High APRs in UNISWAP V3....Where have they gone??

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300-500% APR on Blue Chip Crypto?? Possible? This was common for @Uniswap V3 concentrated liquidity pools in 2021-early 2022. A SLOPPY trading process was REWARDED. First, let's reminisce about some of the great yields in $BTC and $ETH pools back in the day. 👇👇👇

$BTC $USDC pool. Range $16999-24956. - Avg yield over 12 days - 203% - Highest earning yield in a day - 511% APR - Today? You'd be lucky to see 40% with this range.

$ETH $USDC pool. Range 930-1503. - Avg yield over 12 days - 186% APR - Highest earning yield in a day - 461% APR - Today? Lucky to see 40% with this range.

$BTC $ETH pool. Range 0.0725-0.08 BTC per ETH. - Yield earned in one day - 102% APR

What caused the drop in APR's lately? Increasing LIQUIDITY & more ACTIVE USERS. It's INCREASING in the DeFi space. You need to prepare or get left behind! More liquidity = more players in the market. More mouths to feed yield to. This means APR % lowers. BUT!!!

More liquidity means tighter spreads, better pricing for large orders, which allows more whales to transact in DeFi. A 0.7% slippage during high volatility may not seem much on a $5k swap, but on a $100k or $1 million transaction? That's $700-$7,000 in SLIPPAGE ALONE!

Liquidity is VERY fragmented in DeFi. We are SOOO EARLY it's not even funny. Welcome the increased liquidity. But this means yields will dilute. Part of the game unfortunately. Although, with @Uniswap code now available for use. We could see new opportunities throughout DeFi. :)

A quick look at @DefiLlama shows that TRANSACTIONS have been INCREASING lately. More people are using DeFi in recent times. This shows confidence growing in the space.

There are more active users. More mouths to feed in yield. Bad for high APR sloppy pools, but great for DeFi as a whole!

Even though activity is up TVL has been relatively flat with a slight incline. When it picks up & grows this will further dilute yields in the space. Not great news for those of us hoping that high APR's can last. But market inefficiencies get closed up quick. Nature of markets.

So what does this mean? It means as liquidity pours in, users increase, yields decrease.....your strategy needs to be AIR TIGHT! You can't be a sloppy farmer like in the 'ol days and earn triple digit APR's on blue chips and call it a day. You must EVOLVE!

Your strategy needs to be lean, make fewer mistakes, while honing and sharpening your edge. It will only get tougher out there. Understand how impermanent loss works, how to properly structure your pools, rebalance your pools properly, using mean reversion & delta hedge tactics.

Those that do NOT evolve WILL BE left behind. If you want to learn how to become a better yield farmer in concentrated liquidity pools join my Discord for free. Ask questions. I even provide a FREE wallet analysis to go over your LP strategy. discord.gg/uBqJ8gasFX

You can read the unrolled version of this thread here: typefully.com/FLOAT_LOCKER/1RHs2Ck