🏊‍♂️ Liquidity Pool of the Week: on Aerodrome - DEFI Yield Farming Strategies

In this week's spotlight, we dive into a unique opportunity within the Aerodrome ecosystem — the USDC / cbBTC liquidity pool. This innovative pairing combines the stability of USDC, a leading stablecoin widely recognized for its peg to the US dollar, with cbBTC, a bridged Bitcoin asset that allows for seamless integration between traditional finance and decentralized finance. The liquidity pool not only offers a way to earn yields but also provides a hedge against market volatility, which is particularly appealing in the current economic climate.

Moreover, the inclusion of cbBTC introduces an exciting layer of exposure to Bitcoin’s price movements, creating a balanced risk-reward scenario. Personally, I find myself gravitating towards USDC and other stablecoin/volatile asset pools right now, as they provide a level of comfort and security until the market sentiment shifts towards a more bullish outlook. As always, it’s essential to stay informed and strategically navigate the complexities of the DeFi landscape to maximize potential gains.

📊 Pool Overview

• DEX: Aerodrome (Base)

• Assets: USDC (Stablecoin) / cbBTC (Bridged Bitcoin)

• TVL (Total Value Locked): $12.58M

  • In-Range TVL: $183.2K

  • Active TVL: $4.16M

• Staked TVL: $9.62M (over 76% of total TVL is actively staked)

• Deposit Sample: $335.57 (0.00224 cbBTC + 158.14 USDC)

• Fee Tier: Appears to be low/no fees collected over the last 7 days

• Platform Contract: 0x4e96...e778

💸 Yield Dynamics

• Weekly Rewards: $260,940.80 in incentives

  Rewarded TVL: $131K

• Reward APR (Annualized):

  • Weekly: 464.34%

  • Daily: 8.91%

  • Hourly: 1.27%

RANGE IDEAS

Currently, this is my personal range. I just rebalanced on 4/5, and this position is small for now because I anticipate bitcoin will decrease a bit more in price.

BITCOIN PRICE MOVEMENT AND IDEAS FOR RANGE

This high APR suggests aggressive incentivization, potentially from Aerodrome’s emissions model or a short-term rewards campaign, which is commonly seen in early-stage or under-utilized pools to attract capital.

🔍Potential to Earn Fees

While the in-range liquidity ($183K) is currently a small slice of the total TVL ($12.58M), the high yield and incentivization indicate that active LPs within the right price bounds could earn outsized returns. The lack of trading fees in the past 7 days suggests minimal swap activity — a possible trade-off for the high reward environment.

From a strategy perspective, this pool currently leans incentive-driven rather than fee-generating. LPs might consider:

• Narrowly concentrating their liquidity for higher capital efficiency.

• Monitoring cbBTC’s peg and volatility against USDC to avoid impermanent loss.

• Evaluating the sustainability of rewards over time.

⚖️ Risk-Reward Profile

Final Take

The USDC / cbBTC pool on Aerodrome is a yield farmer’s delight — packed with incentives and ideal for those seeking short-term high APRs. However, the absence of trading fees and low swap activity signal that this is more of a farming play than a passive LP income stream — at least for now.

For LPs who can manage positions actively and take on temporary risk, this pool offers a juicy opportunity. But be ready to rotate when incentives taper off.