BUIDL'n positions with DOUBLE-leveraging

Growing an asset with ... wait for it:

DOUBLE leverage using minted $USK from @TeamKujira BLUE then @Levana_protocol.

What am I talking about, and how does this work?

First of all, @Levana_protocol has oodles of crypto that you can leverage using (real) $USDC as collateral.

For this example, I'm going to demonstrate with $DOT (actually $axlDOT), but you can use any token that mints $USK on @TeamKujira BLUE.

What's the plan?

1. I mint $USK with $DOT
2. I swap to $USDC on FIN
3. I IBC the $USDC to @osmosiszone via @noble_xyz
4. I supply 50% of the $USDC to the DOT/USDC LP on @Levana_protocol
5. The other 50% of the $USDC I take (or reinforce) a pair of leveraged $DOT positions (LONG and SHORT).

That's the setup to establish a pair of leveraged $DOT positions on @Levana_protocol, funded with $USDC.

Then, I wait and let the markets do their THANG!

• markets go up, I close the long, I take the profit, transfer that back to @TeamKujira and (slowly but surely) burn the $USK-mint.
• markets go down, vice versa (close the short, that is, and profit that way).

Now, what do I do after I close the leveraged position? and why do I only start with half the liquidity in the leveraged positions?

I'll explain both. FIRST, let's walk through what we've already covered, step-by-step, THEN go into my "how to make money with leverage"-strategy.

1. Mint $USK with X on @TeamKujira BLUE.

For this example, my X is $DOT. I mint 200 $USK from 100 $DOT.

2. Buy (real) $USDC with $USK on @TeamKujira FIN

Why? Because @Levana_protocol uses (real) $USDC as collateral, not $USK, sadly.

... huh. Leveraged $USK perpetuals, anyone?

ANYWAY!

tip: this order book is easy to find when you select the 'USDC'-tab on FIN.

I 'zone-hop' the $USDC from @TeamKujira to @osmosiszone via @noble_xyz using IBC.

Why? I could bridge using @squidrouter or Satellite, but the IBC zone-hops are commission-free, and those bridges are using IBC anyway.

Why pay someone else to do something you can do for free?

4. I supply half the $USDC liquidity to the DOT/USDC LP on @Levana_protocol 

Why? One good reason is that it's paying 100% APR.

But that's not why I do this.

Why I do this has to do with my approach to BUIDL'n a 'reasonable' spread of $DOT leveraged positions.

Let me explain.

But before I explain, let's have a working example.

With the remaining $USDC liquidity, I place both a 5xLONG and 5xSHORT for $DOT on @Levana_protocol. 

These positions are around $6.7-per.

Is this a reasonable spot for $DOT?

Kinda yes.

But I'll let my strategy guide me.

Finally, we get to my current approach with leveraged trading that works particularly well on @Levana_protocol, as they allow you to have multiple long and short positions open at the same time (unlike @GMX_IO).

So I have (only)

5xLONG at $6.7; 50 $USDC

5xSHORT at $6.7; 50 $USDC

Attenuating the Extremes

Let's say $DOT goes to $7.  I close the long.

I send the profit back to @TeamKujira to burn the $USK.

Now: I open

5xLONG at $7; 12.5 $USDC

5xSHORT at $7; 37.5 $USDC

WHAAA??? am I doing here?!?!

My philosophy is centrist-...ish with leveraged trading.

I EMPHASIZE the center, so when I open positions at the zenith or nadir, I DEEMPHASIZE those peaks.

My positions are now 

5xLONG at $7; 12.5 $USDC

5xSHORT at $7; 37.5 $USDC

5xSHORT at $6.7; 50 $USDC

What if $DOT goes up forever?

I keep attenuating the zenith, and I eventually lose my bottom short.

You CAN place a stop-loss if you hate the idea of losing that entirely. I hate the idea of quitting a perpetual that would catch a snap-down in price, more.

You do you.

Can $DOT go up 'forever'? SURE CAN!

But that's why I pick crypto I have a pretty good feel for. I mean: $AVAX is my go-to, but even it surprised me by rocketing up from, what? $18-per to the mid-$40s?

There're no sure things here folks, and leverage is RISKY!

But that's why I'm picking $DOT. It was at $4-per for FOREVER! And it has a pacing I have an okay-feel for.

So, I'm thinking $6.7-per is highish.

Let's say $DOT's price settles to $6-per, allowing me to close both 5xSHORT at $7 and $6.7.

I send the profits to @TeamKujira.

With $DOT at $6, we're at the (local) nadir now, but I also have $87.5 to invest. I open

5xSHORT @ $6; 21.875 $USDC

5xLONG @ $6; 65.625 $USDC

Still not touching the liquidity in the LP.

Can $DOT keep going down forever? SURE! And I'll keep attenuating, losing the 12.5 5xLONG.

Note the last statement.

I STARTED with 5xLONG for 50 $USDC and 5xSHORT for 50 $USDC, but the liquidation hit me only at 12.5 $USDC, because I attenuate the extremes.

Does attenuation always work with leverage? HELLZ NAH!

NOTHING ALWAYS works with leverage.

BRING THE PAIN! 😤

BUT!

Has this attenuation of the extremes and emphasizing the middle worked for me?

Recently, yes.

I'm continuing this approach. Please note that this is a work in progress and not tested under all market conditions, so I'll adjust as I learn.

I recommend you do the same.

Okay, I've shown you attenuating the extremes.

Now let's show emphasizing the middle.

Emphasizing the Middle

$DOT price goes up to $6.2, I close the 5xLONG at $6 for 65.625 $USDC, I re-place that LONG and add a SHORT.

My positions are now:

5xSHORT @ $6; 21.875

5xSHORT @ $6.2; 16.406

5xLONG @ $6.2; 49.219

5xLONG at $7; 12.5

Note how the middle is ALREADY emphasized!

Let's say $DOT goes to $6.5. I close the 5xLONG at $6.2 for $49.219 BUT NOW I'M IN THE MIDDLE!

I WITHDRAW 50 $USDC from the LP.

Why do I withdraw $USDC from the DOT/USDC LP?

Because I've 'discovered' a local $DOT middle for my leveraged positions.

Now it's time for me to emphasize that middle.

I place both a 5xLONG and 5xSHORT on $DOT @ $6.5 for ~50 $USDC each.

My $DOT leveraged positions are now as follows:

5xSHORT @ $6; 21.875

5xSHORT @ $6.2; 16.406

5xSHORT @ 6.5; 50

5xLONG @ 6.5; 50

5xLONG at $7; 12.5

And with $DOT now at $6.5-per, whichever way the markets go, I make money.

CAN this be wiped out by a rug or a rocket? Sure.

But WILL my positions be wiped out?

... sure?

But $DOT, as a crypto, is pretty big now. I'm leveraging $DOT because I've got a feel for its price-movements, so, given the above setup (PT), it feels like I will have created a $DOT 💸🖨️.

Now, I've only just started this $DOT leveraged approach, so 1) I'm not there yet, and 2) $DOT is no $AVAX (some of you are saying: "THANK GOD!"), so is 5x-leverage enough? Or do I need to go 10x to make this thing work? I'm at day 1, so time will tell.

Goals

Let's say I DO create a $DOT 💸🖨️.

WAT DO?

My immediate goals are:

1. Burn the $USK borrow, so my $DOT 💸🖨️ is FO' FREE!
2. Use the profits to buy more $DOT to mint another 200 $USK and BUIDL!

THEN I'll take a step back and start directing funds.

Long-term goal is to have crypto pay for everything: medical, food, mortgage, my daughters' college.

To do that, I've got to offramp $1,000/day. That's what I'm making in my job IRL.

That is: offramp $1,000/day AND GROW my crypto principal.

There's this thing called inflation.

DO I see this long-term goal as possible, at all?

Yes.

AND!

After I pay off my borrows, and generate $1,000/day, consistently, I'll not only see it, I'll be living it.

I'll keep you posted, folks.

I love you.