referral links)

Polyzap - 

https://farm.Polyzap.finance?ref=0xBb77eDa00654bb78aF2E1B9c40c14Df8Fc1e9bE9

Polyzap pioneered time-locks for harvests on Polygon. 

Audited by Hashex and Techrate with a third audit by Certik underway. 

They also accrued a sizable TVL and their native token PZAP stabilized at 15 before dropping about 50% to an average of about 7-8 USD. 

The one irritating thing is that they don’t have a ‘harvest all’ function, forcing users to go into the farm and pool pages to manually harvest each one. 

Polyzap has also built their own exchange

Polybull - https://Polybull.finance/?ref=0kOo77rQn00654oo78nS2R1O9p40p14Qs8Sp1r9oR9

Take note that Polybull is about to transit to a new native token GBULL (golden bull) - https://docs.Polybull.finance/golden-bull/intro

The date for this transition as per their announcements is 5th June

Admin: Walter, the bull

Adamant vaults

https://adamant.finance/

A yield aggregator that helps to auto-compound various other project pools - aside from beefy, this has the most amount of options 

Interestingly this is the only yield aggregator that auto-compounds Iron finance pools even the single staking Titan pool which is very attractive.

Bear in mind adamant punishes you for unstaking within 3 days with a fee. 

They also reward their native token ADDY which has also to be vested for some time (presumably 3 months) or, you guessed it, you get a 0.5% fee. 

Polycake

https://www.Polycake.finance/

Audited by Techrate

They have a 'Cakehouse' farm that allows you to earn non-native tokens.

Polycake has launched the most expensive reflection tax token “PSYRUP” with some exclusive pools, one of which rewards in DAI which is fairly interesting, except that trading into Psyrup requires exclusively cake tokens. 

Blackwap 

https://www.blackswap.finance/

Blackswap was built by the same team as Blueswap on BSC. Their Telegram has a buggy bot that deletes users before they can post anything, so bear that in mind when looking to join their community.N

They are notably creating a wormhole feature that is a bridge between the BSC and Polygon networks. Most notably they have launched a second token with a 9% transfer tax “SOLAR”. 

up and coming

Iron finance

https://Polygon.iron.finance/

shockingly fast climb to 40+ million TVL

Checkout their IRON-USDC double stablecoin pair with over 200% APY

Admin: @raccooneu

Moonwolf -

https://moonwolf.io

My personal favourite) - intending to position as an NFT marketplace. their native token is WOLF

Their token is self-staking, meaning every transaction made with wolf rewards all holders of WOLF directly into their wallets as an airdrop

https://vfat.tools/Polygon/moonwolf/

Admin: White Wolf

Orcinus Labs

This project is attempting to build a decentralised social network customisable by users with their native token functioning as part of their consensus mechanism.

https://www.orcinuslabs.ca/

Admins: Shel and Rob

Graveyard

(projects that have been rugged or rekt) Mark's tip: DONT INVEST

Polyfox.finance - note: 0 TVL

https://Polylion.exchange/ - note: Not a rug, but token value plummeted hard to 0.11

Essential tools

vfat.tools/Polygon- very important no GUI tool to use to check how much you are earning on your DeFi farming. Note: certain projects like Polywhale have sections

(above) Exhibit: vfat.tools/Polygon displaying one of my DeFi project total yields - resulting in a nett gain of $3.18 USD a day with just a capital outlay of $377.02 That's one Bak Chor mee a day!

Swaps/exchanges

Make sure you are logged into the correct network (Matic Mainnet)

Quickswap.exchange - my personal favourite and the very first swap on Polygon with the largest volumes and liquidity.

1inch

SushiSwap

Offramp

Ascendex

https://ascendex.com/register?inviteCode=U3YP5VJFY

Full disclosure this is my referral link, do support me :)

Useful token native addresses

(to add to your Quickswap and MetaMask wallet)

just copy and paste.

• Krill token address: 0x05089C9EBFFa4F0AcA269e32056b1b36B37ED71b
• Pzap token address: 0xeb2778f74E5ee038E67AA6c77f0F0451ABd748FD
• moon token address: 0xc56d17dD519e5eB43a19C9759b5D5372115220BD
• cake token address: 0xd9a2C5C0Fb2F138C2B96582d29A648DF70F80465
• Fish token address: 0x3a3Df212b7AA91Aa0402B9035b098891d276572B
• yield token address: 0x4CEBdBCB286101A17D3eA1f7fe7bbDeD2B2053dd
• Aurora token address: 0x0c8C8Ae8bc3a69dC8482C01CEacfB588bb516B01

Safety tip - use Matic vigil to check all token addresses- given how new Polygon is, not all dex will have every project native token listed and you would have to manually add them via the token address.

Onramps

There are currently SIX Ways to Port your assets to Polygon as of now.

The assets that you can use as a transport is listed too.

• From ERC-20 to Matic Network via Matic Bridge. Quite expensive - you pay both erc20 gas as well as initialisation, but all of the assets supported by Matic can be ported over.https://wallet.matic.network/bridge/

• Xpollinate Bridge (From BSC / xDAI to Polygon). Assets - $DAI, $USDC & $USDT https://www.xpollinate.io/

• AscendEx Exchange - My recommendation: Asset - $Matic & $USDC (New users will have to wait for 24hr before they can withdraw), https://ascendex.com/register?inviteCode=U3YP5VJFY (Full disclosure: this is a referral link) Invitation code: U3YP5VJFY

• BitForex (Soon) Asset - $KRILL https://www.bitforex.com/en/register?inviterId=2776790 (Full disclosure: this is a referral link) Invitation code: 2776790

• QuickSwap with Fiat (using Transak) https://quickswap.exchange/

• ComethSwap with Fiat https://swap.cometh.io/

HOW TO

Swap

The most basic action you can do in DeFi. Swapping from one token to another using exchanges such as quickswap (the biggest and most popular on Polygon at this time), SushiSwap and 1inch is probably the most fun thing you will have, particularly when you have farmed some native tokens and want to trade out to stablecoins (such as USDC for an ascendex offramp to take your profits back)

there are smaller exchanges that are built by DeFi projects, but you might suffer from lack of liquidity (meaning inability to trade) or worse rates if you use exchanges on projects with smaller TVL (e.g.: Polyzap) than the bigger ones mentioned above.

exhibit: Swapping 10 USDt to WOLF on Quickswap 2223pm +8GMT https://quickswap.exchange/#/swap

demystifying swaps :

Route: generally the dex would help to compute the most efficient route to get your asset depending on price and liquidity conditions. in this example above, the USDT will be swapped to USDC first then to WOLF. TLDR: this is 3 steps, 2 steps is the most direct and ideal and would cut down on costs. So sometimes experimenting with different source currencies to maximise efficiency. Don't forget to look at other Dex-es to compare routes too (e.g.: check on 1inch and SushiSwap, not just Quickswap - I am guilty of this, sometimes I get lazy and just Quickswap everything)

Price impact - this is basically how far off the actual price of the asset you are getting. The bigger this number, the more unfavourable the swap is. Basically, if the percentage here is in whole numbers, stop. Check the other exchanges and compare rates if you must, but if this number is around 0.01% you should be fine.

Liquidity provider fee: This is the fee going to all the participants of that liquidity pool. Basically whenever you swap tokens on any of these dexes (distributed exchanges), you are paying a small fee to one of the people that provided the capital in the form of liquidity tokens, which are the pair of tokens that you are swapping. In this case, someone who provided liquidity for USDT-WOLF will be earning a fraction (depending on the amount he contributed) of this fee displayed in the exhibit above.

Slippage tolerance: TLDR - I personally set this to 2.5% most of the time. When trading assets with a reflection tax (such as the huge 19% one on SOLAR) - you have to set slippage to an amount higher than the tax otherwise the swap won't go through. In times of volatility and high demand - your swaps will fail and slowly increasing the slippage will allow you to get past this obstacle.

How to: Get your money into Polygon

Most people new to crypto might not realise there is more than one blockchain, most of the 'common' assets are erc20 tokens that live on the ethereum blockchain. In order to get your assets across, we need to use an onramp as of below.

Tip: Weth is exactly the same as eth - just that eth is 'wrapped' when it is bridged over onto Polygon. The same thing with Wbtc. weth = eth in terms of value 1:1. Sometimes you might think that the same token on erc20 and on Polygon have different values and there is an arbitrage opportunity, but if you attempt to bridge the assets across the Matic bridge (and the time you take to do it) - you will find that it would have cost you the same.

Onramp in action, The cheapest route ONTO Matic

Get XRP (trade your assets to XRP), deposit it into Ascendex wallet this should cost you less than 0.1 XRP

trade XRP to USDT then trade USDT to USDC (you might lose a little on the spreads)

Go to your USDC wallet navigate to the WITHDRAW page, select "Matic network" (this means Polygon)

This means you are using good old erc20 USDC, but withdrawing it as Polygon USDC.

Make sure you are using your wallet (e.g.: MetaMask) MATIC MAINNET address for the withdrawal address.

Take note that Ascendex has an approximate 120 USDC minimum for this!

But instead of paying close to 80 USD worth of gas by using the Matic wallet bridge, this entire process that I just described will cost you something like 2 USD.

To do an off-ramp (get your money out) - simply do these steps in reverse.

Trends

Anonymous Developers

This is not great, but it is so endemic that it is unusual to see a NON-anonymous developer on Polygon than not.

Most Yield farm Dapps on Polygon (given its youth) have been created by anonymous developers. For instance, even the very first yield farm on the Polygon blockchain, Polywhale has developers that name themselves after two characters from the Matrix TV series: The One and Mr Smith. They've only been on one live AMA session so far,

https://youtu.be/TLKriqEu3AI

In any other market, this tendency would be a huge red flag given that the creators of any project could simply cut loose and abandon their work, leaving investors stranded... or rugpulled.

Now obviously having a DOXXED developer would be more favourable as the management team of such a project could be held accountable. A famous case was the controversy that the creator of Polygaj.finance was in fact revealed by netizens to be a 13-year-old genius boy from India, you can read these tweets here:

Decode the following shill text

"1. Fork of goose finance

• Migrator code removed

• Amazing APR

• Progressive burn mechanism"

Degens migrating from one project to another

A lot of opportunistic investors (you might be one) often chase high APRs/APYs from project launches, hoping to cash out rapidly and thus you can see TVLs from projects sometimes dramatically swell and shrink. This is normal. 

A mass exodus of TVL DOES NOT necessarily mean the project has run out of gas or rugged. It could simply be the regular degen migration pattern.

Native token prices shrinking

This happens most of the time. Most of the time the regular pattern for DeFi projects in Polygon is a starting spike, then a valley, and then some stability a week or so later. Just take a look at the CAKE chart in BSC, this is not new. 

There are outliers however, one well-known anomaly was when Polywhale’s krill remained at around the 40 USD range for an entire week. Which could have been the developers artificially trying to maintain the price by adjusting burns and emissions. But this is me speculating.

Typical rookie issues

rookie mistake #1

Running out of Matic

Look, most of the time, you use 0.001 Matic to do 100 transactions. spare yourself the trouble and just get 20-30 Matic that you keep solely for transactions for the rest of your life.

Using up all your Matic - so you enthusiastically spammed the max button on Matic on a stake, forgetting despite the infinitesimally small amount of Matic you need for transactions on Polygon, you still need some. There are a few ways out of it

• spam people on random Polygon Telegram groups begging to get Matic. Some might ask for nudes.

• ask your real friends to send you some Matic from their Matic wallet.

• Use https://matic.supply/ - this is a faucet, a tool to get a small amount of Matic that will spam you with lots of ads. Generally, most faucets are terrible malware-infested (think bad porn site) crap. This one is still pristine set up by some altruist.

rookie mistake #2

Cannot find your tokens that you just harvested from a DeFi project and you want to cash out to a stablecoin. solution: You probably did not add the token into the DEX you are using. e.g. 1inch, SushiSwap, Quickswap (I swear by Quickswap) - simply click on token and paste token

rookie mistake #3

Buying too much of a native token

Native tokens are volatile and unless you have thoroughly studied the project for your long-term investment, DO NOT buy too much (FOMO into) of a native token (if at all) especially if the APR is sexy at the start of a new DeFi project. In fact, the dominant strategy employed by hardcore 'degen' farmers is to put all their funds into non-native token pairs and single asset staking, farm out the native token and sell it immediately to a stablecoin such as USDC. Case study: I saw friends get absolutely rekt when they invested into Polylion's native coin "lion" only to have it drop to cents 6 hours later.

rookie mistake #4

help my transaction (harvest, stake, unstake etc) is not going through

Don't panick

manually increase the gas limit in MetaMask.

if it says "Error in smart contract" - contact the projects Telegram group, usually it's a bug and your tokens won't be lost either way.

How to assess a new Polygon DeFi project

Things to expect: Anonymous team, hype before product (We went through this already), etc

Audits

Is this project audited? Just because a project posts an audit, does not necessarily mean it's rug-proof (Polyfox technically had an audit but it still rugged). Certik, Hacken, Techrate are usually go-to firms for audits. Remember that an audit usually can cover the smart contract validity, but sometimes stop the developers from playing a game with their native token emissions.

there's also timelocks for code edits. Something could be audited then a malicious actor could change the code later. usually, for new projects, expect a 24-hour timelock on the code post-audit. That is usually a good sign.

I personally use rug doctor to check for flagged projects:

https://docs.google.com/spreadsheets/d/1POnoeD6A0_Z8IBonxp5g_gkzU7QWA3ypQX6KT8uNbRI/edit#gid=620270946

(This is a community project)

TVL - total value locked

This is the amount of funds committed from all investors into that project. Take note that some projects have specific sections of their farms not added to their master TVL, making it look a little bit smaller than it should be (Polywhale had this issue with their 'reef' section) Generally the higher amount of TVL means that more funds (and presumably investors) trust the project

A small TVL might mean that a project is pre-hype, which could be a good find. Or alternatively, it could be an abandoned project, such as Polyfox where the developers Rugpulled the investors by allegedly pocketing the funds that were supposedly heading towards a burning wallet. I have to say allegedly, as this is from Telegram feedback and no empirical evidence has surfaced, but Polyfox is indeed a bit of a graveyard.

A very high TVL in a very short time however might make a very attractive rugpull target. Just imagine someone seeing so much money in that short a period.

Harvest lockups

two examples of projects using harvest lockups - Polylion and Polyzap. Harvest lockups can be rather irritating that you cannot harvest rewards for a fixed period of time (e.g: 2 hours or 24 hours) meaning that compounding non-stop, one of the advantages of using Polygon in the first place because it's practically free to do so... is denied. Usually, developers implement harvest lockups to prevent sell pressure from devaluing their native token. To be honest, imho, it does not really work. Degens will dump.

Launchpad

Launchpads are essentially token offerings that allow tangible products to be sold via an auction-style interface. This gives real-world utility in the form of acceleration and/or exchange of value.

https://miso.sushi.com/

While this is not a Polygon example of a launchpad (as none exist at the time of this article's writing) - SushiSwap could easily make this available on Polygon given that their presence in the blockchain has a very huge footprint. The closest project to launching a native polygon launchpad is Polywhale. 

Day to day

What you can do each day in DeFi farming

FARM

Of course, harvesting is a manual process. Clicking harvest on each of your farms is a fun process. A little dopamine hit.

If you have already 1x-ed your investment, then essentially, this has become passive income, no matter how small. Even if you are getting the equivalent of 0.02 USD worth of a native token after you have broken even, hey, you are outdoing any traditional investment

Most DeFi projects have a "harvest all" function on their home page (with the exception of Polyzap irritatingly. ) and some DeFi projects have a 'compound' function. Try not to cave into compounding ALL your funds if you have not broken even (i.e.: cashed out to the point that you have earned your entire principal back)

My method is to bookmark all the DeFi farms together into a single folder and then 'open all' in a chrome tab. Then farm them all one by one, left to right. Closing each tab after each confirmation so I check them off.

Tip - don't keep fractions. If you are farming with the intent to cash out each day, you would have some thing like .234 USDC at the end of your swaps to stablecoins. I recommend swapping the 'loose change' into tokens with large denominations e.g.: an autostaking token like Polymoon or moonwolf (WOLF) would be a great idea - since it passively compounds anyway.

Compounding

There is, of course, the opportunity to recompound your funds back into your pools, farms, and vaults, but of course, how you utilise compounding is up to your own strategy.

If you have staked into autocompounding instruments, like adamant, reef in Polywhale or vaults in Polycat - I recommend not to break them up during your daily (or more frequent) harvest. Leave them be, let them do its job as the APYs on autocompounding are high, but given it's an exponential progression, most of the gains are towards the end of a 1 year period in the projection. You can choose to stake only HALF your investments into autocompounding instruments and then the other half to manually harvest to cash out.

I personally recompound 25% of my manual harvests, on top of leaving half my assets in autocompounding.

Checking your holdings

Several Polygon projects are now supported by mainstream tracking apps - so you can get an overview of your projects

Tracker

https://0xtracker.app/

add "?=address=[your Matic wallet address] to get

Beefy, Blackswap, iron finance and Polycat are supported

Doesn't tell you how much IL/gains you have, but good to have an overview of your networth inside one DeFi project accurately.

DeBank

https://DeBank.com

Polywhale is supported, but currently only the tanks section

Zapper

https://zapper.fi

Supports Aave

Apy.vision

https://Apy.vision

Supports Quickswap, SushiSwap, and Cometh

Even scans your smart contracts to figure out what price you entered some LP pairs. VERY useful.

Exhibit: Snapshot of two of my LP pairs inside APY.vision - it shows you what price you entered, what price the assets are currently worth, and the impermanence loss (or gain) - just remember folks, it does not take into accounts the rewards for incentivised pools/pairs. So you might have made a profit on the rewards, but lost some IL.

Exiting

Of course, there is exiting. Do not listen to others about when to unstake your funds. Your money, your call. Remember there are a few things to consider.

• Have you paid a deposit fee on the pool/pair that you staked in? If you haven't earned back enough in harvested tokens, you could be out 4% (a common deposit fee quantum)

• Are you jumping from one pool to another? Might it make sense to unstake assets from 0 fee pools instead? Could you use fresh funds or harvested funds first?

• Did you make a capital gain on the principal? This is advisable if it's probably 3 years or more worth of gains.

• Are you breaking up a liquidity pair before you calculated your impermanence loss? You could turn your 'impermanent' loss into a permanent loss. Of course, this is something to do if you think the token is never going to recover. e.g.: you bought krill at the ATH of 230 USD and then paired it up with USDC. And then now you urgently need your funds or want to break the LP pair up before you lose even more money.

Afterword

I hope this article was useful for you in your first DeFi foray into Polygon.

If you would like me to continue updating this article including a comprehensive chart of DeFi projects, do send me some love in the form of Matic tokens to my wallet so I can buy a meal: 

0xBb77eDa00654bb78aF2E1B9c40c14Df8Fc1e9bE9

*This is a Polygon/Matic address! Do not send any erc20 or other blockchain assets. I’m not responsible for your irrevocable loss of coins due to mistakes