Yield Farmer Opportunity with XCM

Just before I decided to publish..

There was a news reported by PeckShield Inc. that Harmony One Bridge has been hijacked by a malicious Hacker(s). Frustrating, many yield farmers and multi-chain yield opportunity seekers lost around 100$ MM in the incident. And, this is not the first time.

The deeper I dig, the deeper I found that the thing they called ‘Trustless Bridge’ from Harmony One. It is not trustless as they advertised. The bridge’s controlled by a small group of people, by small I mean 4 members. This means if those 2 out of 4 accounts holding multi-sig wallet got compromised, they can manipulate the fund freely resulted in all fund lost.

Hopefully, they won’t change their name to Harmony Zero soon. Hopefully.

As after the incident, users lost faith in Harmony pulling fund more and more, and counting. It might take months or even a year to recover the trust from the users back again.

How can XCM prevent this?

XCM is a trustless bridge on Polkadot ecosystem connecting Parachains together without using centralized solution like multi-sig.

How does it works?

Channels are fully safe, secure bridges between parachains. Unlike other bridging protocols, which introduce a 'weakest-link' problem, messages across XCMP channels are secured at the same level as the relay chain.

Parachains open channels to other parachains by sending an XCM message to the relay-chain instructing it to open the channel (and inform the remote chain of the request).

Not only you will be able to transfer a token between Parachains, but NFT can also be transferred as well to find dApp that can operate NFTFi.

Yield Farmer meet XCM

Every timeI found a yield opportunity and degen transferring an asset for juicy APY between Chains using Centralized Bridge, I have a feeling that the bridge might be hacked during the time my fund is in the process of transferring and submitting by the identity.

It is depressed to lose a fund this way tbh, I would rather lose my fund with an Impermanent Loss or even Rug.

Yet, with the reasons I mentioned above about XCM

"Do or do not. There is no try."

Currently, XCM is enable on Polkadot. DOT can be moved freely between Parachain and Relaychain

Now folks, Yield Farmers with our beloved DOT.

Example Options (order from the winners) :

Acala : Liquid Dot, LP DOT pair
Moonbeam: Liquid DOT with Lido Finance, LP with StellaSwap-Curve Finance, Lending on MoonWell Artemis.
Astar : LP on ArthSwap, Dot Collateral on AstridDAO, Lending DOT on Starlay Finance.
Parallel Finance : Liquid DOT, Lending DOT

If you are not satisfied with a Yield on a protocol or even Parachain itself, simply just move the DOT to another one.

Not only XCM creates a trustless bridge but it also creates a huge competitionbetween the dApps on the Parachain and between Parachains.

This is why Parachains such as MoonBeam and Astar have incentive for Yield Farmers to transfer their DOT to their Parachains increasing TVL. Since we cannot deny that most of the time we use DeFillama we see where money flow first.

More TVL the chain has, more users it can attract.

And of course, competition benefits customer.