Sake Finance
  • Sake Finance
    • What is Sake Finance?
    • Official Links
    • Soneium Mainnet is Live!
    • ACS Campaign is Live!
      • Season 2 Discretionary ACS Points
      • Season 3 Discretionary ACS Points
      • Season 4 Discretionary ACS Points
      • Season 5 Discretionary ACS Points
    • Soneium Ecosystem Badge
  • Lending and Borrowing
    • Introduction
    • Interest Rate Model
    • E-Mode
    • Isolation Mode
    • Risk Parameters
      • Soneium Risk Parameter
    • Astar Pool
  • SONE (STABLECOIN)
    • What is SONE?
    • Soneium Ecosystem Partners
  • Strategies
    • Introduction
    • Sake Looper
  • INCENTIVES
    • Astar Surge Campaign
    • Sake Rewards System
      • Points Calculation
      • Bottles
      • Integration
  • Resources
    • Audits
    • Contract Addresses (Main Pool)
    • Contract Addresses (Astar Pool)
    • Oracles
    • Brand Assets
    • Terms of Service
    • Sake Testnet
      • Testnet v2 [Looper Strategy]
      • Winner of Testnet Sipper
Powered by GitBook
On this page
  1. Strategies

Sake Looper

PreviousIntroductionNextAstar Surge Campaign

Last updated 24 days ago

Looper Strategy

This classic strategy allows our users to obtain recursive leverage on certain assets through Sake Finance’s lending pools. Through this leverage, users can typically obtain enhanced return and additional rewards given out by various protocols. The strategy is launched inside isolated smart contract wallets with strong security considerations in mind.

Benefits of the Sake Finance Looper Strategy

  • Maximized Exposure: By selecting a leverage factor, users can significantly increase their exposure to selected assets, maximizing potential rewards and returns

  • Automated Looping: Entirely automated via smart contract wallets, eliminating manual management of lending, borrowing and swapping

  • Easy Management: Users can track their leveraged position, increase leverage, change position size and make various tweaks with minimal effort

Sample Strategy Flow

How to Get Started

  1. Navitate to Strategies Tab: Head over to the app.sakefinance.com and click on the Strategies tab.

  2. Browse Strategies: Explore the available strategies and select the Looper strategy with your preferred asset.

  3. Launch Looper Strategy: Choose your asset, select the desired leverage multiplier (e.g. 3x), and deploy the strategy.

  4. Manage Strategies: Manage and track your active strategies under Your Strategies section.

Rewards Calculation

After launching a Looper Strategy, users earn:

  • APY for supplying the asset into Sake

  • native APY of the supplied asset (e.g. the staking yield of an Astar LST)

  • Points and rewards, such as:

    • Sake points

    • Solv points

    • Neemo points

Users pay:

  • Borrowing cost of the borrowed asset in Sake

Why is the APY Negative?

In some cases, the Looper strategy may show a negative APY. This happens because of negative carry. Some reasons include:

  • Future Points Payout Excluded: This strategy can help users earn points that provide future rewards. However, points don't provide an immediate payout so the return is not counted in the current APY.

  • Cost of Borrowing: Borrowed assets incur interest costs immediately. This can create negative carry since users might need to pay borrowing costs that are higher than interests earned.

In short, the strategy might earn future rewards, but the immediate cashflow is negative, resulting in a negative APY.