First Mover: Day in the Life of a Yield Farmer Means Part-Time Gig, Full-Time Risk

Yield farming steals crypto traders' obsession as bitcoin's volatility falls to 180-day low; Coinbase employees take severance.

AccessTimeIconOct 5, 2020 at 12:47 p.m. UTC
Updated Sep 14, 2021 at 10:04 a.m. UTC

One is a Grammy Award-winning musician with lots of spare time. Another is a software engineer with nowhere to go during the pandemic. There’s also an editor for a data site and a fund manager who invests in digital assets. 

What these people have in common is an obscure side gig known as “yield farming,” a type of cryptocurrency trading and investing that didn’t really even exist until 2020. Yield farming is producing fixed income-like returns that can, at least for brief stretches, provide annualized interest rates equivalent to percentages investors cannot find anywhere else. 

As documented in First Mover over the past few months, the yield farming boom, itself a subsector within the fast-evolving realm of decentralized finance, or DeFi, started in June when the projects Compound and Aave launched. They were soon followed by Kyber, Balancer and Yearn.Finance. More creative names like Spaghetti, Tendies and SushiSwap followed. 

CoinDesk's Daniel Cawrey spoke to four yield farmers to get their stories. Here's a link to his highly recommended piece, along with a video interview he conducted with André Allen Anjos, also known as RAC, who finds time for yield farming in his spare time, when he's not producing and recording music. 

Video interview with Andre Allen Anjos, also known as RAC.
Video interview with Andre Allen Anjos, also known as RAC.

Bitcoin Watch

Bitcoin daily price chart.
Bitcoin daily price chart.

Bitcoin's low volatility consolidation continues as the dust settles on the BitMEX controversy. 

On Thursday, the U.S. authorities charged the crypto derivatives exchange for facilitating illegal transactions. 

Initially, bitcoin fell from $10,900 to $10,450 but recovered to $10,500 on the following day. The cryptocurrency held ground even though the regulator probe triggered massive outflow of bitcoins from BitMEX and the drop in the futures open interest, a sign of panic among traders. 

However, while the cryptocurrency has jumped to $10,700 over the weekend, it remains trapped in a contracting triangle, as seen on the daily chart. 

A breakout would confirm an end of the pullback from the August high of $12,476 and a reversal higher. That would expose resistance lined up at $11,183 (Sept. 19 high). 

Alternatively, a range breakdown may invite a stronger chart driven selling pressure. 

- Omkar Godbole

Token Watch

Bitcoin (BTC): 180-day volatility falls to lowest mark since November 2018 as market mostly unfazed by President Donald Trump's positive coronavirus test and U.S. charges against BitMEX cryptocurrency exchange. 

Ripple (XRP): Job listing indicates XRP-affiliated blockchain sponsor is preparing to launch a next-generation trading platform

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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.