Thread by @Alpha_HomoraV2

1/
Currently, the crypto market seems to be neither bearish nor bullish: A sideway market.

A situation where overall volatility of crypto assets won't swing too radically. What can we do?

Here's how you can turn this crisis into an opportunity with #HomoraV2 🧵

2/
Pseudo Delta-neutral Strategy

AKA delta-hedging: is where you balance out your risk exposure by opening long + short positions to minimize impact from price changes.

Now you know how to use #HomoraV2 to short, you can apply delta-neutral strategies too.

Lets look at how:

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Easy way to think about how to apply delta-neutral strategy for A/B coin pool with 3X leverage:

1. Split your initial capital for farming to 25% & 75%

2. Open position with 25% of capital to borrow asset A

3. Open 2nd position with 75% of capital to borrow asset B

How?

4/
Say we farm with $1000 USDC, 3X leverage.

1. Supply $250 of USDC, borrow $500 of USDC = $375 AVAX LONG exposure

2. Supply $750 of USDC, borrow $1,500 of AVAX = $375 AVAX SHORT exposure

3. Total exposure: +$375 + -$375 = 0

Don't forget: you earn APYs from both positions.

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5/
What happened?

1. Total position = $750 USDC -> 50% is converted to AVAX. Similar to buying AVAX.

2. $1500 AVAX -> $375 worth of AVAX is converted to USDC. Similar to shorting AVAX.

This makes exposure (close to) neutral when opening both positions at the same time.

6/
Simple. Of course, this example is simplified with low price fluctuation.

Regardless of which direction the price changes, your yield farming rewards > the risks

If price changes a lot, you can easily rebalance your position on #HomoraV2 by adding/removing collateral.

7/
That's it!

If it's too hard, there's a lot of resources out there on strategies explanations or detailed calculations. For e.g, one from @phtevenstrong.

#HomoraV2 is merely a tool for helping you earn higher rewards. But always DYOR to know the risks!

@phtevenstrong 👍 If you like our content, feel free to LIKE, RETWEET, & SHARE with your friends or peers.

If you are ready to make some beefy yields, let's head to our DApp: homora-v2.alphaventuredao.io

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