CreDA leveraged farming
Last updated
Last updated
Leveraged yield farming is a mechanism that allows farmers to lever up their yield farming position, meaning to borrow external liquidity and add to their liquidity to yield farm. As a result of having more liquidity to yield farm, leveraged yield farmers gain more rewards in Token A and a larger share of the trading fees than otherwise possible. Unlike most traditional lending platforms, leveraged yield farming allows for undercollateralized loans. This higher capital efficiency means not only higher APYs for farmers but also lenders, as a result of this undercollateralized model creating higher utilization rates, which are a major factor in lending APYs within most lending platforms.
Yield farming is a process in which users (or farmers) receive additional incentives (typically in the form of another token) for providing liquidity to a liquidity pool on a certain AMM protocol, such as SushiSwap in this case.
For instance, if you were to provide liquidity of 1 AETH and 3,300 USDT (assuming 1 AETH = 3,300 USDT) to a AETH - USDT liquidity pool on SushiSwap, then you will receive rewards in another token (e.g. 10 Token A) in addition to a share of trading fees that the protocol gains (e.g. 10% APY), which you would normally receive for being a liquidity provider on any AMM.
Sushiswap ETH/USDT Pool
Sushiswap ETH/USDC Pool
Sushiswap ETH/DAI Pool
Click on “FARM” and there are two ways to stake (toggle menu):
Credit Account (requirement: Credit Score >500)
Wallet Account
You can choose the proportion to stake and you can choose different leverage levels for staking.
Some explanation on example above: A = base Trading Fee APR =51.49% B = base Sushi Reward APR = 5.23% C = base Borrow interest APR = -18.98%
Trading Fees APR (7-day avg.)
51.49%
77.23%
102.98%
128.73%
154.47%
Sushi Rewards APR
5.23%
7.85%
10.46%
13.08%
15.68%
Borrowing Interest APR
0.00%
-9.49%
-18.98%
-28.47%
-37.96%
TOTAL
56.72%
75.59%
94.46%
113.34%
132.19%
1X
A + B
1.5X
A*1.5 + B*1.5 + C*0.5
2X
A*2 + B*2 + C
2.5X
A*2.5 + B*2.5 + C*1.5
3X
A*3 + B*3 + C*2
Click on "APPROVE"
Input your AETH and USDT amount and select desired LEVERAGE level.
Once you are OK, confirm the selected Leverage level.
When you complete and STAKE your position will appear in the “Credit Position”.
You can manage all your pools that have borrowed successfully in farming from “Your Positions”.
Close: When you close this pool, we will auto-return the ETH you borrowed and your rewards.
Remove: Select the percentage of loans you want to remove from the pool.
Add: Provides more ETH of USDT for the pool.
Harvest: When you click “Harvest” you can get FILDA or SUSHI rewards.
Leveraged positions (more than 1x) are subject to liquidation when Debt Ratio>=100%. When positions are at 100% debt ratio, liquidators can liquidate these positions by repaying the debt (any amount) and earn 100% of the debt amount liquidator repaid + additional depends on the debt asset and the yield farming/liquidity providing pool.
For stablecoins (DAI, USDT, USDC), liquidation bounty can reach up to~3% of the debt amount the liquidator repaid.
Head to All Positions page and click liquidate on the position that is subject to liquidation risk.
Select which token the liquidator wants to repay and enter any amount to liquidate. (Liquidators don’t have to repay the full debt amount)
Liquidators will earn 100% of the debt amount repaid + additional bounty amount back in a form of LP token.
For instance, if liquidators liquidate 10 ETH by repaying 10 ETH, liquidators will get LP tokens back in a value equivalent to 10.25 ETH.
