Thread by @Kord_Fi

So why is Farming with Kord.Fi on #tezos by borrowing #tzBTC so attractive now and why you should give it a try? A thread:

Liquidity baking on tezos is already a pretty good deal in itself but with Kord.Fi you can also borrow additional assets to add leverage to your positions.
We allow the borrowing of both #tzBTC (#Bitcoin wrapper for #tezos blockchain) and #tezos.

As mentioned above, #tzBTC is a one to one version of #BTC that is issued on the #Tezos blockchain and backed by actual #BTC.
By borrowing tzBTC and adding it to the liquidity pool, Liquidity Bakers (Farmers) can substantially increase their potential returns from LB activity!

However, adding leverage also increases the risks.
Mainly, the Liquidation risk, which occurs when the value of the borrowed assets drops too low and the Farm collateral value is no longer sufficient to cover the borrowed amount.

So when making a decision about which asset to borrow and at what leverage you need to evaluate the risks and benefits and take the factors above into account!
And now we come back to our present situation!😋😎

See, Investing in #Tezos and #tzBTC Farm (liquidity baking) while borrowing tzBTC is essentially similar to being long Tezos if you are doing it at 2x Leverage, cause the net position (as borrowed #tzBTC and one inside the Farm cancel each other) is just Tezos! 😊

Now if you are borrowing on Kord.Fi with 4x Leverage your borrowed tzBTC value greatly exceeds the amount of it inside the Farm and you are now essentially long not Tezos but Tez/tzBTC pair (as you are additionally short tzBTC on top of being long #tezos)!

So right now with attractive #tzBTC borrowing rates at Kord.Fi we recommend Farming while borrowing at 2x leverage if you are relatively risk-averse and moderately bullish #tez (this gives around 25% yields)😍😍

And you can opt for 4x Leverage if you can take the heat and strongly believe that tez outperforms #BTC (and #tzBTC as a consequence), since this way your risks don’t materialize while you collect 45% LB yields! 🤩🤩🤩

How does this work in practice? Well, first, you go to kord.fi and connect the Wallet (we support all major Tezos wallet types like Atomex, Kukai, Umami and others). The button is in the top right corner of the screen on our website

Then, once you have successfully connected your wallet to you can got to kord.fi/farm and open up a Farm! You have two options presented: fund it with #tezos (left) and #tzBTC (right)

Since we are discussing the #tzBTC funded Farms your choice is on the right. For both cases though the mechanism works similarly: you take some #tezos from your wallet and add either borrowed #tezos or #tzBTC from Kord.Fi Deposit pool to gain leverage!

When opening a Farm apart from chosing which asset to borrow in you need to make two decisions:
1.How much of your own #tezos you are putin into Farm
2.What is the leverage size for it (starting from zero up to 4x)

Let’s look at the 2x leverage: in this case you put an amount of #tezos (say 200 tez like in the example attached) and puting the leverage slider to 2. The Farm will be opened with #tzBTC amount borrowed equal to #tez you put in (hence the Farm size is 2x your #tez contribution!)

Notice how in the right corner above the slider we have the APY (Farm returns) available for you! These are calculated based on Liquidity Baking rewards, used leverage, and interest rate on deposits. And don’t take into account the impact of the so-called impermanent loss.

At 4x Leverage the procedure looks pretty much the same as for the case of 2x Leverage but with the difference being that your APY is higher, as your are borrowing 3 times the #tezos amount you have put in (and the Farm size is thus 4x the #tez size).

Invest responsively and feel free to ask more questions! Here is the link to our Discord Channel btw: discord.gg/KadcvVHX