Sake Looper
Last updated
Last updated
This strategy operates entirely within Sake Finance’s lending pools, allowing users to maximize their exposure by leveraging SolvBTC and SolvBTC.BBN. The primary objective is to achieve leverage and earn rewards from the Sake Finance ecosystem. This strategy exclusively uses Sake Finance's infrastructure for borrowing and lending.Users can select their desired leverage directly from the frontend, with options available up to 9x leverage using e-mode.
User Deposits Asset: Users begin by depositing SolvBTC into the Sake Finance lending pool. It is then automatically converted into SolvBTC.BBN using the Solv protocol. Alternatively, the strategy may purchase SolvBTC.BBN on the secondary market if the pricing is more favorable. (Note: Users cannot deposit SolvBTC.BBN directly—only SolvBTC can be deposited, which will then be converted.)
Strategy Lends the Asset on Sake Finance: The strategy lends the converted SolvBTC.BBN into the Sake Finance lending pool, where it earns interest and rewards from the platform.
Strategy Borrows Against the Lent Position: The strategy allows users to borrow SolvBTC against their lent SolvBTC.BBN, increasing their exposure to SolvBTC without additional capital. This boosts the user’s position and rewards.
Looping Process to Achieve Selected Leverage (up to 9x): The borrowed SolvBTC is converted into SolvBTC.BBN and re-lent into the lending pool. This process repeats recursively until the selected leverage multiplier (up to 9x) is achieved. e-mode ensures the strategy optimizes for efficient leverage.
Monitor Strategy and Rewards: After deployment, users can monitor their Looper strategy via the Sake Finance dashboard. Metrics like APY and earned rewards (e.g., partner rewards, points) are displayed as the strategy progresses.
SolvBTC (Users cannot deposit SolvBTC.BBN directly yet.)
By participating in Sake Finance’s borrowing and lending pools, users earn:
APY from supplying assets.
Points and rewards, such as:
Sake points
Solv points
??? points
Visit Sake Finance: Head over to the Sake Finance app and connect your wallet (e.g., Metamask, Rabby, Coinbase Wallet).
Browse Strategies: Explore the available strategies and select the Looper strategy.
Launch Looper Strategy: Choose your asset (SolvBTC), select the desired leverage multiplier (up to 9x), and deploy the strategy.
Monitor Performance: Track your strategy’s performance and rewards through the Sake Finance dashboard.
Maximized Exposure: By selecting up to 9x leverage, users can significantly increase their exposure, maximizing rewards and returns on the platform.
Automated Looping: The entire process is automated via Sake Finance, eliminating the need for manual management of lending and borrowing cycles.
APY and Rewards: Users earn competitive APYs and additional rewards from Sake Finance’s lending pools, optimizing yields with minimal intervention.
In some cases, the Looper strategy may show a negative APY. This happens because of negative carry. Here’s a simple explanation:
Points Accrue but Don’t Payout Immediately: When you use this strategy, you earn points over time, which will provide rewards or benefits later. However, these points don’t generate interest immediately, meaning they don’t contribute to your current APY.
Cost of Borrowing: At the same time, the borrowed assets in your strategy have an interest cost attached to them. Since the points are not providing immediate returns, and you’re paying interest on your borrowed assets, this creates a negative carry, resulting in a negative APY.
In other words, while your points accumulate and will pay off in the future, the immediate interest cost of borrowing outweighs the short-term returns, leading to a negative APY in the present.