Leverage Farming (StonFi & DeDust)
How You Can Earn up to high APR with Borrowed Liquidity on DeDust with EVAA
Are you looking for ways to make your crypto holdings work harder for you?
If you’re holding USDt or TON, I've got some exciting news that could significantly enhance your investment strategy. DeDust and StonFi often offer a compelling opportunity with its TON/USDT liquidity pool, boasting an annual percentage rate.
Here’s a straightforward guide on how you can start earning today!
What is DeDust & StonFi?
DeDust and StonFi are DeFi platforms that operate on The Open Network. They function as Automated Market Makers (AMMs), enabling users to swap tokens, provide liquidity, and earn returns through transaction fees within the platform.
Why Liquidity Provision?
Liquidity providers are the unsung heroes of the DeFi ecosystem. By supplying assets to liquidity pools like TON/USDT on DeDust and StonFi, you help facilitate trading by smoothing out price fluctuations and adding depth to the market.
In return, you collect transaction fees generated from the trades executed in the pool, which can add up to a substantial income thanks to the pool's high APR.
Getting Started with Liquidity Provision
Step 1: Choose Your Strategy
Whether you’re a staunch TON maxi or a USDt whale, entering liquidity provision doesn’t require relinquishing your preferred asset.
Here’s how you can strategically use your holdings and effectively manage the associated risks:
USDt Holders: Use a portion of your USDt to borrow TON through the Evaa Protocol. This maintains a balanced exposure to both currencies in the liquidity pool. By doing so, you hedge against the price volatility of TON. For instance, if you supply $10,000 USDt and borrow 1,000 TON when TON is at $5, you have a balanced leverage of 50%.
TON Holders: Conversely, if TON is your asset of choice, deposit TON and borrow USDt to achieve a similar balance in the liquidity pool. Liquidation risks now are to the downside, meaning if TON’s price drops, you might get liquidated (again because the TON collateral you supplied may not be enough to cover your USDt loan).
When you engage in both lending and borrowing within a lending protocol, the difference between the interest you earn on lent assets and the interest you pay on borrowed assets results in your net APY. For instance, if you're earning 10% APY from lending but paying 12% APY on borrowed funds, your net APY would be -2%, indicating a net loss from these activities.
Step 2: Supply and Borrow on Evaa
Connect wallet to the EVAA and deposit your chosen asset.
Borrow the counterpart asset (USDt if you supplied TON and vice versa), but ensure to keep within a safe borrowing limit (65%) to prevent risks related to price volatility.
Step 3: Provide Your Assets to the Liquidity Pools
1) Once you have both TON and USDT - navigate to the TON/USDT pool on your favourite DEX:
This page displays key statistics about the pool, including the total liquidity, volume (24h), fees (24h), and the Annual Percentage Rate (APR). It shows the amounts of TON and USDT in the pool and the overall pool value.
2) Connect your wallet by clicking the 'Connect Wallet' button to interact with the pool.
This section will change once your wallet is connected, showing your current position in the pool.
3) Enter the amount of TON and USDT you wish to deposit into the prefered pool.
The input fields are allowing you to specify exactly how much of each asset you want to deposit. The system will calculate the corresponding amount of the second asset based on current pool ratios.
4) After entering the desired amounts, click ‘Deposit’ to finalize the addition of your assets to the pool.
This step ensures that all details are correct before you commit your assets, providing an opportunity to review and confirm the transaction to avoid mistakes. Back, you’ll receive liquidity provider (LP) tokens, symbolizing your stake in the pool. These tokens are your ticket to earning a share of the transaction fees.
Enjoy your journey into TON DeFi with EVAA and DeDust! Please remember, all investments carry risks and the decisions you make are your own responsibility.
Proceed wisely and good luck!
Last updated
