As with every game out there, there is always a way to maximize your strategy—in this case, how to maximize the yield you earn in the Lif3 Ecosystem.
This particular strategy utilizes the Terrace (https://lif3.com/terrace/). For those of you who don’t know what that is, the Terrace is a place where you can supply your tokens to borrowers, leverage your LPs for amplified returns, or simply deposit your LPs to auto-compound rewards into more LPs.
In this guide, we will be focusing on the third option: borrowing single assets against your LP collateral.
Objective: Get more $LIF3 tokens staked and earning in https://trade.lif3.com/earn
What do we need to start?
To begin, we will need $FTM and $LIF3 tokens. You can acquire them in the following places:
-Lif3 Swap: https://lif3.com/swap
-Felix: https://trade.felix.com/
-Lif3 Trade: https://trade.lif3.com/trade (Only for $FTM on the Swap Tab)
Once you’ve acquired your $FTM and $LIF3 tokens, you will need to head to https://lif3.com/pool/add and add liquidity to the FTM/LIF3 liquidity pool.
After receiving your LP tokens, go to the Terrace (https://lif3.com/terrace/) and find the FTM/LIF3 vault.
Upon clicking the FTM/LIF3 market pool, you will find this:
This is where the DeFi blocks start to pile on top of each other and the reason why we enjoy DeFi protocols. If you are a visual learner, you will find this graph below perfect for you (and if you are not, don’t worry, I will explain it step-by-step below it).
Step 1: Deposit your FTM/LIF3 LP tokens in the Terrace using the Deposit button.
Step 2) Borrow an amount of $LIF3 tokens within your risk appetite for borrowing in DeFi lending/borrowing strategies.
Step 3) Head to https://trade.lif3.com/earn and single-stake the $LIF3 tokens to start earning esLIF3, protocol fees (paid out in $FTM) collected from traders on the platform, and Multiplier Points that will boost your rewards over time.
How much should I borrow to avoid liquidation?
This is a question only you can answer, as every DeFi investor has their own risk tolerance they are comfortable with. In my experience, I decided to borrow until my liquidation point was way above the ratio needed for The Fountain of LIF3 to print, so I don’t have to check my positions regularly.
Advantages of this strategy:
As we commented at the start of this article, the Terrace works as an auto-compounder vault too, so while we are doing all this and earning on the borrowed $LIF3 we staked on Lif3 Trade, our amount of LPs will increase over time thanks to the compounding of $LSHARE rewards from providing liquidity being sold into more FTM/LIF3 LP tokens.
Yield on top of Yield 🔥
In case your liquidation point approaches, the process of deleveraging — or repaying — is easy. You can always unstake $LIF3 from Lif3 Trade and repay what you borrowed at the Terrace pool in a couple of transactions.
As we borrowed $LIF3 tokens, the only token we owe is our initial loan of $LIF3 plus the borrowing interest accumulated during this time (at the time of writing, the Borrow APR for $LIF3 is below 1%). Since we are only dealing with $LIF3 tokens, we are not affected by $LIF3 price action in USD, which is another advantage.
It’s also important to note that even after you close out this strategy, your staked esLIF3 will continue to earn you FTM fees from the platform forever.
Have you grasped all that you will be earning with this strategy?
-Increasing your LPs position, thanks to your LPs auto-compounding while staked in the Terrace
-Incentives at Lif3 Trade for single-staking $LIF3:
- esLIF3 incentives
- Protocol fees (paid out in $FTM) collected from traders on the platform
- Multiplier Points that will boost your rewards over time
If you want to discuss strategy, ask questions, or talk about the current market climate, join our Lif3 community on Discord https://discord.gg/lif3 or Telegram https://t.me/Lif3_Official
Disclaimer: The information in this article is provided for educational and informational purposes only, without implied warranty of any kind, and does not constitute financial advice.
Enjoy #Lif3!
