Are centralized stablecoins USDC, USDT, BUSD safe?
I hope so. But I can't be sure.
FTX showed us that centralized entities may have skeletons in the closet.
$LUSD is the best alternative.
Do you know you can also earn double-digit APR on it?
See how!👇
twitter.com/korpi87/status/1552646641852620800
➡️ BORROW LUSD AND SELL
LUSD is soft-pegged within the $1.00-1.10 range but incentives should eventually bring it closer to $1.
If you sell at $1.04 and buy back at $1, your APR depends on the waiting time for re-peg:
49% APR: 30D
24% APR: 60D
16% APR: 90D
12% APR: 120D
➡️ VELODROME ON OPTIMISM
Provide liquidity to stablecoin pools with no IL:
17% APR: LUSD - USD+
14% APR: LUSD - MAI
12% APR: LUSD - sUSD
6% APR: LUSD - USDC
app.velodrome.finance/liquidity
➡️AUTOCOMPOUNDED VELODROME BY BEEFY
If you look for set-and-forget vaults that compound the rewards for you, Beefy is the place to go.
Please note that due to 9.5% performance fee on Beefy, APYs won't be higher than reward APRs on Velodrome.
app.beefy.com/
➡️ STARGATE
LUSD has been recently added to @StargateFinance.
Liquidity pools are available on both Ethereum and Optimism:
13% APR: Optimism
11% APR: Ethereum
stargate.finance/farm
➡️ CHICKEN BONDS
You can bond LUSD to obtain Boosted LUSD (bLUSD) - a yield-amplified version of LUSD.
Current APR: 67%!
Take note that accruing enough bLUSD to break even after bonding LUSD takes a few weeks.
chickenbonds.org/lusd-bonds#front-ends
How CB work:
twitter.com/korpi87/status/1575899303050022912
WHAT DO I DO?
$1.04 is to high a premium for me to not sell LUSD now.
I used a fair chunk of my ETH stack to borrow LUSD at 200% collateral ratio, sold it and I'm waiting for the price to drop. 🙏
I also have a small position in bLUSD as I like new experiments.
FINAL THOUGHTS
I don't recommend to buy LUSD now. The premium is too high.
If you want to farm with LUSD, use one of the Liquity frontends to borrow it against ETH collateral:
liquity.org/frontend#frontends
Borrowing fee is 0.5%.
Set comfy liquidation price to sleep well at night!
If you want to read more about @LiquityProtocol I covered it briefly last year.
It's an immutable protocol so the design hasn't changed since then :)
twitter.com/korpi87/status/1451126783303163904