Thread by @Route2FI

The aUST - $MIM Degenbox strategy is ready.

You can get 20% APY on Anchor Protocol on your $UST.

But since you're a real degen you want more, right?

Don't fear, anon.

I will show you how to get 100% + APY.

A step-by-step thread.

Warning! You may end up filthy rich.

/THREAD

If you have no idea what I'm talking about, then read my big thread about the concept first.

You have to understand that using this strategy (leverage) is an increased risk.

Therefore, read this first:

https://twitter.com/Route2FI/status/1450771403490447363?s=20

1/

What do you need?

- Metamask
- $UST

As of now, we have to use the $ETH network.

I know what you're thinking.

"Insane gas fees". Right?

Yeah, they are, but there won't be that many transactions. I promise.

Let's look at how you can get $UST into your Metamask

cont.

/2

Let's use $10,000 as an example.

What I like to do is to use 1inch for swapping: app.1inch.io/#/1/swap/USDT/…

Step 1: Connect your Metamask
Step 2: Swap your preferred currency (eg. $USDT)
Step 3: Recieve $UST (Wrapped UST)

Let's ignore gas fees for now (I will come back to it)

/3

If you have $UST in your Metamask now, don't worry about the tweet below and nr. 5.

For Terra people: If you already have a Terra Station wallet and use Anchor Protocol as a daily routine, you probably already have $UST.

But we need to bridge it to the $ETH network.

cont.

/4

Go to: bridge.terra.money

Enter the amount of $UST you want to send to the $ETH network.

Then enter your Metamask address.

Warning! Always send small amounts the first time you do this.

One error and your money will be lost.

Confirm and pay Terra gas fee (low).

/5

You should have your $UST in your Metamask right now and we're ready to try the strategy.

Go to: abracadabra.money/pool/19

Connect your Metamask wallet.

You should see the page below.

Scroll down until you find $UST, see the next tweet.

/6

When you find $UST, you click on it and you will come to this screen (see screenshot below).

This is the Cauldron where the magic happens.

Here you will be able to deposit your $UST in order to borrow $MIM and loop your position up to 10x.

/7

Let's say you have $10,000 you want to deposit.

If you choose a liquidation level of 90%, then you will be able to borrow 8862.11 $MIM.

It should be 9000 $MIM, but I guess this is just a security mechanism.

cont.

8/

Anyway, you will now receive 16.5% APY on your $10,000 + your 8,862 $MIM.

Effective APY so far: 31.1%

But we are far from done!

Let me show you the degen way with 10x looping.

/9

So we still have our $10,000.

We've borrowed 90% (8,862 $MIM).

Then press the button "Change leverage" and you will be able to choose the number of loops.

Here I show you 10x loops which will give you 112% APY.

Why 112%?

You promised 160% APY.

cont.

10/

It's 112% APY because we have $10,000 and borrow 57,432 $MIM (10x loop).

We get 16,5% interest rate on $67,432 (10K + 57,4K)

$67,432 x 1.165% = $78,558, which means we've earned $11,126 from our $10,000 position.

$10,000 x 1,12 (112%) = $11,200 ($74 diff, but okay..)

11/

Why not 160% ?

When we first heard about the strategy we thought we would get our initial 19.5% that Anchor Protocol gives you and 8x loop = 156%.

But because of the mechanisms that @MIM_Spell does (see pic), by bridging from ETH to Terra, then into @anchor_protocol and..

/12

then back to ETH, 15% of the UST deposit will be stored in the Degenbox.

19.5% x (1-0.15) = 16.5% APY without looping.

If we use the max liquidation price of 90% and loop 16.5% 10 times we get 112% APY.

I hope this is more clear now.

Let's talk about fees.

13/

We are the $ETH network and the fees are crazy right now.

But in order to do this strategy, you only need to do 2 $ETH transactions.

1. When you convert eg. $USDT to $UST on 1inch.
2. When you do the Degenbox strategy. Remember everything I have described with the ..

/14

borrowing of $MIM and looping 10x? You do everything in one step!

Now that's some magic from the Abracadabra team!

If you come from Terra you only need 1 $ETH transaction 🌖

Obviously, if you want to repay your $MIM or exit the strategy you need to do an $ETH txn as well

/15

About the liquidation price:

I recommend you to play around with the numbers in Degenbox, use different liq. levels, choose different x of loopings, and go with what you are comfortable with.

Personally, I go for 5x looping which gives 76% APY and a $0.87 liq. price.

/16

This means that $MIM can't go below $0.87.

Approx once per week, you will get your yield from this strategy deposited into your collateral.

Week 0 you have: $10,000
Week 1 you have: $10,145 (112% APY)
Week 52 you have: 21.200

The numbers seem small with $10K.

But..

/17

You're a degen and I guess if you're only going to do this play with $10K, I think you're better off trying $TIME which gives you 74,000% APY right now (high risk obviously), but you get my point.

Anyway, why is it great that your $UST collateral is increasing?

Because...

/18

it allows you to borrow more $MIM.

And with more $MIM you can maximize your strategy even more by increasing your position (increase your APY).

Or you could just lay back and chill because as your collateral increases, your liquidation price level goes down.

/19

This is logic, right?

The more collateral = the less risk.

So if you don't borrow more, the strategy gets safer.

What does it cost to borrow $MIM?

The price is 2% APY which is basically nothing.

And there's a 0.5% fee for borrowing $MIM.

20/

Right now the demand for $MIM is so high that it's actually not possible to borrow that much $MIM.

Only 10,3K $MIM is available right now.

20 million $MIM was borrowed after 10 minutes yesterday.

Follow @MIM_Replenishes to get the latest update on when more is available.

/21

Risks:

-Liquidation
-Smart contract risk
-$MIM as a stablecoin (I trust it, but DYOR)
-$UST as a stablecoin (I fully trust this too)

/22

I believe this strategy is a huge step in the right direction of what's possible with DeFi.

If you understood everything, you're one of the very few in the world.

I believe we're early and that we have an advantage.

We will get wealthy.

And we don't need Wall Street.

/23

That was everything.

I hope you learned something new, and follow me at @Route2FI for more DeFi hacks.

I also have a newsletter where I write about DeFi, crypto, and financial freedom.

It's 100% free:

getrevue.co/profile/route2…

/24

If you enjoyed this thread, I would love it if you could help me share it by retweeting and liking it.

https://twitter.com/Route2FI/status/1458072000602202114?s=20

Thank you so much everbody!

/25