Started testing a looping strategy on
@ZestProtocol to farm some of their new incentive campaign.
Here's what I've been doing:
• Supplied ~$92 of
$sBTC
• Borrowed 30
$USDCx against it
• Swapped the USDCx into more
$sBTC
• Supplied that sBTC back into Zest
• Repeated with another 10
$USDCx
Final position:
• $133
$sBTC supplied
• 40
$USDCx debt
• $93 net equity
Zest is now paying 0.5 BTC per month in incentives in
$STX.
Half goes to
$sBTC suppliers, while the other half goes to
$USDCx borrowers with 20%+ LTV.
So the loop potentially lets me increase my sBTC exposure while earning incentives on both the supply and borrow side.
Of course, leverage cuts both ways.
A 10% rise in sBTC adds roughly $13 to my supplied position before interest and fees. A 10% drop does the opposite while also pushing my LTV higher.
Anyone running other loops on Zest?
Disclosure: I’m a long-time Stacks supporter and
$STX holder.