How to use Larix for risk-free yield farming?
Have you ever wondered how to improve your yield farming earnings while reducing the risk you are taking?
Today, you’ll be introduced to how to use Larix for risk-free yield farming. It basically involves looping your assets to take advantage of Larix’s high supply APRs and low borrow APRs.
Larix doesn’t charge any borrow fees, this means you don’t pay any additional fees for every transaction, which is a huge plus when it comes to loop yield farming.
We’ve used two examples to demonstrate how this is done. (Video tutorials are attached)
Example one : Stable-coin loop farming
Video Tutorial: https://www.youtube.com/watch?v=kMzPAskmWCI
Using UST and USDT as examples, currently with the highest supply APR and lowest borrow APR respectively.
Step 1: Deposit UST (wormhole) in Larix (https://projectlarix.com/). Current supply APR for UST is 32.46%.
Step 2: Collateralize UST, and borrow USDT (Current borrow APR is negative, at -3.32%)
Step 3: Exchange USDT into UST (wormhole) at Jupiter (https://jup.ag)
Step 4: Repeat the process of depositing UST, borrowing USDT, and exchange USDT to UST.
Final result: The return is at least doubled than simply depositing UST. (Net APR is 57.43% after just one loop)
Example two : $SOL loop farming
Video Tutorial: https://www.youtube.com/watch?v=_CK6c723Z6U
Step 1: Stake SOL at Lido (https://lido.fi/solana) to get stSOL.
Step 2: Deposit stSOL in Larix (https://projectlarix.com/). Current supply APR for stSOL is 11.8%.
Step 3: Collateralize stSOL, and borrow mSOL. ( Current borrow APR is negative, at -12.60%)
Step 4: Exchange mSOL to stSOL at Jupiter (https://jup.ag).
Step 5: Repeat the process of depositing stSOL, borrowing mSOL and exchanging mSOL to stSOL.
The final result is 10x return than simply depositing stSOL.
Most importantly, risk free!