Yield Farming with Balancer on Polygon
How to invest in Balancer Weighted Pools with APY > 100%
I just found out that Balancer has launched pools for Polygon network. Polygon with its token Matic has been a big deal for me personally, since my first investment on it since August 2020 and keep compunding!
So what is Balancer? Balancer is an Automated Market Maker (AMM) that allows users to create programmable liquidity. AMMs are a type of decentralized exchange where instead of using a traditional order book that pairs buy and sell orders, a smart contract acts as a partner in every trade.
Unlike conventional liquidity pools which provide 1/1 token pools, Balancer provides weighted pools which can up to 8 tokens. As a simplicity, just think it’s like a hedge fund managing your portfolio assets. It manages assets by rapidly rebalancing positions and earning trading fees over time.
Investment Pools
Before we start, make sure you have Polygon network on your Metamask or Trust wallet.
Roll into the Balancer web for https://polygon.balancer.fi/#/ and then scroll down, you can see the list of investment there. You can see tokens that are available in your wallet as in green dots along with the Pool Value, Volume and Estimated APY.
Providing Liquidity
In providing liquidity to weighted pools, you don’t need to have all the tokens. It can be one token only. I will show how to provide this pool:
- Pick any pools you’re desired to go. In this case, I would pick $WMATIC/$USDC/$WETH/$BAL. Because I have some $WMATIC and $WETH in my Metamask wallet. And all of these tokens already in Polygon version.
2. Provide the quantity of tokens you want to provide in this pool. And approve all the process.
3. Once it was approved, you can see how much you invest in this pool. And done, as simple as it is. You can check and validate all the transaction in PolygonScan.
4. Liquidity mining incentives for Balancer are sent weekly to your wallet using the Disperse app on Wednesdays. You will receive $BAL tokens as a reward, on top of any other partner rewards like $MATIC or $QI tokens.
For the second pool, I would like to invest in $SUSHI/$WMATIC/$USDC/$QI/$WETH pools. Because, I still have $SUSHI and the rest of $WMATIC in my wallet and secondly the APY is more than 150% at the time of writing !
