"Is ETH going up?"

"Is $ETH going up?"

Here's a question I don't care about, ... nor should you.

I place a 10xLONG on 0.5 $ETH on @Levana_protocol, expecting it'll go up.

Here's the thing: I already have a 10xSHORT on 0.5 $ETH, ... in case it goes down, hedging the LONG.

So:

• if $ETH goes up, I make money, closing the long.

but:

• if $ETH goes down, I make money, closing the short.

... "Is $ETH going up?"

I don't care. Either way: I make money.

Set up your trades this way, fam, to put a Big W on the boards, either way.

love, geophf

Levana: δneutral ETH position

Let's look at setting up a δneutral position on @Levana_protocol. I'm particularly interested in $ETH with it's 171% APR funding fees on shorts (negative means: not to the protocol, but to me).

Funding fees are HIGHLY volatile AND minuscule to price movement. Let's start smol.

The first-first thing I do is move 2 $ETH to @osmosiszone (where @Levana_protocol lives) via Satellite.

Moved? Good.

The second-first thing I do is fund my long-side by putting 1.5 $ETH into their stable pool at 19% (NOT into their locked pool at 30%+).

Voilà! Funded.

AND @Levana_protocol has a 'My HODL'ns'-page which shows all the funds you've contributed to support the 'house'-side of the perpetuals.

Look at me, earning $ETH like a good boy! 🐶

Why don't I lock my $ETH for 45 days? Because I need it liquid in case my perpetual goes South.

I record all the data on my 3x $ETH short on @Levana_protocol, just in case a yummy take-profit opportunity arises or in case liquidation becomes proximate.

I'd love these values be apparent on @Levana_protocol, but they are hidden past the scroll bar, which I find distasteful.

I also begin reporting my @Levana_protocol portfolio, which (slightly) expands my @cosmos-presence outside of @TeamKujira. 

p.s.: @Levana_protocol's take on establishing a δneutral position (in their case-study: with $ATOM), which they call "cash and carry," which goes into depth of funding rate strategies and provides caveats.  

ETH δneutral farming on Nolus

ETH δneutral farming on Nolus

Okay, so you have ETH, or BTC, and HODL'n it is all fine and dandy, but wouldn't it be nice, while you are HODL'n it, that you earned from it, not only in the price-movement, but also by farming yields from the principal, and in a price-protected manner, at that?

This 🧵discusses one such way to do this, using δneutral farming on @NolusProtocol.

I (short-)sold $wETH on wETH/axlUSDC @TeamKujira FIN board.

This was a multi-step process, where I accumulated 278 $axlUSDC in total. I transfer that all that to @NolusProtocol.

I am going to create a $wETH δneutral position on Nolus.

The first side of the $wETH δneutral position on @NolusProtocol is to establish a farm from the $wETH I sold short on @TeamKujira. I deposit the 168 $axlUSDC gained from that sale into Nolus Earn, yielding 14% $NLS APY and 6% APR (on the $axlUSDC).

The other side is the 0.16 $wETH long position, which I lease for 110 $axlUSDC, ...but its value is 263 $axlUSDC! (meaning: I'll need an additional 163 $axlUSDC to close this position, eventually).

This is a LEVERAGED long position.

This completes the δneutral position:

• On the short-side, I'm farming 168 $axlUSDC at 6% APR, net
• On the long-side, I'm leveraging 0.16 $wETH

This is NOT 100% pure δneutral, as I must manually manage the risk, myself, but in this I do get price-protection.

• Should the market go up, I close the long-side and profit from buying 0.16 $wETH at a discount: a leveraged-buy.

But then:

• Should the market go down, I use the liquidity from the $wETH (short-)sale, and close the long-side, avoiding liquidation. Yes, manually, granted, but still the protection is there when needed.

Either way, I farm 0.16 $ETH (and short-side liquidity), protected.

This is The Plan™️

I'm starting here, with this smol position, and see how it works.

Once this is proved out, I'll increase the $ETH δneutral position. Then, given that works, I'll expand to a $BTC δneutral position, as well.

I'll keep you posted, here, as I do.

2022-11-22 Benqi Finance AVAX loop APR report

I also have yields on @BenqiFinance to harvest. 

That's a rather more involved process, however, so I'm going to go on a walk first, before my afternoon meeting at work. 😊🚶‍♀️

"GEOPHF! $AVAX IS WAY UP! YOU STILL BUYIN'???"

me: "...maaaayyyyybee?" 

"GEOPHF! WITH THAT $AVAX YOU 'maaaayyyyybeee' BOUGHT, ARE YOU TRANSFERRING IT TO YOUR AVALANCHEAN WALLET???"

me: "...maaaaayyyyyybeeeee?"

"GEOPHF! IS THE ONLY WORD YOU SAY IS 'maaaaayyyybeeee'??? AND DOES THAT MEAN 'YES'???"

me: "...maaaaayyyyybeeee?" 

OKAY! BACK AT IT!

I collect $AVAX-yields on @BenqiFinance, swap them for $sAVAX on @KyberDAO, then pair the $sAVAX with $AVAX and stake that LP on @traderjoe_xyz.

This triggers a $JOE- and $QI-yield harvest. The $JOE-yields I stake as $sJOE on @traderjoe_xyz for $USDC-yields.

The $QI-yields from @traderjoe_xyz I combine with the $QI-yields from @BenqiFinance.

I swap those $QI-yields to $AVAX on @pangolindex, 

... then swap ALLES teh $AVAX to $sAVAX on @KyberDAO. 

The $sAVAX I supply to @BenqiFinance. This pays off my self-loan (which restarted my @AaveAave looped position), then I immediately borrow back the remainder as $AVAX from @BenqiFinance.

This is my working liquidity for today.

Now I can run the daily @BenqiFinance report.

2022-11-22 @BenqiFinance $AVAX loop APR report

APY 6.94%
APR 16.37%

total $AVAX-yields collected: 10.32
total $QI-yields collected: 3551.32
yields, incept: 2022-10-22
yield collected for 31 days

With $AVAX at $12.31 and $QI at $0.007719
That is $4.98 collected per day (avg)

Vital Point

It's important to point out the vital point of this δneutral strategy.

People have lost everything in this #cryptocrash.

I haven't lost: in fact, I've gained. By playing the $AVAX-borrow against the $sAVAX-supply, my $AVAX becomes stable and I earn yields, ... in all markets.

HARMONY: Leveraged yield farming on Tranquil.fi

#PSA 

The BORROW side for $USDC is finally net-positive yields on @tranquil_fi ... also for $ETH, if that return (49%) is to be believed.

I don't believe it (glitch?), but I'll borrow and cover there as long as @tranquil_fi honors that return. 

YMMV.

Okay, @v0hax shows us WHY $ETH borrow yields are now through the roof on @tranquil_fi 

But what are you going to do what that α?

Here's how to set up a δNeutral $ETH position on @tranquil_fi to leverage yield farming.

Recap: δNeutral is when you borrow or short a position, something considered to be very risky, but then immediately cover that short, completely, with a long-position of the same asset.

Why? You get yields on both sides and protect your principal from market ups and downs.

Great! So, where would you do this? Where the yields for a borrow are net-positive: they are PAYING you to borrow crypto.

They are

PAYING YOU

to borrow crypto.

Establishing a δNeutral position on Tranq.fi

Okay, so HOW do you set up a δNeutral position on @tranquil_fi?

First, FUND your @tranquil_fi position with collateral. 

You see I have lots of collateral everywhere. Why? To be flexible. When an opportunity arises, I can take it, BOOM!, just like that.

Like now.

Next, go to the borrow-side and look for assets that have a net-positive yield.

Borrow. Me: I borrow to 95% (VERRA RISKY!). Why? I'll explain.

So, the risk is what? If $ETH suddenly spikes, I get liquidated. Ick: no bueno. 🤢🤮

But, for me, that risk exists only for seconds, because I IMMEDIATELY take that borrowed asset and fund the collateral-side, COVERING the borrow, COMPLETELY

δNeutral, folks. 😍

Do you see what happened when I covered the loan? My position freed up: I'm in the safe-zone again

Guess what I do next?

1. BORROW <-
2. COVER         |
3. LOOP ---------|

until my position stabilizes.

This is LEVERAGED yield farming. I use the loan to LEVERAGE my position.

Let's take a step back.

I now have $4500 in $ETH borrowed and collateralized: both sides earning yields.

How much of that is mine?

None. Zero. Zip. Nada.

I am earning 22% yield ...

... using $4500 of OTHER. PEOPLE'S. MONEY.

Geniousness. 🤓

Maintenance

What happens when the price of $ETH drops? My borrow becomes weaker, but my collateral covers more strongly. Me likey.

What happens when $ETH price skyrockets?

Uh, oh! The loan amount is not covered by the collateral anymore.

Do I panic?

Maybe a little, but...

But that's why I have collateral to COVER the loan. If the markets go cray and things get out of hand, I pull out the collateral and pay off the loan with it.

I'm covered, see? That's why the collateral COVERS the loan.

No sweat. (Okay, a wee bit o' sweat.) 😅

But until that time, I keep this position until it's no longer viable. When the loan $ETH interest increases to be above the $TRANQ yield, then I close out the position.

Do I get to keep any of the $ETH? Nope. It's other people's. I keep NONE of the asset in a @tranquil_fi δNeutral position.

Then why do it?

Those sweet, sweet $TRANQ yields on $4500 ...

... of OTHER PEOPLE'S MONEY. 😘

Caveat Investor

I would be remiss if I don't point out that δNeutral is not for everyone. It's a very high risk approach, and I recommend only very experienced investors even try it.

DO NOT take a loan you CAN'T repay or afford to lose in liquidation, because YOU WILL be liquidated!

How do I know you'll be liquidated? Because I've been liquidated FOUR TIMES learning this stuff.

START very-Very-VERRA SMOL!

Also, if you can't keep calm in turbulent market conditions, DO NOT do δNeutral. You'll panic and lose everything.

KEEP CALM, or DON'T DO IT!

Finally, δNeutral means IT'S NOT YOURS! 

If you get attached to 'your' $ETH, then don't do this. It's not 'your' $ETH, it's BORROWED $ETH, and you HAVE to give it back when the position sours. If you can't do that, DON'T DO THIS!

Conclusion

So, read the caveats, understand the risks, and try it out (only with money you can afford to lose, mind). It's 40%+ interest, leveraged using 'other people's money.'

δNeutral is a powerful instrument to have in a portfolio.

Give it a go and see if it's for you.