sAVAX: the health of Avalanche

Let's examine the $sAVAX supply - $AVAX borrow loop on @AaveAave.

I have yields to collect. Great!

Or is it?

The δδ value (change in net APR) shows I'm bleeding 1 $AVAX per day. Net. 

Worse: the yield comes once a week, not once a day.

The $sAVAX factor no longer gains against $AVAX borrow rate.

What is the $sAVAX factor? It is a measure of yield-returns being compounded into the underlying staked $AVAX.

A sluggish factor means less yield-returns, which means less fees collected, which means fewer transaction.

The $sAVAX factor is a barometer of the health of Avalanche.

"But, the el geophf!" you exclaim, "what about those spikes?"

Those are when I reinvested @AaveAave yields.

"Don't they make up for the $sAVAX factor losses?"

They do, and more than make up for the losses, there's a problem with these reinvested yields: they are incentivized.

"What's the problem with incentivized yields?" you may ask.

@AaveAave can, AND HAS, removed incentives.

More than that: what is there to incentivize?

Avalanche: what protocols are thriving, growing, and producing 24h-volumes? Please name me a few.

I see the opposite of development:

I see silence. I see stagnation.

Are there working protocols on Avalanche? Yes.

Are there protocols under active development, bringing in volume? Not that I see.

And not that the $sAVAX factor is showing: the barometer is flatlining.

The $sAVAX supply - $AVAX borrow loop is not working for me anymore.

Consequently, I am closing my positions on @AaveAave, withdrawing my liquidity from this protocol and parking it on @BenqiFinance that IS paying (incentivized) yields that cover borrow rates, for now.

I am

SAD

to take this action. I was supposed to retire on this yield-generating machine.

The simple fact is that yields are not being generated. Quite the opposite: principle is being eroded. Daily.

I'm staunching the flow of blood before this wound becomes fatal.

I 

• withdraw $sAVAX

• swap to $AVAX on @KyberNetwork 

• repay borrow on @AaveAave 

• lather, rinse, repeat

looping my way out of the $sAVAX - $AVAX loop, listening to Pink Floyd as I do so.

At the end of the day, I'm walking away with 958.99 $sAVAX and 0.92 $WAVAX yield (~0.87 $sAVAX).

@AaveAave $sAVAX loop Close-out

close date: 2023-01-08

remain: 958.99 $sAVAX

yield: 0.92 $WAVAX or 0.86802092 $sAVAX

ROI: 6.30%

APR: 41.79%

That's a REALLY GOOD investment.

Math pop-quiz: differing and variable APYs for sAVAX-AVAX LP farms

MATH PROBLEM, you CRYPTONIÆNS!

@KyberNetwork is offering 17%+ on sAVAX-AVAX LP farm, ... but only for 6 more days.

I have my sAVAX-AVAX LP farming on @traderjoe_xyz, earning 7%, no termination date set.

Is it worth it to move $10K of sAVAX-AVAX? If so, how much more do I earn?

• (answer)

AVAX - sAVAX exchange rate

The $AVAX - $sAVAX exchange rate just fell below 0.95 to 0.949830, and I just realized 5 $AVAX, HODL'n $sAVAX, supplied on @BenqiFinance. 😎

Broken TraderJoe sAVAX-AVAX LP farm

The @traderjoe_xyz sAVAX-AVAX LP farm is now broken.

Problem: I can't stake my sAVAX-AVAX LP tokens.

reproduction:

1. I add liquidity sAVAX and AVAX

2. I go to my sAVAX-AVAX LP farm to stake.

3. it says I have 0 LP tokens available.

Fix this, please. Now would be good.

Also, I had to compute manually how much $AVAX to add. Are your LPs now allowing asymmetric provisioning ('zapping')? If so, this is a major change in how LPs are provisioned and should be called out in the front-end.

If not, then your front-end is broken. Please fix this.

Shift to AVAX-sAVAX LP on @traderjoe

After thinking over a convo with @ScammoonR, I'm shifting liquidity from QI-AVAX LP, staked on @BenqiFinance, 

to AVAX-sAVAX LP, staked on @traderjoe_xyz.

I'm losing too much $AVAX as $QI continues to deflate in price.

A benefit of the AVAX-sAVAX LP, besides controlled IL on the sAVAX price-rise (I don't lose anything, ... I think), is that it issues BOTH $QI, that SUPPLied on @BenqiFinance earns 10% AND $JOE, that earns 6% IN $USDC!!! when staked on @traderjoe_xyz 

Now, there is also the $veJOE token that boosts SOME LP farms, and up to ~1.5% boost only, 

... but the AVAX-sAVAX LP farm is not one of the farms that can be boosted. Is there a particular farm on @traderjoe_xyz that can be boosted that you love? If so, why?

And ... HA! $AVAX 10x LONG on @GMX_IO close for a gain. YUS! 

Join me for (very high risk) funsies! 

Okay! So! Now!

I exit my QI-AVAX LP farm.

How do I do that?

• I WITHDRAW my stake from @BenqiFinance 

• On @pangolindex I remove the QI-AVAX liquidity.

EASY-PEASIES! 

So, I use the PSSCBW to tell me how much to prefund the stables.

PSSCBW 

As you see, I've included te $QI, which I will supply, as well as the $AVAX, which I'll swap to $sAVAX then supply.

So, I swapped some of both to $USDC.e.

I swap the $USDC.e to $DAI.e on @CurveFinance, then supply the $DAI.e to @BenqiFinance 

asdf

Answer to sAVAX: unstake or supply pop-quiz

Answer to sAVAX: unstake or supply pop-quiz, thanks to @Quintin_brown1 request:

1. Let's look at UNSTAKE the $sAVAX. If I unstake, my SPREADSHEET says I have a NET LOSS: -$0.41

2. However if we SUPPLY the $sAVAX to @BenqiFinance, we get $sAVAX AND $AVAX AND $QI yields, for a NET GAIN: $0.61

It's better to SUPPLY!

Spreadsheet solution available on the "sAVAX: SUPPLY or UNSTAKE"-tab.

sAVAX: Unstake or Supply Pop-quiz

POP-QUIZ

I swapped 18.5834 $AVAX to 18.0559 $sAVAX

IF I UNSTAKE THAT $sAVAX, I get 18.74 $AVAX in 2 weeks. SO:

1. what is the ROI on unstake?
2. what is the APY?
3. importantly: IS IT MORE PROFITABLE to BANK that $sAVAX on @BenqiFinance with its APY OR UNSTAKE the $sAVAX? WHY?

(answer)

Which Borrow: sAVAX or AVAX?

The second-half of the solution of the Which Borrow? pop-quiz is HOLD-YER-HORSES interesting! 🧐🧐

It makes a net $150 MOAR!!! than the $AVAX BORROW / $AVAX SUPPLY solution as the $sAVAX supply grows intrinsically as an x-token at 7.2% and extrinsically as $sAVAX SUPPLY.

Spreadsheet (sAVAX Borrow tab)

What gets even more in-ter-est-ing is when you mess with the percent that goes to $sAVAX re-SUPPLY.

• 0% $sAVAX re-SUPPLY earns ~$150 LESS!

• 100% $sAVAX re-SUPPLY, that is: 0% $QI SUPPLY earns ~$150 MORE! 🎉🎉🌶️

IN-TER-EST-ING!

For reference, the first (AVAX) solution to the pop-quiz.

Which Borrow? pop-quiz

Okay, I've 

• BRIDGED $1000 worth of $AVAX to Avalanche from Coinbase, and, following my plan, 

• SWAPPED that to $sAVAX on @traderjoe_xyz (which has the best swap rate today)

• to SUPPLY @BenqiFinance.

Money Market and x-token pop-quiz:

1. Which do I BORROW: $AVAX or $sAVAX? 
2. Which BORROW gives me more value?

The Borrow rate and payout information per token:

• $AVAX rate 7.49%, payouts: $AVAX 0.67%, $QI 0.42%
• $sAVAX rate 2.95%, payouts: $AVAX 0.00%, $QI: 0.00%

Amplifying information:

$sAVAX has a projected (intrinsic) growth rate of 7.2% APY. That is to say, after one year, 1 $sAVAX will still be 1 $sAVAX, but the underlying worth will be 7.2% more $AVAX in one year.

That information may ... 'help.' 😈

FUN!