Just came across an interesting LP on @loop_finance.
$aUST / $UST LP.
Now, you must be thinking: "Wut? How is that interesting?"
/1
$aUST / $UST LP.
Now, you must be thinking: "Wut? How is that interesting?"
/1
Let's start from the top.
$aUST is simply $UST deposited into @anchor_protocol Earn - earning 19.5% APY vs holding $UST in your wallet.
In the pool, we have half of our position in $aUST, effectively earning 9.75% APY.
That's not all though...
/2
$aUST is simply $UST deposited into @anchor_protocol Earn - earning 19.5% APY vs holding $UST in your wallet.
In the pool, we have half of our position in $aUST, effectively earning 9.75% APY.
That's not all though...
/2
People actively trade against the $aUST / $UST pool, which means it accumulates trading fees.
As per @coinhall_org, the 7-day-average gives extra 1.10%:
We're at 10.85% yearly ynow.
Not much, but it's something.
We're at 10.85% yearly yield now.
/3
As per @coinhall_org, the 7-day-average gives extra 1.10%:
We're at 10.85% yearly ynow.
Not much, but it's something.
We're at 10.85% yearly yield now.
/3
Additionally, @loop_finance provides LP incentives on top of that - currently sitting at 21.76%.
For the total of 33.66%. On what is pretty much $UST.
It beats the somewhat famous $bPsiDP-24m strategy with $PSI pylon pool and @SpecProtocol auto-compounding (32.41% APY).
/4
For the total of 33.66%. On what is pretty much $UST.
It beats the somewhat famous $bPsiDP-24m strategy with $PSI pylon pool and @SpecProtocol auto-compounding (32.41% APY).
/4
So if you want a stablecoin farm with above-Anchor-Earn APY, that might be it.
There are some risks involved though, which I would like to mention:
/5
There are some risks involved though, which I would like to mention:
/5
$aUST / $UST is a liquidity pool, so technically there is a risk that you will suffer impermanent loss.
In practice, since @anchor_protocol allows for swapping back and forth at a constant (and increasing) rate, any bigger deviations will be consumed by arbitrageurs.
/6
In practice, since @anchor_protocol allows for swapping back and forth at a constant (and increasing) rate, any bigger deviations will be consumed by arbitrageurs.
/6
As well, trading fees are just a 7-day average extrapolated to a whole year.
While 1.10% has very limited downside potential, I can't really see too many reasons for people to trade against this pair. The rate will almost always be better on ⚓, so upside is limited too.
/7
While 1.10% has very limited downside potential, I can't really see too many reasons for people to trade against this pair. The rate will almost always be better on ⚓, so upside is limited too.
/7
@loop_finance LP has a constant incentives of 25k $LOOP per day. This means:
Pool TVL↗ -> APR↘
Pool TVL↘ -> APR↗
$LOOP price↗ -> APR↗
$LOOP price↘ -> APR↘
/8
Pool TVL↗ -> APR↘
Pool TVL↘ -> APR↗
$LOOP price↗ -> APR↗
$LOOP price↘ -> APR↘
/8
Last but not least - you need to stay in the LP for at least 2 weeks to get any $LOOP rewards. and enjoy ~33% APR.
The clock is reset as well every time you add to the LP.
Without those rewards, you are back to ~11% and better of just sticking to Anchor Earn.
/9-end
The clock is reset as well every time you add to the LP.
Without those rewards, you are back to ~11% and better of just sticking to Anchor Earn.
/9-end
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