Your Ultimate Yield Farming Guide on Sonic (Part 1)
1. Shadow DEX: Delta-Neutral S/stS Liquidity
@ShadowOnSonic is a decentralized exchange providing liquidity pools with aggressive fee structures and high APR through concentrated liquidity.
Strategy: Provide liquidity to the S/stS pool (S is Sonic’s native token, stS is its staked version) in an aggressive price range, hedge spot S exposure with a short position on Hyperliquid, and stack Sonic Activity Points.
Estimated APR: ~116% (from liquidity provision) + Sonic points (16x multiplier for activity).
Steps:
Acquire Sonic (S) and convert some into staked S (stS) via Beethoven X.
Provide liquidity to the S/stS pool on Shadow DEX within a tight price range (±5% around market price).
Hedge price exposure by opening a 1x short position on S via Hyperliquid, neutralizing volatility.
Accumulate Sonic Activity Points (16x multiplier due to asset deployment).
Risks: Impermanent loss mitigated by hedging, smart contract vulnerabilities, hedging slippage.
2. Rings Protocol: Yield-Bearing Stablecoins
@Rings_Protocol issues scUSD, a yield-bearing stablecoin backed by collateral (USDC, ETH derivatives), generating yields from cross-chain deployments.
Strategy: Mint scUSD (Sonic-native stablecoin) by depositing stablecoins or ETH-based tokens, earning yield from Ethereum vaults via Veda, and redeploying scUSD for additional DeFi yields.
Estimated APR: ~10-20% (base yield from @veda_labs vaults, plus potential extra from scUSD deployment).
Steps:
Bridge or obtain USDC/WETH to Sonic.
Deposit collateral into Rings Protocol to mint scUSD (collateral earns yield via Ethereum-based Veda Labs vaults).
Stake minted scUSD on Sonic or provide it as liquidity to DEX pools.
Regularly collect yield distributed weekly by Rings.
Earn Sonic Points passively and actively (6x multiplier).
3. Vicuna Finance: Leveraged Concentrated Liquidity
@VicunaFinance provides leverage for concentrated liquidity provision, amplifying yields in stable pairs.
Strategy: Use borrowed funds to provide leveraged liquidity to a concentrated pool (e.g., USDC/scUSD), amplifying trading fee yields.
Estimated APR: ~40-60% (15% base APR × 3-4x leverage, before borrowing costs).
Steps:
Deposit USDC as collateral on Vicuna.
Leverage collateral (3-4x) to borrow additional stablecoins (scUSD or USDC).
Provide leveraged liquidity into a concentrated stablecoin pool on Shadow or Beethoven X.
Maintain collateral health and regularly harvest rewards.
Earn Sonic Points for active liquidity.
Risks: Leveraged liquidation risk, interest rate fluctuations, impermanent loss in volatile markets.
4. Spectra Finance: Fixed-Rate Yield Vaults
@spectra_finance offers predictable, fixed-rate returns on stablecoin deposits through yield vaults, ideal for stable, lower-risk returns.
Strategy: Lock stablecoins for a fixed-rate yield, hedge against yield volatility, and earn additional LP rewards.
Estimated APR: ~12-18% (fixed rate + liquidity provision incentives).
Steps:
Deposit stablecoins (USDC/scUSD) into Spectra's fixed-rate vaults, locking for durations (30–90 days).
Optionally, boost earnings by providing liquidity to Spectra’s interest rate trading pools.
Collect predictable yields plus Sonic Points for active participation.
Risks: Lower flexibility due to lock-ups, potential opportunity cost during high market volatility.
5. Vertex Protocol: Perpetuals Yield Farming
@vertex_protocol combines spot markets, perpetual trading, and lending markets, allowing users to earn interest on stablecoin deposits and yield from perpetual futures.
Strategy: Deposit stablecoins into Vertex’s money market to earn lending yield, then use borrowed funds to farm perpetuals trading rewards.
Estimated APR: ~15-25% (10% lending + 5-15% trading incentives).
Strategy Steps:
Deposit USDC/scUSD into Vertex lending pool (base lending yield ~10%).
Borrow S or other tokens to trade perpetual futures on Vertex, leveraging funding rate arbitrage and additional rewards.
Monitor positions closely for profitable exits and regular collateral management.
Gain additional Sonic Points from active market participation.
Risks: Perpetual trading volatility, liquidation risk, fluctuations in funding rates.
Read more about the Sonic Ecosystem and its Airdrop incentives here:
