Checking out new Kagla and Muuu stablecoin yields on Astar Network: 1800% yield on a stablecoin pool!?!

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I'm checking Kagla Finance out right now. It's a new stable swap protocol on Astar Network, which is also pretty new. Astar is Polkadot based, and is a multi-chain platform project that launched its mainnet in January 2022, it has very very low gas fees (Astar token is worth 0.07 $ right now, and gas fees today were around 0.004 Astar) and recently many dapps are launching or about to be launched on it, with quite a bit of investor support. It is also supposed to be quite fast, but today oddly enough some transactions took me several minutes.

Here you can see the current pools on it, with the stable coins with the highest market caps right now.

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When I first saw this a couple of weeks ago, I asked myself why they weren't including UST too, but for whatever reason, that's not an issue anymore. As you can see the incentives are crazy high for stablecoin pools. They pay out the rewards in their KGL token, which they estimate is worth 0.01 USD right now, and can not actually be sold as of now, but you can claim and accumulate it. My guess is this is to protect themselves in the early stages from whales who might just dump everything as soon as possible, especially in a bear market. But honestly it's a bit unclear to me how they calculated the tokens worth and whether it is reliable at all right now.

The 3KGL token is what you get in exchange for putting DAI+USDC+USDT in the 3Pool, and it in turn can be paired with BUSD in another exchange pool. The total liquidity in this 3pool is over 3 Million. The 3KGL token can at anytime be exchanged to get the DAI+USDC+USDT back again.

The stablecoin with the highest yield there is BAI, which since I was not familiar with I had to look into a bit. BAI is the stablecoin issued by AstridDAO a decentralized global reserve bank on Astar as well (of course). It is fully backed by collateral and is instantly redeemable for 1$ worth of Astrid.

You might be wondering who is behind Astar network, and from what I could find the company behind Astar is Stake Technologies, a japanese company with many of the employees and atleast 1 of the investors being from Sony. The 26 year old founder of Stake is the also Director of the Japan Blockchain Association and member of the Trusted Web Council led by the Government of Japan. The company itself is based in Singapore, and they have never used a marketing agency, due to Japanese crypto regulations apparently.

Among other partneships and launches, for gamers there will be a gaming protocol called Astar Farms, and they are partnering with Oasys, a layer-one blockchain built for game developers.

Anyways, in case you were wondering if a higher incentive rate for a stablecoin pool is possible, you can check out Muuu Finance, a yield booster where you can stake the Liquidity Pool tokens you get from Kagla, also on Astar.

You might have noticed that on Kagla the reward APRs are given with quite a wide range, that is because it is possible to boost your yield by staking KGL on Kagla to get vote-escrowed KGL (veKGL). This veKGL is the Kagla governance token and allows you to vote, and it also gives you up to a 2.5x boost on your yield.

What Muuu does is it takes the liquidity you provide and it stakes it on Kagla for you, getting the boost from the veKGL it has in Kagla, and this allows you to get that 2.5x boost without having to stake any KGL. In return they get a fee of course, but also give you Muuu tokens that can be staked to get muKGL tokens or locked to vote on Muuu. It's a bit unclear to me what exactly the fee exactly is for the Liquidity providers in this case, but in the (incomplete) docs it says the maximum is 20% so well worth the 250% boost it gives. The apps are still in development so not all the features they explain are fully functional by the way, like I mentioned above, one can not swap KGL yet.

Apparently all you can do with KGL as of now is give them to Muuu to get muKGl in return. These muKGL can not be swapped back for the KGL, which Muuu is keeping to get that 2.5x boost from Kagla I think. But muKGL can be staked to get a share of the Muuu protocol KGl earnings and additional Muuu token incentives.

Anyways, that's it for now I guess, and as always, please Do Your Own Research and don't invest more than you can afford to lose. I'm still just checking out Astar and Kagla and all this myself, but to me it looks like it is legit, although maybe a bit early, with parts of the documentation still being incomplete. As usual, as more liquidity goes into their pools, the incentives will be proportionately lower. Also, as seen recently with UST, stablecoins are not necessarily as stable as they seem in the long term and can fail for various reasons. Please leave feedback below and any comment is welcome.

Posted Using LeoFinance ^Beta

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