Experiment α(2): Benqi AVAX self-loan to Anchor

Experiment α(2):

We have @anchor_protocol humming along.
We have @BenqiFinance on Avalanche humming along.

Let's loan myself $AVAX from @BenqiFinance to @anchor_protocol and see how long it takes the $ANC yields to pay-down the loan.

We will 'create' $AVAX from $ANC here.

To self-loan $AVAX, I need $AVAX.

I have 9.9 $sAVAX, so I'll swap that for $AVAX on @pangolindex (edging out @traderjoe_xyz at the moment).

So, now I have $AVAX. Before I loan myself $AVAX, I'll establish 2 new δneutral positions on @BenqiFinance, before finally loaning myself the borrowed $AVAX.

Why?

Because: LEVERAGED yields, folks. Or, as I call it:

Yields using Other People's Money.

Don't mind if I do. 😎

So, step 1: 

we fund our @BenqiFinance market ("Be your own bank") by supplying $AVAX.

Step 2: we go to the @BenqiFinance 'overview'-tab to see which are the viable δneutral positions.

Besides $AVAX, itself, $USDC (NOT: $USDC.e) and $WETH.e are net-positive yields (in $QI) on both supply and borrow sides.

Step 3: we establish our δneutral positions.

Let's start with $USDC, as it collateralizes at 80%.

We BORROW $USDC – I'm borrowing at 70% – 

then we immediately SUPPLY all of that borrowed $USDC.

Thus, we establish our $USDC δneutral position: our supply covers our borrow.

I do the same thing to establish the $WETH.e δneutral position:

BORROW $WETH.e,

then immediately SUPPLY that borrowed $WETH.e 

Now that I have my diversified δneutral positions establish, I'll borrow $AVAX to self-fund my @anchor_protocol position over on Terra Classic (which we'll get to, eventually).

Please note the net APY: 3.34%.

You may be grumbling right now, saying two things:

1. "Net 3.34% APY???" and
2. "You started with 10 $AVAX and now only have 1.4 $AVAX? How are either good things?"

Good questions! Let's address both concerns.

We started with 10 $AVAX (~ $250); now we have 1.4 $AVAX.

But, look at the @BenqiFinance market I've established for myself:

$460.35 supply-side

$236.61 borrow-side

earning a NET 3.3% interest.

I started with $250, I'm earning interest on ~$700.

This is LEVERAGED yielding.

Not only is this LEVERAGED yielding (and I'm yielding on ~$450 of Other People's Money!), but it's relatively SAFE leveraged yielding.

• As the markets go up, the supply goes up, covering the increased borrow value.
• Same for as the markets go down.

(relatively) SAFE, CAPITAL-PRESERVING LEVERAGED YIELDING.

This is the beauty of what δneutral yield-farming is.

So, δneutral has all those advantages (safe, capital-preserving, leveraged), but it's not going to get you anywhere quickly.

Let's get somewhere quickly, ... on the Terra Classic blockchain.

To get there we need to bridge our 1.4 $AVAX there.

But we can't. I don't see how to bridge $sAVAX anymore, either. Bummer.

But we can bridge valueless (?) $UST.

Not so valueless, anymore, eh?

First we swap the $AVAX for $UST.

Then we bridge the $UST over to Terra Classic using https://classic-bridge.terra.money/...

... after a moment, we see the funds on Terra Classic. YAY! 

I just loaned myself some money.

I need to track the loan and the repay.

Do you know what that means?

SPREADSHEETSZORXEN!

Yeup.

I just created my "Anchor Self-funding Experiment"-spreadsheet. 

So now I want to convert my $UST to $sAVAX.

It turns out I don't want to do that, after all. The price impact on @astroport_fi is 10% for that swap. But I can swap to a different, viable, collateral:

SWAP 2120.32 $UST -> 0.021129 $bETH

And now we provide that $bETH as collateral.

Hm. Only a ~30 $UST borrow gain. Oof.

But what just happened?

I converted (indirectly) my $AVAX to (bonded) $ETH, increasing my $ETH supply from 0.49 to 0.51.

I'm 'creating' $ETH from $AVAX now, folks. 

el geophf, wizard. 😎

To finish up:

• I BORROW 16 $UST on @anchor_protocol,

• then I immediately SUPPLY that 16 $UST on the EARN-side

Earning ~2100% $ANC yields and a net 11% $UST yields.

Sweet!

As I earn the $ANC yields, I'll repay my $AVAX self-loan (but that's for another day).

The. End.