Simple Polygon Farming Guide
Everyone wants to be able to earn a passive yield on their investments, earning money in your sleep is a very nice feeling to have.
This tutorial will show you a very simple method to earn up to 20% APR off of common cryptocurrencies. (22% if compounded)
Currencies this method works with: ETH, MATIC, wBTC, USDC, DAI, AAVE.
What you need:
1) An EVM-compatible hot wallet. I recommend metamask which can be downloaded here: (https://metamask.io/)
*Make sure to write your private key/seed phrase on a sheet of paper if you’re new to the decentralized world. Anyone with your keys can break into your house. The keys to your money should never appear on the internet.
2) The Polygon (MATIC) network. To add the network to metamask, click the network list, scroll to the bottom, and click “Custom Network” or “Custom RPC”
If you’re lazy, you can go to polygonscan, scroll to the bottom, and click “add polygon network” to instantly add it.
Click “save” and you added Polygon network! You can click the network list and switch between networks anytime.
3) MATIC to use as gas. Using the network costs gas, so you’re gonna need some. You can get free MATIC by using the polygon faucet (https://matic.supply/). But it is recommended to get some from your exchange.
If you have everything in the checklist, you’re ready to start!
Steps to Success:
If you already have USDC or DAI, you can skip the first and second steps.
1) Use AAVE to get USDC or DAI from your currency without having to sell it.
First, deposit collateral to (https://aave.com).
Make sure you select polygon AAVE!
Deposited cryptocurrencies earn passive interest, for example, deposited MATIC earns 3.6% APR at the time of writing. (If you deposit $1,000 of MATIC, you’ll get 10 cents a day)
But 3.6% APR obviously is nothing compared to the end result of the farm, its just a bonus!
2) Borrow USDC from polygon AAVE using your collateral.
Click “Borrow” on AAVE and borrow USDC.
Borrow enough USDC to keep your Health Factor above 1.5
**VERY IMPORTANT INFO BELOW PLS READ**
Health Factor is the safety of your AAVE loan, if it reaches 1, you take an instant 5–15% loss as a penalty for not keeping it high enough. Your health factor can decrease if ETH or BTC falls in price. 1.5 is a very safe health factor (Crypto would have to crash in order for you to be in danger), but we have seen bitcoin fall 50% in a day during the china FUD.
3) Exchange USDC for DAI or vise versa so you have equal amounts of both.
Curve (https://polygon.curve.fi/) is the best place to trade stablecoins, with their unbeatable 0.03% fee. (Trading $1,000 means you only have to pay a $0.30 fee)
Sometimes, you can even get a bonus when the prices are on your side!
Once you have equal amounts of USDC and DAI, move on to the next step.
4) Supply the DAI/USDC liquidity pool on Quickswap.
Now that our setup is done, we can finally start farming.
Go to Quickswap (https://quickswap.exchange/#/add/) and add DAI and USDC to the pool.
If the price is slightly off, that’s completely ok, as the pool adjusts how much USDC/DAI you have depending on what the exchange rate is. (And since both are pegged to $1, it doesn’t matter if you have more of one than the other, as the pool will always have equal amounts of both)
5) Deposit your LP tokens into the DAI/USDC farm
You already earn fees by supplying liquidity to the pool, but you can also earn a bonus incentive reward from quickswap in the farms (Farms -> LP mining on quickswap)
Simply search DAI in the search bar and find the DAI/USDC farm
Deposit your tokens and you’re now earning passive income from AAVE (If you did the first step), Quickswap LP, and Quickswap farms!
This very simple and safe farming setup will easily earn you a couple cents/dollars a day depending on how much you put in.
To withdraw, simply follow the steps in reverse (Like if it says to deposit, withdraw instead)
This is a beginner’s setup, if you could like to earn more with a little more complex setup you can check out these guides:
Thank you for reading!