@CryptoLemon 25 August 2021

What is leveraged Stablecoin farming and how to benefit from it with AlpacaFinance !

Hello HODLers, This is my 2nd article on stablecoin farming. **In my last post, I explained** **Where to earn BIG with your Stablecoins? Up to 47% APY !****.** https://leofinance.io/@vlemon/where-to-earn-big-with-your-stablecoins-up-to-47-apy We covered Venus, Belt and CubFinance protocols. In this post, I will take you to the next level: Leveraged Stablecoin Farming! This is the process to borrow some assets and pool them with your owned assets in order to farm a bigger position and therefore **get a better yield on your owned assets** **Today we will look at AlpacaFinance** AlpacaFinance, the market leader ! I have been leverage farming on AlpacaFinance for a while. I have earned money mostly using the $CAKE 2.5x leverage. https://app.alpacafinance.org/ **The project has $1.7bn in TVL ranking 3rd in the BSC ecosystem.** But today, we are looking into Stablecoins. I have to first do a caveat, if I had done this post a week ago, yields would have been higher. They have come down a lot over the past few days. **Alpacafinance allows you to leverage up to 4x your stablecoins pairs. As you understand, the leveraged pair is not too risky as it is supposed to be between 2 assets c.1$.** It uses PancakeSwap and WaultSwap. So apart from the hack, scam or fud risk; it seems quite safe. One feature that I like very much is that you can mostly choose the assets that you will be borrowing. **As an example, the stablecoin that I like the least is USDT, therefore I always try to borrow this one against my holdings in the other stablecoin.** In case I am right and this is the most sketchy and it goes down, I will not be liquidated and would even earn some capital gains as the $value that I would have to payback is lower than the one I took as loan in the first place. **Decomposing the APR** AlpacaFinance shows: The leveraged Yield Farm APR + The trading fees APR + Alpaca rewards APR Minus Borrowing Interest APR And then gives you a total APR subject to future market changes. **At the moment, I would not open a position in these pairs as the APY% is the lowest I have seen.** I used to have 30-40% APY on these 4x leveraged farms. I used to provide liquidity for USDT-BUSD, I was providing BUSD and borrowing USDT (as I prefer BUSD). The liquidation risk is at 80% meaning that if my asset (BUSD) loses 20% versus USDT, I would be liquidated. This is as you understand, quite unlikely. **AlpacaFinance is also allowing Lending** This is a more classic financial service that is provided by many platforms but looking at the low leveraged farming yield, it is a better option at the moment. 15.5%APY on single BUSD is not so bad right? Especially if you are looking for a small dip coming up. Stay safe out there !