Thread by @dkcrypto13

Assuming you have $SOL sitting somewhere and you do not wish to sell it, but want to hold it and maximize yield, here is one thing that currently works like an endless #yield loop:

1) Split the $SOL 50/50 into @MarinadeFinance and @SoceanFinance - liquid staking for 6.75% annual

2) take your $mSOL and $scnSOL (the token you receive in exchange for staking) and deposit them as collateral on @solendprotocol receiving additional 1.8% yield on those

3) borrow $SOL from solend, which is being subsidized with $SLND rewards and has a NEGATIVE borrow cost of 5%

4) take the $SOL you just borrowed and rinse / repeat steps 1-3 above as many times as you dare

5) take the final $SOL (after the last repetition you dare to do) and deposit them as collateral on @TulipProtocol for an additional yield of 5.5%

Assuming you dare to do steps 1-3 5x, you should end up somewhere between 60-70% annualized yield on your $SOL. You can dare to go higher or choose to go lower of course.

Why does this work? Because currently, solend is subsidizing activity on their lending platform.

Essentially you are being paid a reward in $SLND token that is higher than the cost to borrow $SOL, so that, once you have collateral on the platform, you can borrow the $SOL "for free" or even earn a bit on the same assets and rinse-repeat this.

So when does this stop working?

Simple - when the price of $SLND token falls to a point where the rewards no longer subsidize borrowing (about -50% from today) OR the platform decides to stop the incentivation as they have accumulated enough TVL.

Risks you need to be aware of:
- every platform mentioned above carries smart contract risk. Your assets can be hacked and you lose everything
- a rapid decline in SLND price coupled with an unability for whatever reason to unwind the positions

- unstaking of mSOL&scnSOL is tied to liquidity in SOL/stakedtoken, which is not covering 100% of assets supplied, ie there could be a run so you'd have to wait the 7 days or so for actual unstaking of SOL
- Interest rate changes between the platforms
- $SLND reward lock monthly

None of this is advice. It is just a small excursion into the power of #DeFi to illustrate what it can do. Remember, the platform (@solendprotocol) is essentially rewarding you with their governance token, so it is as if your bank paid you with their stock for borrowing with them

Obviously that can dilute the value of their stock, but the $SLND token is limited to 100m token. So as long as that number does not increase (in the case of a bank stock, they'd just to a capital increase), there is no actual dilution.

The fully-diluted market cap of $SLND itself right now is about $400m. A common way to value this is to compare it to TVL ($1bn) and this does not stick out as paticularly overvalued vs other protocols on a fully-diluted basis. So there is some hope the token would retain value.

Again: this is not advice. I can miss risks in these writeups and I am by no means saying you should do any of this. It also means you remain fully exposed to any price changes in the $SOL token itself. Still, maybe it is useful.

Should probably add 2 things:
- there is a limit to this (its not “endless” as you can only borrow 80% each step)
- there is risk of liquidation if prices of mSOL & scnSOL diverge strongly (ie go down 15% more) from SOL. Unlikely but possible

Last but not least, I use 10% of my SOL this way. There are way too many risks for me to do it with more, but it is still very worthwhile. Assuming the rest is staked it brings annual yield to c 12%. Not advice.