$BONK: Real Yields on Kamino
This is part of a series of posts about the Bonk! project on Solana. Check out my profile for the others.
An Introduction to $BONK
$BONK started life as a meme token. And it sort of still is. Big price spike and then a fall.
So far so meme-coin.
But the BONK is different.
If you're interested in defi and crypto then I think you should be paying close attention to what is happening with the Bonk! project. The $BONK LPs (Orca, Raydium etc..) have been consistently high performing pools as goes transaction fees ever since $BONK launched.
Why?
Well the BONK team never stopped building so $BONK usage remains very high.
Read https://www.bonkcoin.com/about and the whitepaper: https://bonkswaps-organization.gitbook.io/bonkswap-white-paper/, and scroll through their Twitter https://twitter.com/bonk_inu and you'll see this team have their eyes set on bigger things.
If you check out their integrations https://www.bonkcoin.com/integrations you'll see they're well on the way to delivering on this vision. There is A LOT here already. And more are being added all the time.
If you follow the Discord link on https://www.bonkswap.io/ it'll take you to the HXRO Discord. blocmates wrote a very good article on what the BONK-HXRO integration is for and why that's important https://blocmates.com/blogmates/defi-flywheels-the-unexpected-hxro-bonk-printer/
Burn Baby Burn
The $BONK burn: For all you degens check out the burn $BONK have implemented. This just keeps running in the background, gradually reducing supply over time.
- https://flipsidecrypto.xyz/kellen/bonk-burns-3aEm3a
- https://www.thebonkfire.com/
- https://twitter.com/BONK_Burn_Bot - burn some BONK and get it tweeted about
I have reservations about burn programs for tokens with hard caps. I can see the upside in the short term being you'll onboard a bunch of people looking to "moon" (and user acquisition is not to be sniffed at) but longer term you want people to use $BONK; not hold it.
Does $BONK need to look to Dogecoin for the long term?
Crazy as this might sound, I think Dogecoin is possibly the eventual winner in POW IF Bitcoin doesn’t remove the hard cap on tokens.
Even if Bitcoin do remove the cap I still think Dogecoin has a real shot at fulfilling the promise Bitcoin had of being a true peer to peer currency. A large part of my reasoning here is they’re actually thinking about how you’d make that happen.
I love their FAQs. Succinct, snarky, and technically on point: https://dogecoin.com/dogepedia/#faq
At some point the people who won’t touch $DOGE because it has a an internet dog on it are way less than those who don’t care how it looks; only how it functions. Hint: this is the younger generations and they are much more technically minded as a cohort.
Dogecoin started out much like $BONK in many ways. They changed the project to suit their longer term vision. I am sure the $BONK community are well aware of that.
$BONK in the market
At time of writing $BONK trades at $0.0000003175. $BONK has a ~$2-3M 24hr trading volume and a market cap of ~$18M.
At time of writing, one of the largest DEXs on Ethereum, Balancer, holds ~$819M in TVL.
Its governance token, $BAL, trades for $4.42. $BAL has a market cap of ~$221M and a ~$3-4M 24hr trading volume.
Let's re-cap what I've just showed you.
A "meme-coin" which is, according to some, past it's "pump" stage (see below) is clocking in regular volumes that rival one of the main protocols on Ethereum.
That volume is coming from usage. That usage means trading fees.
If you're halfway decent at maths you'll know $2-3M goes into $18M a lot less than 3-4M goes into $221M.
Now before you degens jump up and down: Yes I understand there is a huge mitigating factor here. A large percentage of all $BAL is locked up in the voting gauges and thus not circulating in the market.
Yeah maybe you're right. Maybe it isn't a fair fight.
Let's find a fair fight then.
Another way to look at it is (at time of writing):
- $ETH has a $6,948,435,327 24hr volume on a $209,637,816,418 market cap. That's a 3% usage (only about 15% of ETH is staked https://www.coingecko.com/research/publications/ethereum-staking-statistics)
- $BONK has a $2,660,773 24hr volume on a $17,803,098 market cap. That's a 15% usage.
So we've established:
- $BONK is being traded a lot, even by the standards of some of the largest tokens in crypto today
- $BONK is highly volatile price-wise
Real Yields: Kamino $BONK vaults
How do you take advantage of transaction fees?
Why LPs of course!
Both of the current Kamino $BONK vaults are Orca Whirlpools (filter for Ecosystem vaults) https://app.kamino.finance/
Whilst you can manage your Whirlpool positions on Orca without Kamino, it is time consuming and requires a deep understanding of concentrated liquidity. Definitely take the time to read up regardless: It's a fascinating topic.
Orca Docs https://docs.orca.so/orca-for-liquidity-providers/master
Orca blog https://medium.com/orca-so/introducing-whirlpools-concentrated-liquidity-on-orca-3987c131a44d
If you think you're up for the challenge of managing your own positions there are a wide range of $BONK options available (with varying degrees of risk). They even have an SMS notification for when your positions go out of range (wakey wakey degen! Time to rebalance the pools!).
https://v1.orca.so/liquidity/browse?tokenMint=DezXAZ8z7PnrnRJjz3wXBoRgixCa6xjnB7YaB1pPB263
We're going to leverage the automated tools Kamino offer us to get exposure to the trading fees instead.
Navigate to the vault's page on Kamino. In this case we're going to BONK-USDH https://app.kamino.finance/liquidity/bonk-usdh-orca/8XgX1EkSHC43mwdaUCZeXL2JVFz15JJynFrcxrQa3jss
We'll deposit half our $BONK.
We'll select 'Auto swap uneven amounts' and Kamino will look after getting us into the correct token ratio for the pool.
If this is your first depositing in the vault then Kamino will ask you to approve 3 transactions. After that you've created an account for that vault, for future interactions, you'll just need to approve two transactions (if you're using Autoswap).
And you're done!
Navigate to the Portfolio page you can easily track your performance over time. https://app.kamino.finance/liquidity/my-portfolio
Withdrawing is the same process just in reverse.
For a full overview of using Kamino see their excellent series of defi explainers https://blog.kamino.finance/tag/defi-basics/. Highly recommended for anyone starting out in defi.
>999% APY? Really?
Now ~25% doesn't seem like much right? $BONK vaults have regularly hit 3 figures in terms of APY and sometimes over 999%.
That may sound ludicrous, but it's not; it's just maths. The significant amount of trading volume (which I flagged earlier) combined with the increased yields that concentrated liquidity provides gives you a recipe for a really high yielding asset.
I can't do a better job at explaining this than Kamino's own blog so head there to read up on how this works https://blog.kamino.finance/high-apy-market-making/
