Yield Farmers and Aggregators

At Levf Finance we take this one step further, by offering farmers a big 20x leverage on their investment capital for their exploits on aggregators, which will drastically increase the all-important APY figure that theirs eyes are fixed on.

Yield Farmers and Aggregators

According to a CoinGecko survey, a lot of Yield Farmers

a) do not understand the smart contracts underpinning the protocols they invested,

b) have to pay increasingly high gas fees while chasing for the highest yield across different platforms,

c) and have difficulty coming up with the optimal strategy given the emergence of new platforms, projects and trends on a regular basis.

In light of this, Yield Aggregators such as Yearn.finance have emerged that offer optimizations through batch transactions and automated yield farming in a decentralized manner. Increasing amounts of value are locked up indirectly through such yield aggregators, as this makes it easier, more convenient, and cheaper for the average farmer.

At Levf Finance we take this one step further, by offering farmers a big 20x leverage on their investment capital for their exploits on aggregators, which will drastically increase the all-important APY figure that theirs eyes are fixed on.

Leveraged Yield Farming on Levf

Yield farmer first checks the current utilisation level of the Liquidity Pool and ascertains the interest rate applicable. (interest rate varies according to Treasury Pool utilisation level, see next section LEVF – INTEREST RATE MODEL)

He deposits, let’s say, 1,000 DAI into Yearn-DAI vault 20x program (on Levf platform) and his deposit of 1,000 DAI will generate a 20,000 position in Yearn-DAI vault (on Yearn.finance) automatically.

When farmer closes the position, the resulting investment will be pulled out from Yearn. All proceed (less interest payable to Liquidity Provider, gas fees and Tax*) will be returned to farmer.

Levf platform will impose a Tax* of 10% on net profit generated. This amount shall be held in the Reserve Pool.

As of now, the platform imposes a maximum 365 days period on all leveraged positions. Yield Farmers may voluntarily close their positions at any time before this mark.

Numerical example

Let’s assume that the 20,000 DAI program generates a 15% return (on Yearn) and the 19,000 DAI borrowed has an interest rate of 10%.

On closing of position, a total of 23,000 DAI is received from Yearn. (20,000 capital and 3,000 from the 15% return)

Farmer gets a gross profit of 3,000 DAI for the transaction. (after returning 19,000 to Treasury Pool and disregarding his own 1,000 Capital)

The interest incurred is 1,900 DAI (based on 10% interest on 19,000). Hence his profit after interest is 1,100.

Platform will further impose a 110 DAI tax (10% of profit after interest, not to be confused with interest rate), which will be sent to Reserve Pool.

Farmer will finally receive a net 990 DAI before gas fees, achieving 99% APY (based on his own investment of 1,000)

Without Levf’s 20x leverage, his 1,000 DAI will only earn 150 DAI (using the same 15% APY based on Yearn’s return)

An Ethereum based protocol that bridges the risk limitations and the capital limitations of DeFi participants, creating additional opportunities for both.