Yesterday I posted a thread called:

"What if you could 2-3x your DeFi yield on stablecoins without using leverage?"

I forgot to mention that you can improve your gains even more by using @SpecProtocol !

+I want to talk a little bit about risks

Ready to earn more $$$?

In case you missed the thread, here it is:

Make sure you read that one first👆

Just to clarify yesterday's thread, what I actually described was 2 different strategies:

1. Delta Neutral (no IL)
2. Delta Neutral Yield Optimizer (IL may occur)

IL means impermanent loss and I'll get back to this later in the thread.

But for now, let's do a quick recap of the 2 different strategies:

Delta Neutral (no IL):

1. We start by depositing 50% on Anchor
2. Then we short the mAsset (eg. mTWTR) by using our aUST (44,4K)

3. Then we borrow mTWTR by using 44,444 aUST. After 2 weeks we get back our short collateral which we can deposit into Anchor again.

That's it, we're now delta neutral.

Let's look at strategy 2:

Delta Neutral Yield Optimizer (IL may occur)

Steps 1, 2, are exactly the same. The difference is that step 3 is a little bit different + there's a step 4.

3. Instead of borrowing using aUST. We want to buy using $UST. So we buy mTWTR for 25K $UST

4. In step 3 we bought mTWTR. Now we want to pair it with an equal amount of $UST (so we put in 25K $UST).

In both strategies, we've now spent $100,000.

Hopefully, that was a little bit clearer, if not I'm going to give you some links in the end which makes it easier.

Strategy 1 APY (Delta Neutral):

You short with 50% of your money: 41% APY
You buy the asset with 50% of your money: 20% APY

So far: 30,5% APY

After 2 weeks you get back your collateral of 25K $UST --> APY increases to 40.33%.

Strategy 2 APY (Delta Neutral Yield Optimizer):

You short with 50% of your money: 41% APY
You go into a long farm with 50% of your money: 27% APY

So far: 33,75% APY

After 2 weeks you get back your collateral of 25K $UST --> APY increases to 45%.

I thought I was done there, but some smart people commented below my last thread that we could use @SpecProtocol to further increase our APY.

So let's present Spectrum.

Spectrum Protocol:

Spectrum is a yield optimizer that allows users to earn ...

compound interest on their LP farming crypto assets.

Remember on Mirror we got 27% APY in the long farm? (see screenshot below).

Then let's see how much we've gotten on Spectrum (next tweet).

On Spectrum Protocol we could have got 46.75%.

That's almost a doubling from 27%!

Let's look at the effect this would have had on our total APY.

Strategy 2 APY (Delta Neutral Yield Optimizer) by using Spectrum:

You short with 50% of your money: 41% APY
You go into a long farm with 50% of your money: 46.75% APY

So far: 43.6% APY

After 2 weeks you get back your collateral of 25K $UST --> APY increases to 58.2%.

To just summarize this quickly, we would have increased our total yield from 45% to 58.2% by doing the exact same thing!

So from Anchor's 19,5% APY we now land on 58.2% APY which is 3x our initial investment.

Why fear ber markets anymore, anon?

$UST got you covered!

Now let's talk about te different kind of risks:

1. Smart contract risk
2. Impermanent Loss
3. Liquidation risk
4. $UST peg risk

Smart contract risk:

When you deposit money into protocols, you’re putting your money in smart contracts.

Smart contracts may be vulnerable to cyber-attack and technology failures.

By using this strategy you are using 3 different protocols.

This means 3 different sets of code you have to trust.

What if Anchor/Mirror/Spectrum crashes permanently? Then your $UST will be gone.

The risk is probably 0.01% for this, and I do trust these protocols fully, but it's worth mentioning.

2. Impermanent Loss (only relevant for strategy 2)

And remember I mentioned "Impermanent Loss" in tweet number 2?

Impermanent loss happens when you provide liquidity to a liquidity pool, and the price of your deposited assets changes compared to when you deposited them.

The bigger this change is, the more you are exposed to impermanent loss.

Sounds scary AF, doesn't it?

Let me tell you why you shouldn't worry.

1.5x price change = 2.0% loss
2x price change = 5.7% loss
3x price change = 13.4% loss
5x price change = 25.5% loss

Remember we're buying stocks and commodities like gold/silver, so we're not expecting huge price swings.

In the last thread, I recommended you try to choose mAssets that were less volatile.

Choose big tech stocks over RobinHood / GameStop.

It's very seldom a stock swings more than 100% in a year.

And if it does you may have a 5.7% loss in your long farm reducing your APY from 46% to a little over 40% (which still is great, isn't it?).

I'm not that worried, and I don't think you should be either.

3. Liquidation risk:

When you short or borrow an mAsset you need to put up a 200% collateral for the asset.

What this means is that if you short mTWTR and the price increases by 25%, you will get liquidated.

That's why you have to monitor the asset and see that it performs well from time to time.

You could however increase your collateral at any time if the price of mTWTR continues to go up.

And no, you don't lose money.

Because if the price goes up, your long goes up too!

4. $UST peg risk:

I've written extensively about this here:

Read from the tweet in the link until the 20th tweet in the link.

That was all.

I hope you learnt something new today.

Follow me on Twitter for more DeFi hacks @Route2FI

And subscribe to my newsletter if you're interested in financial freedom, DeFi & crypto in general 👇…

Want to earn money from both crypto and Twitter?

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More from @Route2FI

29 Oct
What if you could 2-3x your DeFi yield on stablecoins without using leverage?

Let's say you have $100K

Normally you would get 20% APY = $120K

But why not get 40-60% APY? = $140 - $160K

Too many people are sleeping on free $$$

Let me guide you through it step-by-step

To understand how this works, we have to say hello to the Terra Ecosystem and their protocols called @anchor_protocol & @mirror_protocol

You can read my full thread about Anchor Protocol here:

Read the thread about Anchor first, then move on👇

Now that you understand Anchor Protocol, it's time to learn about Mirror Protocol.

Mirror is a DeFi protocol that enables the creation of synthetic assets called Mirrored Assets (mAssets).

mAssets mimic the price behavior of real-world assets.



Read 28 tweets
20 Oct
What if I told you that it's possible to get 160% APY (yearly interest rate) on a stablecoin?

Let's say you have $100K.

One year later that would turn into $260,000 while you do nothing.

A deep dive into how you can do this yourself & how this is bullish for crypto.

Let me present Anchor Protocol which works as a savings bank.

You deposit the stablecoin $UST.

In return, you get a 19,5% interest rate.

$1 UST = $1 USD.

I've explained everything here:

But you wanted 160% APY, didn't you, anon?

Read on 👇🚨

When you deposit $UST on Anchor Protocol, you get aUST.

aUST is a yield-bearing-collateral.

1 aUST = 1.12 $UST

Back to our numbers.

If you have $100,000 $UST and deposit this on @anchor_protocol, you'll get 89,286 aUST back.

So how do you go from 19,5% to 160% APY?

Read 30 tweets
28 Sep
I deposited $216,000 into Anchor Protocol.

A thread that will give you a deep dive into how a crypto savings account can generate $3,500 passive income per month (19,5% APY).

Earlier on I’ve heard about people receiving 10-12% APY on stablecoins.

In my mind that sounded awesome.

If you’re a hardcore crypto-dude reading this, remember I made my wealth in the stock market where 10% per year is what’s expected long-term.

As I started to dig deeper into stablecoins I found Anchor Protocol which is a part of the Terra Ecosystem (the biggest coin per market cap is $LUNA).

Anchor Protocol is a protocol that promises a stable savings rate between 19-20% per year on their own stablecoin $UST.

Read 32 tweets
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You will learn it all from my bestselling book!

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14 left! 🔥
12 left! 🔥
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I reached financial independence and quit my 9-5 job this week at 33 years old to work with my own projects.

A thread with lessons about:

One day in 2018 when I was in my 9-5 cubicle, I thought to myself while I stared out of the window:

How could I continue waking up every morning and be totally unexcited about everything I was going to do day after day?

This led me to Google:

“How to quit my job forever”.
You know the rest of the story.

Early Retirement Extreme and Mr. Money Mustache are the first pages popping up.

I read everything in a couple of days.

There was really no way back.

WTF, could I quit my job in a couple of years by investing?
Read 29 tweets

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