This strategy takes a Base Asset, stakes it in Compound, borrows stablecoins which it then leverages for arbitrage while farming COMP across all activities.
It will harvest farmed COMP to pay off interest periodically, keeping gains in USD pegged token (Farm Assets).
Optional strategy for yETH vault and yWBTC vault. Leverage Farm COMP and Arbitrage stablecoins, with an optional DAI specific option for extra leverage.
Start by depositing Base Asset (WETH/WBTC) into Compound, and borrowing a Seed Asset (USDC/DAI). This should be drawn to the target safe c-ratio.
Each Seed Asset has a Sub Farm. Flashloans are used to create a leverage long position with debt in the role of short. The Seed initially borrowed is used to pay the difference back to the flashloan as a deposit.The value is still held in the Compound CDP with debt equating to the size of the leverage.
The Optional Farm utilizes Makers lower c-ratio to maximize leverage in short term price spikes.
If price of ETH drops, reduce from the Sub Farm currently Long the higher priced asset until empty.
Currently need better vault strategy for WETH and a way to utilize WBTC
- Funds deposited in vault go into entry pool
- When a threshold of deposits in the entry pool is reached
- Deposit Base Asset in Compound as Base Farm (e.x. cETH)
- Populate each Sub Farm according to Farm Distribution Model
- This Farm manages the creation, reduction, and management of the sub farms.
- Admin assets from Entry Pool
- Based on current price ratio will deploy assets to either Sub Farm A or B. (DAI/USDC)
- Deposit ETH
- Borrow Seed Asset
- Reduce assets from Sub Farms
- Based on current price ratio will reduce assets in either Sub Farm A or B. (DAI/USDC)
- Repay Seed Debt
- Deposit ETH
- These farms leverage farm the Seed Asset passed to them. (one for each DAI/USDC)
- Receive Seed Asset
Size in Seed * Target Collateral Factorin Seed Asset
- Currently 25% for USDC/DAI, 75% for ETH
- Deposit the flashloaned amount into Compound
- Borrow Opposing Seet Asset (DAI if USDC as collateral and vice versa)
- Sell Debt for Seed Asset
- Repay flashloan (still have initial seed funds to cover difference)
- If profit to buy more ETH.
Sub Farm Distribution Model
- Both DAI and USDC will be farmed at most prices
- Offsets are corrected by new deposits and withdraws with price change rebalances.