How to earn DeFi yield with the Avalanche Network

The low-fee Avalanche network and the easy-to-use Coinbase Wallet are a perfect way to start experimenting with DeFi protocols and get a sense of how they work

Like Ethereum, Avalanche is a blockchain platform that can run a wide range of decentralized applications, also known as dapps. Unlike Ethereum, which has often seen high fees as its popularity has risen, Avalanche can be a lot cheaper — with fees that generally are in the pennies or less. This makes it an ideal sandbox for exploring the basic concepts around decentralized finance, better known as DeFi. DeFi is an umbrella term for peer-to-peer financial services on blockchains — and Avalanche has grown to be a major hub of DeFi activity. As of March 2022, it ranked fourth in terms of total value locked (TVL) among all blockchains (you can check the current ranking here). Avalanche has grown into a highly interoperable blockchain in the DeFi space, partially thanks to its address format that mirrors Ethereum’s. Rapid settlement times and minimal gas fees also have boosted Avalanche’s presence in DeFi. 

(Always remember that DeFi is an emerging technology, and its often high rewards come with a matching set of risks — so make sure to experiment using funds that you can afford to lose.)

Getting started with Avalanche via Coinbase Wallet

Accessing the Avalanche network on Coinbase Wallet is super easy. In fact, it only takes a few taps. To get started, download and install Coinbase Wallet and open the app on your iOS or Android device. Once you’ve opened the app, follow these simple steps:

Fund Coinbase Wallet with AVAX

1. Connect Coinbase Wallet to your existing account: Click the Coinbase Wallet extension followed by the + icon. Click Connect my Coinbase account, followed by your login credentials, and Authorize. This will let you easily send crypto you buy on Coinbase to your Coinbase Wallet.

2. Initiate the Purchase: Click the Coinbase Wallet extension followed by the + icon. Select AVAX and the amount you would like to purchase. Important to remember: you’ll need to give yourself enough AVAX to cover both the actual transaction and gas fees. 

3. Confirm the Purchase: Click Preview Buy, followed by Confirm, and Close. Your AVAX will appear in your Coinbase Wallet once the purchase and transfer from your Coinbase account is complete.

Transfer AVAX to Coinbase Wallet

1. Initiate the Transaction: Tap the Buy or transfer button. Tap the Buy or Transfer from Coinbase button.

2. Purchase the AVAX: Tap AVAX Wallet and enter the amount of AVAX you would like to purchase. Tap Continue and then tap Buy.

3. Initiate the Transfer: Tap the Buy or transfer button. Tap the Buy or Transfer from Coinbase button.

4. Transferring AVAX to Coinbase Wallet: Tap AVAX Wallet and enter the amount of AVAX you would like to transfer. Tap Continue and then tap Confirm.

Switch to the Avalanche network 

Coinbase Wallet is compatible with multiple blockchains, so if you want to use apps on  Avalanche, you need to switch your wallet to the right network. Switching to Avalanche takes two simple steps. After you switch networks, you can use all of the dapps in the Avalanche ecosystem and take advantage of the blockchain’s fast transactions and low fees.

1. Open Settings: In the Coinbase Wallet app, Tap the Settings () icon.

2. Switch to Avalanche: Tap Default Network and select Avalanche C-Chain.

Ok, all set up! Now what can I do using Avalanche?

Avalanche has a thriving ecosystem of DeFi dapps you can use. All the DeFi action occurs on Avalanche’s C-Chain; and fortunately your Coinbase Wallet’s AVAX C-Chain address is ready to support your Avalanche DeFi endeavors. Even better, popular dapps such as Platypus, Trader Joe, and SushiSwap all feature Coinbase Wallet integrations. You can trade thousands of cryptocurrencies at a low cost and provide liquidity to pools in exchange for a yield, among many other services.

(Coinbase isn’t affiliated with any of these DeFi services. Any transactions you engage in, including the examples below, are at your own risk.)

Swap tokens on Trader Joe

Trader Joe is a popular decentralized exchange (or DEX) on the Avalanche network. It allows you to make fast, easy peer-to-peer trades of thousands of cryptocurrencies. 

1. Open the dapp browser: In the Coinbase Wallet app, tap the DApp browser icon.

2. Navigate to Trader Joe: Enter ‘traderjoexyz.com/trade’ in your URL.

3. Connect Coinbase Wallet: Tap Connect to a wallet, select Coinbase Wallet, and then Connect. 

4. Swap Tokens: Convert your AVAX to another token, such as JOE, by selecting the desired token and entering the amount of AVAX to swap. Tap Swap and then Confirm Swap.

5. Confirm the Swap: Tap Pay to confirm the transaction.

6. View your AVAX tokens: The AVAX C-Chain assets will appear in your Coinbase Wallet once the transaction has settled. 

Provide liquidity to Trader Joe pools

DEXs like Trader Joe establish the prices of various cryptocurrencies against each algorithmically and use “liquidity pools” — in which investors lock funds in exchange for interest-like rewards — to facilitate trades. Here’s how you can put some of your crypto into a Trader Joe liquidity pool and earn rewards. 

1. Open the dapp browser: In the Coinbase Wallet app, tap the DApp browser icon.

2. Navigate to Trader Joe: Enter ‘traderjoe.xyz/pool’ in your URL.

3. Navigate to Pool (add): Tap the Pool you would like to contribute liquidity to and navigate to the Add tab.

4. Initiate Pool Deposit: Enter the amount of each token you would like to deposit. You can use the ‘Max’ button. Note that the value of each token amount paired must be equal. If it is your first time depositing this token to a pool, tap Approve [token ticker] followed by Confirm.

5. Deposit to Pool: Tap Supply, Confirm Supply, followed by Pay.

6. View your position within the Pool: Liquidity provided will be displayed once the transaction is complete.

7. Initiate Withdrawal from Pool: Tap the Remove tab within the Pool. Enter the amount to remove, tap Approve and then Sign. 

8. Confirm Withdrawal from Pool: Tap Remove, Confirm, and Confirm once more. The tokens will appear in your Coinbase Wallet once the transaction is complete. 

Swap tokens on SushiSwap

Sushiswap is one of the most popular decentralized exchanges — it allows easy peer-to-peer trades of thousands of cryptocurrencies and is available on multiple blockchain networks, including Avalanche. 

1. Open the dapp browser: In the Coinbase Wallet app, tap the DApp browser icon.

2. Navigate to SushiSwap: Enter ‘app.sushi.com’ in your URL.

3. Connect Coinbase Wallet: Tap Connect to a wallet, select Coinbase Wallet, and then Connect. 

4. Swap Tokens: Convert your AVAX to another token by selecting the desired token and entering the amount of AVAX to swap. Tap Swap and then Confirm Swap.

5. Confirm the Swap: Tap Pay to confirm the transaction.

6. View your AVAX tokens: The AVAX C-Chain assets will appear in your Coinbase Wallet once the transaction has settled. 

Provide liquidity on SushiSwap

Similar to Trader Joe, DEXs like SushiSwap establish the prices of various cryptocurrencies against each algorithmically and use “liquidity pools” — in which investors lock funds in exchange for interest-like rewards — to facilitate trades. Here’s how you can put some of your crypto into a SushiSwap liquidity pool and earn rewards. 

1. Open the dapp browser: In the Coinbase Wallet app, tap the DApp browser icon.

2. Navigate to SushiSwap: Enter ‘app.sushi.com’ in your URL.

3. Navigate to Pool (add): Tap the Menu, Pool, then Add. Select the Pool you would like to contribute liquidity to.

4. Add to Pool: Enter the amount of each token you would like to deposit. Tap Confirm Adding Liquidity, Confirm Supply, followed by Pay.

5. View your position within the Pool: Liquidity provided will be displayed once the transaction is complete.

6. Navigate to Pool (remove): Tap the Menu, Pool, then Browse. Select the Pool you would like to remove liquidity from and tap Remove.

7. Initiate Removal: Enter the percentage you would like to remove, tap Approve, followed by Sign.

8. Confirm Removal: Tap Confirm Withdrawal and then Confirm three times in a row. Your liquidity will be removed from the Pool.

Provide liquidity to Platypus’ Unilateral Stablecoin Pools

Platypus is a DeFi app on the Avalanche network that supports stablecoin swaps with an efficient conversion rate and low transaction cost — this can offer a (relatively!) low risk way to earn yield that typically is much higher than traditional finance can offer. Platypus is a single-sided AMM with flexible, open liquidity pools. Liquidity providers can contribute unilateral liquidity, meaning a deposit of a single asset rather than an LP token, in exchange for a yield. 

1. Open the dapp browser: In the Coinbase Wallet app, tap the DApp browser icon.

2. Navigate to Platypus Pools: Enter ‘app.platypus.finance/pool’’ in your URL.

3. Connect Coinbase Wallet: Tap Connect Wallet, select Coinbase Wallet, and then Connect.

4. Navigate to Pool: Tap the Pool you would like to contribute liquidity towards. The reward base APR is displayed on this screen:

5. Deposit to Pool: Tap Deposit under the token you would like to provide. Enter the amount of the token you would like to deposit and tap Deposit again, followed by Confirm.

6. Stake Deposit: Tap Stake and then Stake All. Tap Approve followed by Confirm.Tap Stake All followed by Confirm.

7. View Accrued Rewards: Your Pools earning is displayed at the top of the Pools page.

8. Unstake Deposit: To begin withdrawing your liquidity, Tap Stake, followed by Unstake All, then Confirm.

9. Withdraw Deposit: Tap Withdraw, enter the amount to withdraw, Approve, and finally Confirm. Your rewards are automatically claimed once your liquidity is withdrawn.