Strategy 1: Borrow to Farm - Stablecoins
0xFC4d
June 23rd, 2022

Stablecoins on BENQI: USDT.e, USDT, USDC, and USDC.e

Strategy Steps:

1. Deposit 10,000 USDT.e on BENQI. Supply APY:8.48%

2. Borrow $5000 AVAX on BENQI (LTV: 50%). Borrow Interest: 5.17%

3. Deposit AVAX in Vector for yield farming. APY: 17.4%

4. Use CIAN’s automation primitives to protect your position and optimize the capital efficiency. ( 50% target collateral ratio suggested)

Total APY of 10,000 UST.e:

The final APY for this strategy is of 14.5%. This number will change due to market conditions.

Tutorial:

  • Build a “Borrow to Farm” position:

1. Select BENQI as the lending platform. Deposit USDT.e and Borrow AVAX. Enter the number of USDT.e and borrowed AVAX. Make sure the LTV is around 50%.

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

2. Select Vector’s wAVAX pool for yield farming and execute this position.

  • Use “Auto Borrow” to increase capital efficiency:

1. Choose your two positions on BENQI and Vector.

2. Set “Target Collateral Ratio” to 50%, “Auto Borrow Limit” to 40%, and “Duration” to 12H. Then submit this task.

  • Use “Auto Repay” to prevent liquidation.

1. Choose your two positions on BENQI and Vector.

2. Set “Target collateral ratio” to 50%, and “Auto repay threshold” to 60%. Enable “fully automatic”. Then submit this task.

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

1. Select your lending position on BENQI. Set the “triggering collateral ratio” to 65% and the “target collateral ratio” to 50%. Then submit this task.

Now you can enjoy a 14.5% APY with your USDT.e on CIAN.

Risks / Fees:

1. Smart contract vulnerability

This strategy interact with three protocols: BENQI, VECTOR and CIAN. If one of these protocols was to get targeted by an exploit, it may results in loss of funds.

2. Liquidation

CIAN’s “Auto Repay” and “Flash Repay” can protect users lending position from liquidation under most market conditions. However, CIAN’s automation primitives couldn't protect users’ position in case of 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.

4. Deposit fee and withdraw fee on Vector

Since Vector is mainly using PLATYPUS’ pools, a 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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