Leveraged Yield Farming
Introduction to Leveraged Yield Farming
Last updated
Introduction to Leveraged Yield Farming
Last updated
DeFi users are chasing higher investment returns from platform to platform and from network to network. Undoubtedly, leveraged yield farming is one of the most popular choices used by experienced DeFi users to maximize their profits.
Yield farming grants users additional incentives for providing liquidity to a liquidity pool. Meanwhile, leveraged yield farming is a mechanism that allows users to ramp up their yield farming position by borrowing funds in order to multiply their yields. In other words, you borrow funds so you can invest more, and, as a result, to earn more. But of course, you have to pay borrowing interests for the extra capital.
In addition, different from most of the traditional lending platforms, leveraged yield farming allows users to borrow under-collateralized loans, which establishes higher capital efficiency for yield farmers. Moreover, this might create a higher utilization rate of the lending pool, sometimes hitting more than 90%, which means a higher borrowing interest rate you would need to pay.
If you are new to leveraged yield farming, please read our introductory .
Single Finance is glad to introduce the FIRST innovative token-based view on leveraged yield farming in the industry. “My Farming Positions” is defaulted to show the performance in token amount, which allows users to review their position return in terms of number of tokens rather than USD value. It provides a plain view on the number of tokens being farmed, neglecting the price effect.
In the existing “USD Value” view, users can have an overview of their farming positions in terms of USD, depending on the latest price of the farming token pair, like below:
It shows the leveraged farm is in a net gain position with profit of $10.05, giving a ROI of 5.026%.
On the other hand, the newly added “Token Amount” view shows the position status in terms of both farming tokens. We use the same farming position as quoted previously in the “USD Value” view for illustration. All the profit and loss would be shown in token-based, like below:
The above user supplied 21.69M VVS at $0.00000924 (worth $200.04), together with the debt position borrowing VERSA, to start a leveraged yield farming position in VERSA-VVS pair.
It is observed in the dashboard that the latest Equity is 23.05M VVS or 2,423.64 VERSA and the latest Profit is 1.42M VVS or 199.55 VERSA. As the user supplied VVS at the beginning, one should better focus on VVS. In terms of token amount, the user enjoys a gain of 6.547% on VVS basis, slightly more than the 5.026% ROI in terms of USD value.
To conclude, this new feature can fit users with different focuses.
“Token amount” view is suitable for the DeFi users who aim at knowing how much more tokens they have gained or accumulated, neglecting price effect.
“USD value” view is suitable for the users who care about their return on fiat value more.
Single Finance knows users have different goals and views on yield farming, we respect every thoughts and commit to provide our users unprecedented experience in the next generation yield-farming 2.0.
To switch between “Token Amount” and “USD Value” view, users can simply switch the button in “My Positions” section.
