How to achieve high returns on a new chain during a Bear Market?

There are many uncertainties in the current macroeconomic environment, and the launch of the Bitcoin spot ETF has further strengthened its connection with traditional financial markets. The market has been oscillating in the range of 82000-88000 for two months, with a lack of narratives in the secondary market and little to mention in the primary market. In this situation, aside from waiting to see how things unfold, using quality coins and stablecoins at hand for mining to earn passive income is a good choice.

A certain emerging public chain has recently launched the PoL( liquidity proof) mechanism, with some mining pools offering yields exceeding 100% APY. Let's take a look at how to mine on this public chain.

How PoL Forms a Positive Cycle

1. Users provide liquidity: Users invest assets into the dApp's liquidity pool, receive receipt tokens, and stake them into the reward pool to earn native tokens, providing initial liquidity for the ecosystem.

2. Validator Allocation: Validators allocate the native token emissions to the reward pool with the highest returns based on the incentives provided by the dApp. As more native tokens flow into the popular pools, users' yields increase, further attracting more users to participate.

3. dApp Competition: To attract validators, the native token emission of dApps increases incentives ( such as increasing native token rewards ) and deepening liquidity.

4. User Delegation: The native tokens earned by users can be delegated to high-performing validators to enhance their block proposal weight, thereby earning more sharing rewards and incentivizing validators to continuously optimize their distribution strategies, creating positive feedback.

5. Ecological Expansion: As liquidity and user participation increase, trading volume and dApp usage rise, network value improves, attracting more users and developers to join, accelerating the virtuous cycle.

This mechanism enables a collaborative relationship between dApps, users, and validators, breaking through the challenges of insufficient liquidity and uneven asset distribution in traditional PoS.

Mining Strategy

1. "Stable Layout" focused on core blue chips/LSD

Core idea: Choose a relatively core, deeply rooted, and moderately volatile asset portfolio on this public chain, such as:

• Native tokens/LSD( such as stBGT, certain ETH, etc. )
• WETH/LSD( such as weETH, ezETH etc. )
• WBTC/some stablecoin

Advantages:

• Reduce the risk of severe price fluctuations.
• Enjoy better liquidity depth
• Can simultaneously "stack returns": holding LSD itself has staking rewards, plus PoL rewards.

Possible sources of income:

• Liquidity Mining ( LP Rewards + PoL Rewards )
• LSD built-in yield
• Protocol Bribe Revenue Sharing

Risk Warning:

• There may be premium and discount issues between LSD tokens.
• You need to choose suitable validators in order to earn mining rewards.
• Consider the balance between capital amount and Gas and transaction fee costs.

2. "Low Volatility Strategy" for Stablecoins/Stablecoin Pairs

Core idea: Choose stablecoin pairs for the stablecoin pool, such as USDa/sUSDa, rUSD/HONEY, etc., to reduce impermanent loss risk.

Possible sources of income:

• PoL incentives ( native token emissions + protocol Bribe )
• Trading Fee Revenue
• Additional rewards or airdrops for protocol parties

Risk Warning:

• Pay attention to the credit risk of stablecoins themselves.
• APR is usually relatively low.
• Bribe incentives may be unstable

3. High-risk Meme coins/emerging token pool's "high APR short-term strategy"

Core idea: Select newly launched or high-profile Meme coins/emerging tokens and their trading pairs with native tokens and stablecoins. These small coin pools often exhibit exaggerated APRs of several thousand percent.

A short-term mining and selling strategy can be adopted: earn rewards in a high APR state and timely cash out to blue-chip assets or stablecoins.

Possible sources of income:

• PoL rewards: New projects often offer a large amount of Bribe
• Extremely high APR or airdrop

Risk Warning:

• Price volatility/Rug risk is high
• The risk of impermanent loss is high
• Pay close attention to data changes

Conclusion: Strategies need to be flexible, dynamic observation is the key.

The ecological essence under the PoL mechanism is a "bribery competition" between protocols. To attract TVL and compete for the emission of native tokens, protocols will offer bribes of varying sizes. Depending on market conditions and budget adjustments, APR can change rapidly.

The best strategy is often not "just lock one pool and forget about it", but rather "diversification + dynamic adjustment":

• A portion of the funds is allocated to relatively stable LSD/blue chip/stablecoin pools.
• Allocate small funds to high-risk, high-volatility altcoins or Meme pools in pursuit of high returns.
• Regularly track the APR of each pool, validator commissions, and protocol Bribe trends, and timely optimize mining rewards.

Be sure to pay attention to security: carefully assess the risks of new protocol contracts, the rationality of token models, team backgrounds, etc. Although the high APY offered by PoL is tempting, the risks of Rug or contract vulnerabilities also exist in the early ecosystem.