Level 3 Offers Amazing Opportunity Even After APR Drops
Last week, I walked Dr. Weiss through the steps for our first Level 3 opportunity, going for massive yields on Trisolaris.io.
If you haven’t yet acted on this opportunity, you now have two ways to learn:
You can watch our Zoom recording.
Or you can follow our just-released step-by-step guide.
Needless to say, as with any strategy, high yields can come with extra risks.
And in this Level 3 opportunity, there are two:
- The yields themselves can fluctuate quite a bit.
- 50% of our deposit is in a variable-price crypto, which can be volatile.
Still, since the yields are SO high, I feel they more than outweigh the risks. Plus, let’s not forget that …
- The variable-price cryptos can not only fall, but they can also go up, creating very interesting profit opportunities.
- The other 50% of our deposit is in a stablecoin, a digital asset designed to barely fluctuate in price.
Still, having a plan to manage the risks that are there is essential. That’s why today, I’ll give you a heads-up on how I plan to do just that.
First, let’s take a look at how our Level 3 position has changed in the past week.
The pool we’re in is WNEAR-UST. (You could also call it UST-WNEAR. Both are correct.)
It’s currently yielding roughly 97% annually.
That’s down from last week ... but obviously still extremely attractive.
(In the image below, second from bottom in left column.)
Part of managing our opportunities is determining if the reward is worth the risk. And, to me, a slip from a triple-digit yield to 97% is still well worth it.
How far would the yield have to slip for me to look for greener pastures elsewhere?
It all depends on the relative risk exposure. For example, consider this hypothetical scenario …
The yield on this deposit drops to “only” 50%.
Meanwhile, a similar deposit, using the USD Coin (USDC) stablecoin — in the USDC-NEAR pool — offers 90% or more.
Assuming other market conditions remain similar, in that scenario, I may very well send you an alert to switch, and the reason should be obvious:
Significantly better yields with a similar risk profile.
What’s the cost of switching? Beyond a minor time investment, none! Trisolaris is a “gas-free” environment. That means we don’t pay fees for any transaction on the network.
We can swap pools as often as we’d like to go for the best yields with no extra costs or penalties.
So that covers the first type of risk — fluctuating yields. But what about the second, the 50% of our deposit that’s in a variable-price coin?
Here, I have to take note of the value of that asset. Fortunately, over the past week, that volatility worked in our favor. NEAR rose about 30%.
Could it also swing the other way very soon? Sure. Then, the question will be: How much of a decline is likely to be covered by the higher yield?
If I feel the yield can easily cover the typical loss, I may stick it out.
But that tactic has its limits, of course.
My motto: It’s a heck of a lot better to get a 50% APR on an asset that’s holding at $10 than getting 100% APR on an asset that falls from that level to $1.
So, if I see that kind of scenario unfolding, it will be an even more important reason to send you an alert.
Suppose the crypto market as a whole is in a major correction?
No worries! Then we can stick strictly with stablecoins and enjoy the still-great yields they provide in our Starter Level and Level 1 opportunities.
Overall, my mindset is wired to always think how to best make these opportunities work for you and for Dr. Weiss.
To that end, whenever I target Level 3 opportunities, I always compare the risk/reward to the yield we’re earning strictly with stablecoins (Level 1).
And those yields are definitely not bad at all.
We’re still earning about 19.5% APY on the Anchor protocol.
That’s more than 60 times what you can make on the average 5-year jumbo CD in the U.S.!
And that’s where we recommend allocating the bulk of the funds you’re using for crypto yield hunting (65% to be exact).
If you’re not yet on board the 19.5% yield opportunity, you can still jump in now.
See you next week.
And, as always, be sure to let your money work for you.