How to Obtain High Returns on Emerging Public Chains During a Bear Market

The current macroeconomic environment still has many uncertainties, including the impact of trade policies on technology stocks. The launch of the Bitcoin spot ETF has transformed it from a niche asset to a focal point of traditional finance, which also means that Bitcoin price trends will be more susceptible to macroeconomic influences.

In the past two months, the market has been oscillating in the range of 82000-88000, with a lack of new narrative drivers in the secondary market and no sustained performance in the primary market. In this situation, aside from waiting, it is a good choice for investors to use their quality coins and stablecoins for mining to earn passive income.

Recently, an emerging public chain with a built-in DeFi mechanism has launched the PoL( liquidity proof) mechanism, with some project yields even exceeding 100% APY. Let’s take a look at this new mining opportunity.

How the PoL mechanism forms a virtuous cycle

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

2. Validator Allocation: Direct the emission of native tokens 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, user yields increase, further attracting user participation.

3. dApp Competition: To attract validators' native token emissions, dApps enhance incentives, such as increasing native token rewards, thereby deepening liquidity.

4. User Delegation: Users can delegate the native tokens earned to high-performing validators to enhance their block proposal weight, thereby obtaining more sharing rewards, which encourages validators to continuously optimize distribution strategies, forming positive feedback.

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

This mechanism fosters a collaborative relationship among dApps, users, and validators, helping to address the issues of insufficient liquidity and uneven asset distribution in traditional PoS.

Mining Strategies

1. Stable allocation: core blue chips/LSD as the main focus

Core idea: Choose a relatively core, deeply valued, and moderately volatile asset portfolio, such as:

• Native Token / LSD ( as liquid staking derivatives )
• ETH / LSD
• BTC / Other Stable Assets

Advantages:

• Reduce the risk of severe price fluctuations of cryptocurrencies
• Enjoy better liquidity depth
• Multiple rewards can be obtained simultaneously: LSD staking rewards + PoL rewards

Possible sources of income:

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

Risks and Precautions:

• The premium and discount issues between LSD tokens
• Validator's commission and profit-sharing system
• Balance between capital and returns

2. Low Volatility Strategy: Stablecoin/Stablecoin Pairing

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

Possible sources of income:

• PoL Incentives
• Trading Fee Revenue
• Additional rewards or airdrops for the parties involved

Risks and Precautions:

• The credit risk of stablecoins themselves
• The APR is relatively low.
• Protocol incentives are unstable

3. High-risk short-term strategy: Meme coins/emerging token pools

Core idea: Choose newly launched or high-profile Meme coins/emerging tokens and their trading pairs with mainstream tokens, aiming for short-term high APR.

Strategy: Short-term mining and timely cashing out into blue-chip assets or stablecoins.

Possible sources of income:

• PoL Rewards
• Extremely high APR or airdrop

Risks and Precautions:

• Price volatility/project exit risk
• Impermanent Loss
• Need to closely monitor data changes

Conclusion

In this emerging on-chain ecosystem, the incentive competition between protocols is key. The best strategy often requires "decentralization + dynamic adjustment":

• Some funds are allocated in stable LSD/blue chip/stablecoin pools.
• Small amounts of funds are allocated to high-risk, high-volatility small coins or Meme pools.
• Regularly track the changes in APR of various pools, validator commissions, and protocol incentives, and optimize mining returns in a timely manner.

At the same time, be sure to pay attention to security: assess the contract risks of new protocols, the rationality of token models, team backgrounds, etc. High returns are often accompanied by high risks, especially in early ecosystems, so caution is paramount.