Thread by @shivsakhuja

You asked for a thread on 62% on stablecoins using leveraged LP farming with @TarotFinance...

Well, it's at 75% at the time of writing, for the same amount of leverage! 🤑

Here's how you can use a leveraged LP strategy 👇 👻

1/

First things first - make sure you understand how leverage works.

See this thread.

Btw, the graphic has a mistake in it on the risk side -- sorry about that! 😬

I uploaded the correct one in the comments!

https://twitter.com/shivsakhuja/status/1476283069753540608?s=20

2/

TL;DR - Leverage is a financial tool to amplify your returns while taking on more risk..

If you want to understand how a LP / AMM works in general, see this thread:

https://twitter.com/shivsakhuja/status/1473794498081689601?s=20

3/ Now, for a leveraged LP strategy:

$fUSDT and $USDC are both stablecoins – so they should (ideally) always be the same price.

When you provide liquidity to a stable pair like this, you don't have impermanent loss risk.

& since these are stables, there's no price risk either.

4/

Because these risks are greatly mitigated, you might feel safer taking on more leverage.

This is where @TarotFinance comes in with its leveraged liquidity pools.

Essentially, you're borrowing more tokens and providing liquidity with these borrowed tokens.

5/

Luckily for us, @TarotFinance does all the hard math to calculate:

- the APR of the pool with our desired amount of leverage

- liquidation prices

6/

How to use @TarotFinance:

1. Convert some FTM to equal parts USDC and fUSDT

2. Now provide liquidity for the USDC - fUSDT pair on @SpookySwap

3. Go to tarot.to

4. Find the $USDC / $fUSDT pool (SpookySwap)

5. Deposit your LP tokens

6. Click leverage

7/

7. Move the slider to select how much leverage you want to take.

At ~10.2x, the liquidation price is ~$0.73 - $1.36.

8. You'll have to "Approve" the tokens, and then click Leverage.

9. Done! At any point, you can reduce your leverage, by clicking the "Deleverage" button.

8/

You can go full degen if you want with > 14x leverage if you want to juice up the APR even more.

The liquidation price at that level is ~$0.90 - $1.10.

That's not terrible, but it's a lot easier to get liquidated at those levels, than at 10x leverage..

9/

One thing to keep in mind: this liquidity pool is ridiculously small - only a few hundred thousand $.

This means that the APR can change drastically when $ flows in / out, especially for large positions.

So make sure to monitor it.

10/

My goal with this thread is to inform you of how to use a leveraged LP using @TarotFinance - not recommending this pool specifically.

11/

Now, if you want to actually understand how providing liquidity to stable pairs works, and the risks involved, see this thread

https://twitter.com/shivsakhuja/status/1466384167499808768?s=20

12/
You can also use @TarotFinance to provide leveraged liquidity to other pairs in the #fantom ecosystem like:

- $FTM - $BOO

- $BTC - $ETH

- $FTM - $USDC

These pools are larger, and some have pretty juicy APRs (especially if you use leverage)

13/ If you liked this thread, RT / follow - help a fellow farmer! 👨‍🌾

I write about #DeFi strategies, concepts and projects everyday..

Here are my previous threads on #DeFi:

https://twitter.com/shivsakhuja/status/1470898910218440708?s=20