The Humble Farmer Portfolio

Watch video version here (write-up below):

As we enter what many call, “late cycle,” I believe there are elevated risks to the markets we can not ignore. It becomes more important to think about your portfolio holistically and create an all-weather portfolio that not only protect from downside but also benefit from asymmetric opportunities.

As a humble farmer, I’ve developed a framework that mixes the best of both worlds, that can be iterated depending on the reader’s preferences.

The “Humble Farmer Portfolio” framework (with allocation %’s):

• Stablecoing Farming (30-60%)

• Owning Good Coins, Spot (30-60%)

• Airdrop Farming New Perp DEXes via Shorting (1-10%)

Stable yields tend to compress in a bear market, and pay extremely well in a bull market. A wise farmer once told me, “if you are farming in DeFi, you are indirectly long alts because good returns require alts being in a bull market.” It’s really hard to lose as a stablecoin farmer (as long as you don’t get rugged) since you’re the one dumping tokens on dumb money buying them.

By holding a healthy stablecoin stack, you can earn >15% in a bull market while improving your sleep-adjusted returns. The main upside of holding stables is we get to buy coins cheap in case we enter a bear market.

Many have argued for the “death of cycles,” meaning strong assets like BTC can drift higher like the stock market. Crypto has also produced true compounders like BNB, where you’re better off owning it over trading it. We also have to accept that if “this time is not different,” all these coins are going down at least 50% in a bear market.

That’s why as a humble farmer, we must take our ego out of it and own assets we think will outperform over time, understanding that we may eat some drawdowns. This requires proper due diligence and research, and forming a thesis with conviction, which I know you’re good at 😉

Finding edge in liquid markets will only get harder over time. In the last few years, I’ve realized that the edge we have as retail users is the ability to try new things, and get rewarded in the form of airdrops. How many people have “made it” farming Hyperliquid, relative to those that made a lot of money PvPing each other in memecoins?

I used to think Hyperliquid was the last huge perp DEX airdrop. Now, I think Lighter is also going to cook. After Lighter, people will say Lighter is the last big airdrop in the perp sector and new ones are not worth farming.

I challenge this view, because even now we have multiple alt-L1’s and L2’s with no users with billions in FDV. If perps are one of the killer use cases of crypto, why can’t there be multiple valuable perp DEX coins? Can there be 1-2 huge airdrops per year? The odds may be higher than you think.

Then the question becomes, how do we farm and where do we farm?

“Just become a profitable perp trader bro.” Yes, but unfortunately the odds are stacked against us since most people lose money on perps. So it’s in our best interests to size down and develop a holistic strategy that also benefits the rest of our portfolio.

I’ve started toying around with this strategy with varying success, and that is to short high FDV coins with positive funding, on very small sizing.

The goal isn’t necessarily to mimic “The Big Short” and make insane gains shorting coins. The goal is to farm points and also complement the rest of your portfolio. Perp DEXes historically reward OI (Open Interest) over volume:

If we already have long exposure with our spot holdings, perhaps our entire portfolio benefits by having some short positions open, especially since most coins on perps have positive funding (meaning you get paid to short). Personally, I hold a few shorts open for coins I don’t mind inverse investing in for a few months. If it goes up 50%, I can inverse invest in it more.

If the market goes up, you make more money from your spot holdings than you lose shorting. If markets continue pumping, the airdrop you’re farming will be worth a lot in the future. If we enter a bear, well at least you were being paid to short things going down (though the airdrop may be worth less).

People often joke about how much vaporware exists in crypto worth billions... Why not be paid to short them? In my experience, I’ve had success shorting coins with very small size, and adding more on the way up. For example, if you have a $100,000 portfolio, you can begin shorting $500 on 1x leverage, and adding more if it goes higher.

This might not be the sexiest thing to do...until the airdrop hits your wallet. For example, I used Hyperliquid’s closes Alpha in April 2023 and did a few thousand in volume and deposited to HLP and got over a $100,000 airdrop. I also made some terrible trades on Lighter in March/April 2025 and got a lot of points (and got lucky with referring big traders).

It feels like every time I farm a new perp DEX, I regret that I simply did not farm enough. It literally pays to be early. There’s probably a signal in there, somewhere.

The obvious risks are like shorting something that goes 100x and farming a garbage perp DEX that never TGEs. But you can mitigate this by with sizing and picking the right coins/platform. I’m not saying to never long coins either, but I think the “short small” strategy is a good default to have.

@hansolar21 built a good dashboard you can check out if you want help choosing which perp DEX to farm. I also encourage talking to teams and joining Discords to see what’s worth farming and what’s completely DOA:

If you farm something like Lighter, your points are guaranteed to be worth something but it’ll be harder to farm. A new perp DEX with less adoption will be easier to farm points, but there’s a risk it might be worth zero. A tradeoff always exists! Maybe the best strategy is to use multiple perp DEXes so you understand the sector better.

Best of luck, humble farmers!