Analysis of 7 Real Yield Protocols in the DeFi Field

In the field of Decentralized Finance, many projects attract liquidity by offering large token rewards. Although this practice can lead to an increase in TVL in the short term, it also has some problems:

1. If the token is over-issued and cannot create enough value, the system will face the risk of collapse.

2. User loyalty is low, and when incentives decrease, they will flow to other new projects.

If high emissions coexist with low income, token prices may decline. DeFi users are gradually realizing that what truly holds value are protocols that can generate free cash flow.

Features of the Real Yield Protocol:

1. The product has a high market fit and does not rely on market conditions or token incentives.

2. Generate on-chain income through products.

3. Income exceeds operating costs and token emissions.

4. Pay with stable currencies ( such as ETH and stablecoins ).

The following are 7 DeFi protocols that meet the above characteristics:

1. BTRFLY (Redacted Cartel)

BTRFLY has launched version V2, transitioning from a dilution model to a real yield model. Users can lock BTRFLY through rlBTRFLY to earn income distributed in ETH. The earnings come from its capital and product ecosystem.

2. Gains Network (Polygon)

Decentralized leverage trading platform, providing up to 150x leverage for cryptocurrencies, stocks, and forex. Currently offering DAI Vault and GNS-Dai LP, with single-coin GNS staking coming soon.

3. Umami (Arbitrum)

• mUMAMI Staking: Earn stable WETH passive income from protocol/treasury revenue, with an annual interest rate of approximately 5%.
• GLP/TCR USDC Pool: APR is approximately 20%. Fees are collected through GMX and market fluctuations are hedged through TracerDao.

4. Kujira (Cosmos L1)

Provides a variety of products:

• Orca: Purchase assets at a discounted price through liquidation
• Fin: Decentralized Order Book Trading
• Blue: Core of the ecosystem
• USK: Decentralized stablecoin

Staking KUJI can earn a portion of the protocol income, with the current annual interest rate at 0.49%. As adoption increases, the APR is expected to rise.

5. Trader Joe (Avalanche)

The top-ranked DEX on Avalanche. Stake JOE to sJOE to earn USDC rewards. A fee of 0.05% is charged for each swap, which is distributed to the sJOE pool after being converted to stablecoins.

6. Synthetix (Ethereum/Optimism)

Allows the creation of synthetic assets to trade real-world assets on-chain. Staking SNX can yield:

1. sUSD earnings from traders
2. SNX's inflation rewards

7. GMX (Arbitrum/Avax)

Decentralized exchange, offering up to 30x leverage.

• Extract 30% fees from exchanges and leveraged trading
• Convert fees to ETH/AVAX and distribute to staked GMX token holders.

GMX is the number one dApp on Arbitrum, with usage continuously increasing.

Tools for Research Projects

• TokenTerminal/CryptoFees: Find income sources
• Dune Analytics: provides protocol dashboard
• Messari: Token Supply Information
• protocol internal dashboard

Questions to consider when evaluating a project:

• Sources of Income
• protocol revenue
• Native token supply and emission
• Yield Payment Token
• Network Attraction

Risk Warning

1. Some protocols may face regulatory risks.
2. Many projects are based on financial engineering, such as contracts and options, and carry corresponding risks.