It just occurred to me that since you only wanna

Question

It just occurred to me that since you only wanna

CPMM LP on assets you’re bullish on because if the price of the volatile asset goes down impermanent loss would most likely outweigh any collected fee profits, you could theoretically LP using a *borrowed* volatile asset to almost create a delta neutral LP position. Let’s say you think the current shitcoin of the day has topped out and thus you expect a) price to go down and b) LP fees to increase from market activity as people try to unload their position.

So you would borrow x asset from lending protocol, LP with it, and as the price goes down your LP position is accumulating more of the volatile asset, but since you’re merely borrowing it, not owning it, then technically it’s not you who’s holding the bag. Once you wanna exit, you would hypothethically hold way more x tokens than you owe to the lending market, so you’d repay the loan and sell the difference for a profit. If the price instead goes up, well, you’re the one capturing the value accrual while you’re holding it.

Balancer style 80/20 pools would have even less exposure since there’s less of the other token in the pair so it’d be an even safer position there I would think. Anyways, have you guys seen any protocols working on something like this or heard anybody talking about tangentially similar ideas? Would like to do further research and validate this thought exercise to ensure I haven’t lost some of my marbles just yet lmao

#cryptocurrency #english #frax

0

15.03.2024

9 ответов

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Blocks Grahm Автор вопроса

Bueno Pues
Don’t know anyone doing it, but thank you for shar...

Asked one of my giga brain degen buddies and funnily enough he actually wrote an article two years ago describing the math from a now defunct protocol on Solana called Tulip that essentially used the same underlying system logic to create delta neutral leveraged yield farming positions. Unfortunately looks like due to the FTX collapse impact on Solana, plus being exposed to the Rayium exploit, plus accusations of fund flow mishandling the protocol didn’t survive the bear, gg rip in piece 😔 But now that the idea has been validated, I guess imma start cooking something with it, perhaps even some delta neutral FXTL farming mechanic? 👀 Btw if you’re curious about the article my buddy wrote here you go, but full disclosure, it’s nerdy as fuck and it’s dangerous out there, so take this 🗡️ https://marco112358.medium.com/leveraged-yield-farming-can-it-be-delta-neutral-152afb9aea5e

0

8 месяцев назад

Michael

Blocks Grahm
Asked one of my giga brain degen buddies and funni...

Welll you can kinda delta-neutral farm CRV

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8 месяцев назад

Blocks Grahm Автор вопроса

Blocks Grahm
Asked one of my giga brain degen buddies and funni...

@ssmccul you’d probably find this interesting 🧠

0

8 месяцев назад

Blocks Grahm Автор вопроса

Michael
Welll you can kinda delta-neutral farm CRV

Any articles or docs I can read more about this? 👀

0

8 месяцев назад

Samuel (Flywheel | Leviathan News)

Blocks Grahm
@ssmccul you’d probably find this interesting 🧠

BAMM opens a whole new world for DN strats

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8 месяцев назад

Michael

Samuel (Flywheel | Leviathan News)
BAMM opens a whole new world for DN strats

Btw please explain about BAMM

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8 месяцев назад

Blocks Grahm Автор вопроса

Samuel (Flywheel | Leviathan News)
BAMM opens a whole new world for DN strats

I was talking to Thomas (one of the new devs working on it) about BAMM at the ETH Denver sendoff mixer and got really interested in it so I asked him if there was any whitepaper or documentation I could read on it and he said “now that I think about it, I don’t think so” lmao 😭

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8 месяцев назад

Blocks Grahm Автор вопроса

Michael
Btw please explain about BAMM

When I talked to Thomas about it I asked him if it was kinda like Infinity Pools where you turn Uni v3 positions in to short put or call options, he said something like “No, it’s more like it just allows you to hedge against the impermanent loss of your LP position” which instantly got the gears in my brain turning 😯 Anyways here’s a really good article from the founder of Panoptic about Uni v3 options in case you’re interested https://lambert-guillaume.medium.com/how-to-create-a-perpetual-options-in-uniswap-v3-3c40007ccf1

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8 месяцев назад

Bueno Pues · Accepted Answer

Bueno Pues

Don’t know anyone doing it, but thank you for sharing. It’s good to think about

0

8 месяцев назад

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