🔄Leverage Yield Loops

Looping allows users to enhance their exposure to yield-bearing assets by borrowing the underlying asset. For example, users can increase their exposure to stAPT by borrowing APT. Efficiency mode enables higher loan-to-value (LTV) ratios between assets pegged in price, allowing for greater leverage. In a stAPT/APT loop, stAPT is supplied and APT is borrowed, then looped to achieve a target leverage amount. Typically, these assets have a 75% LTV, enabling up to 4x leverage. However, with efficiency mode, the LTV can increase to 90%, allowing for up to 10x leverage.

Each action within the loop uses flash loans, which do not incur fees. Users pay the borrow APY on the debt asset in their position, which is already factored into the Net APY. Additionally, Multiply transactions may incur slippage costs from swaps via LiquidSwap. Multiply Example

Let's say a user has 1000 APT and deposits it into a stAPT/APT loop with an 5x multiplier.

Given:

• stAPT/APT price ratio: 1.05

• stAPT APY: 9%

• APT borrow rate: 6%

User's Position:

• Initial Deposit: 1000 APT

• Leverage Multiplier: 5x

Calculating Collateral and Debt:

• Total APT Exposure: 1000 APT * 5 = 5000 APT

• Equivalent stAPT: 5000 APT / 1.05 ≈ 4762 stAPT

• Total Debt: 5000 APT (Exposure) - 1000 APT (Initial Deposit) = 4000 APT

• Loan-to-Value Ratio (LTV): 4000 APT / 5000 APT = 80%

Calculating Earnings and Costs:

• Earnings from Staking (stAPT APY): 4762 stAPT * 9% ≈ 428 APT

• Borrowing Costs (APT Borrow Rate): 4000 APT * 6% = 240 APT

Net Earnings:

• Net APT Earned: 428 APT (Earnings) - 240 APT (Borrow Costs) ≈ 188.57 APT

• Net APY: 188.57 APT (Net Earnings) / 1000 APT (Initial Deposit) ≈ 18.86%