Yield Looping
This page outlines how users can utilise Beraborrow to leverage up on their position, and any associated yield.
Strategy Overview
Let's assume that a user wishes to leverage up on their iBGT yield via Beraborrow.
Looping (or recursive leverage) using Beraborrow involves:
Depositing an asset (e.g. iBGT)
Borrowing against it (borrowing the minted NECT debt)
Swapping the minted NECT back to iBGT
Re-depositing the iBGT
Repeating the cycle until the user hits the desired leveraged exposure
For instance, repeating the process above 3 times (with an MCR of 140%) essentially replicates a 2x levered long position on iBGT. Double the exposure, and double the yield.
Link to Strategy
Guide
1) Navigate to the Beraborrow 'Borrow' tab (link above) and input the amount of iBGT to borrow NECT against. Toggle MCR (minimum collateralisation ratio) to the desired levels.
2) Use a DEX, or DEX aggregator (such as Ooga Booga), to swap the newly minted NECT back into more of the underlying asset (iBGT in our example):
3) Take the collateral asset obtained from step 2, and then deposit this into Beraborrow again
4) Repeat process to achieve desired level of levered exposure to the underlying asset.
Leverage Moon Math
Below is a table outlining how much levered exposure to iBGT a user might obtain given x number of loops with an MCR of 140, with the associated effective APY. Note that cycle 0 would be analagous to simply depositing iBGT into a Beraborrow auto compounding vault
0
100
0
100
1x
232.09
1
100
71.43
171.43
1.71x
397.88
2
171.43
51.02
222.45
2.22x
516.24
3
222.45
36.46
258.91
2.59x
601.39
4
258.91
26.34
285.25
2.85x
662.39
5
285.25
18.81
304.07
3.04x
704.21
Note that in the table above, we take the current APY on vanilla iBGT deposits into Beraborrow at time of writing. This will of course be subject to change based on market conditions.
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