"Alpha Exploration Series 15" by Dongqu Community - Rings Protocol (@Rings_Protocol)

In the past week, well-known protocols such as Aave, Pendle, and Royco have successively expanded to Sonic, and Fluid, the second-largest DEX by trading volume, is also considering entering, making the Sonic ecosystem a continuous hotspot for yield farming.

According to DeFiLlama data, among the top six protocols in the Sonic ecosystem by TVL, Rings Protocol has the fastest growth, with its TVL surpassing $48.59 million, growing 488% weekly and 2,037% monthly, and it is a partner of Pendle in Sonic. Next, this article will delve into Rings Protocol and how to participate.

🔹 What is Rings Protocol?

Rings is a DeFi protocol on Sonic that allows users to deposit stablecoins, $ETH, and $BTC derivatives to mint corresponding yield-bearing assets scUSD, scETH, and scBTC, which can then be staked to earn yield or participate in Sonic ecosystem applications.

Rings generates yield from Veda Labs' BoringVaults, where funds are deployed into DeFi protocols within Ethereum and Sonic for farming, optimizing yields through automated strategies.

🔹 Three Core Assets

Rings operates around three core assets:

1️⃣ scUSD / scETH / scBTC: Basic yield-bearing assets usable within the Sonic ecosystem, but without direct yield. Redemption takes 5 days.

Suitable for: Users who wish to participate in the Sonic ecosystem without caring about direct yield.

2️⃣ stkscUSD / stkscETH / stkscBTC: Earned by staking sc assets, providing direct yield. Unstaking takes 5 days.

Suitable for: Users who want stable returns without participating in governance.

Additionally, the above two asset types can also be exchanged in the secondary market, but users should be mindful of price differences and trading slippage.

3️⃣ veNFT: Governance asset that allows voting to influence yield distribution and profit through a bribery mechanism.

Suitable for: Users willing to participate in governance and earn through the bribery mechanism.

🔹 Is Rings Safe?

Rings has passed audits from Spearbit and 0xMacro, and has implemented the following risk control mechanisms:
✔️ Assets are only deployed in audited protocols with TVL over $100 million and operational for more than 6 months, excluding high-risk strategies
✔️ 5-day redemption cooldown period to prevent flash crashes
✔️ 24-hour Timelock to reduce governance attack risks
✔️ Deposit limits: 10% of deposits for a single protocol on Ethereum, 25% on Sonic, to reduce concentration risk

🔹 Farming Strategies

In addition to the yield mechanisms within Rings, there are various high APY schemes within Sonic. Below are several participation methods using Bitcoin as an example:

・Beets (@beets_fi): scBTC provides up to 100% LP APY, and based on different pools, users can earn corresponding Rings points, 8x-12x Sonic AP points, and 3x Lombard Lux points (for the scBTC/LBTC pool, with bilateral investment restrictions).

・SwapX (@SwapXfi): scBTC LP APY up to 185%, with WBTC/scBTC pool (with unilateral investment restrictions) having an APY of 1.19%.

・Shadow (@ShadowOnSonic): WBTC/scBTC pool offers 43% APY.

・Metropolis (@MetropolisDEX): scBTC-USDC.e pool offers 35% APY.

・Silo (@SiloFinance): Deposit scBTC to earn 1 Silo point per day, while borrowing earns 0.5 Silo points.

・Lombard (@Lombard_Finance): Deposit LBTC or eBTC into Lombard Bitcoin Sonic Vault to earn 2x-4x Sonic AP points, 4x Lombard Lux points, 3x Veda points, and 1x Babylon points (currently not redeemable).

$ETH and stablecoins can similarly provide liquidity in the above DEX and lending protocols, earning yields and points. The differences are:

・scETH/stkscETH and scUSD/stkscUSD can earn passive points, only needing to hold them in the wallet to be eligible for $S airdrops.

・Pendle (@pendle_fi): Launched wstkscUSD and wstkscETH (May 29) market.
> wstkscUSD-YT: Rings 2x + Sonic 12x + Veda 3x; PT has 14.4% fixed return.
> wstkscETH-YT: Rings 1.5x + Sonic 8x + Veda 3x; PT offers a fixed return of 10.62%.

・Royco Protocol (@roycoprotocol): By depositing USDC for more than 30 days, users can earn an APY ranging from 44% to 183%.

Conclusion: Sonic farming opportunities are worth paying attention to.

Sonic, led by DeFi pioneer AC, will airdrop nearly 200 million $S tokens (25% immediately unlocked) before the end of June, allowing users to participate in the ecosystem to earn generous APYs while also providing an additional layer of income opportunity.

Compared to merely holding coins for price appreciation, participating in Sonic for yield farming may be a more robust choice. However, DeFi investments come with risks, and investors must carefully assess the sustainability of the protocols and determine their participation strategies based on their risk tolerance.