In case anyone still doesn’t know what sAVAX is, it is the token that represents the liquid staking offered by the lending platform Benqi. Unlike what happens when you stake in the traditional way, liquid staking means that you can use your $AVAX while it is staked and earning interest, rather than having to leave it idle until you unstake it. This has allowed a huge liquidity of previously static $AVAX to come into circulation in the various DeFi strategies. To get $sAVAX you have two options: stake your $AVAX directly from Benqi, or swap AVAX-sAVAX in a DeX (like Trader Joe) or aggregator (like Paraswap). Usually with the second option you will get a bit more in exchange, but it is recommended that you check both options first. It is important to mention that in this stake mode the interest generated is reflected by the progressively increasing price of the sAVAX token: as of today, 1 AVAX = 0.9875 sAVAX, and this difference is slowly increasing at a rate of 7.20% APR currently.
Next, I am going to propose 3 possible strategies to follow with your sAVAX, although they are not the only ones and new possibilities are appearing every day.
Deposit in Platypus, Vector or Echidna Finance
A simple and effective option is to simply deposit your sAVAX in Platypus Finance, where you can generate extra interest on top of the interest already generated by the nature of the token (called yield-bearing tokens). Platypus currently offers 10.8% APR, which is in addition to the 7.2% of sAVAX, without any risk of Impermanent Loss. Another linked option is to deposit it with Vector Finance or Echidna Finance, which are protocols that run on Platypus and offer higher interest rates (Vector is now offering 14.2% APR).
Use your sAVAX as collateral at Anchor Protocol
If you like strategies of offering collateral and borrowing stablecoins, the option of putting your sAVAX as collateral in Anchor is interesting. Anchor is a protocol that works mostly with the Terra network, but has recently added sAVAX as a collateral option after its partnership with Avalanche, so when you use this protocol your assets will be moved through the Portal Wormhole bridge without you even noticing it. So, you can put your sAVAX as collateral (7.2% APR), borrow $UST (-5% APR approx) and stake this $UST in the same protocol (19.5% APR). Don’t forget to keep your liquidation risk at reasonable levels and keep an eye on market movements.
Use your sAVAX as collateral in Yeti Finance
Yeti Finance is a lending protocol, but compared to Anchor, it takes it to another level of complexity. Before even thinking about using this strategy I recommend doing some research on how it works, as the learning curve can be steep. However, once you understand it, it is a very interesting lending dApp. Without going into detail, the key is that here you can choose between numerous different options as collateral, and many of the options are tokens or LPs that generate interest, which the protocol itself autocompounds at the same time that they are as collateral, in return for charging you a small % of the deposit and the interest generated. In the case of sAVAX, you can put it as collateral at a Safety Ratio of 0.917, which means you can get a high amount of YUSD (stablecoin) borrowed in return. Here sAVAX is just one of many options for collateral, so it is advisable to use it as a way to diversify your Trove.
These are just 3 possible strategies, but there are many others, such as pooling AVAX-sAVAX and leaving it in YieldYak for autocompund, you can take advantage of KyberSwap’s temporary incentives to get high APRs, or you can wait for AAVE to implement it in their protocol as collateral. The options to generate interest with $AVAX are growing, so don’t miss the opportunity!