What Interest Me This Week

Active short-term DeFi yield-farming

I'm not quite a degen yet but a sizeable amount of my asset are put to work in varieties of staking and liquidity pools. I've come to regret some of those but largely it's a good move to put idle capital to work.

But it's very much a set-&-forget proposition. I wonder if it's worthwhile to farm yields more actively, enter and exit with shorter time frame.

It makes sense as a risk-mitigation strategy. The less time exposed to a farm/pool, the less chance of impermanent loss, less chance of being rug-pulled.

The decision to exit and enter another pool must rely on good performance data. The bookkeeping cost to that may turn out to be non-trivial. My current proprietary bookkeeping system does not account for liquidity pools; it certainly has no sense of how much a liquidity pool token is worth.

Most staking pools don't provide performance tracking. Without some sense of performance it's not clear one should continue or exit a pool. Building this myself isn't easy especially if API source is unknown.

All that said, what does success look like here? Even if the end of this results in a similar profit/loss as set-&-forget, would it be worth the effort simply as a risk-minimization move?

That depends on how much risk was successfully taken away. Which sucks because I'm of the camp that don't believe in quantifiable risks.