Strategy 3: Borrow to Farm - other assets
0xFC4d
July 1st, 2022

High volatility assets: LINK.e, and QI

Strategy Steps (Taking LINK.e as an example):

  1. Deposit 1000 LINK.e on BENQI. Supply APY: 2.37%. The collateral factor of LINK.e is 67.5%.
  2. Borrow $3391.875 AVAX on BENQI (LTV: 50.625%). Borrow Interest: 4.48%
  3. Deposit AVAX in Vector for yield farming. APY: 18.0%
  4. Use CIAN’s automation primitives to protect your position and optimize your capital efficiency. (The suggested target collateral ratio is: 75% collateral factor)

Total APY of 1000 LINK.e:

The final APY for this strategy is 9.2145%. The total APY is subject to change due to market conditions.

Tutorial

  • **How to build a “Borrow to Farm” position:
    **1. Select BENQI as the lending platform. Deposit LINK.e* and Borrow AVAX**. Enter the desired amount of LINK.e and borrowed AVAX. Make sure the LTV(D/C) is around 50.625%.

*(For the sake of this example, we will use LINK.e, that said, users are free to select any other listed assets as collateral)
**(We strongly suggest AVAX for the borrowed/farming asset owing to the current APY%)

2. Select Vector’s AVAX pool. Execute the position.

  • Use “Auto Borrow” to increase your capital efficiency:

    1. Drag and drop your Loan (BENQI) and Farm position (Vector).

2. Set the “Target Collateral Ratio” to 50.625%, “Auto Borrow Limit” to 45%, and “Duration” to 12H, “Max Deposited” no maximum, and “Automation Level” to fully automatic. Then, submit the task.

  • Use “Auto Repay” to prevent liquidation.

    1. Choose your two positions on BENQI and Vector.

2. Set “Target collateral ratio” to 50.625%, “Auto repay threshold” to 57.5%, and enable “fully automatic”. Then, submit the task.

  • Use “Flash Repay” to prevent liquidation under extreme market conditions.

1. Select your lending position on BENQI. Set the “triggering collateral ratio” to 62% and the “target collateral ratio” to 50.625%. Then, submit the task.

Enjoy 9.2145% APY with your LINK.e on CIAN.

Risks/Fees:

1. **Smart contract vulnerability
**This strategy interacts with three protocols: BENQI, VECTOR, and CIAN. If one of these protocols was to get targeted by an exploit, it may result in a loss of funds.

2. **Liquidation
**CIAN’s “Auto Repay” and “Flash Repay” can protect users’ lending positions from liquidation under most market conditions. However, CIAN’s automation primitives couldn't protect users’ position in case of an extreme market crash (eg. LUNA).

3. **Collateral reduction
**If “Flash Repay” is executed at the triggering collateral ratio, though your position would avoid getting liquidated, part of your collateral would be transferred to your borrowed assets to reset the TVL.

**Deposit fee and withdraw fee on Vector
**Since Vector is mainly using PLATYPUS’ pools, deposit fees and withdraw fees may apply depending on the Coverage Ratio. Learn more: https://docs.platypus.finance/platypus-finance-docs/concepts/deposit-fee

Useful links

Discord: https://discord.com/invite/CIAN

Website: https://cian.app

Medium: https://cian-app.medium.com/

Docs: https://docs.cian.app/

Twitter: https://twitter.com/cian_protocol

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