Contest Submission: Tinlake DeFi Leverage Strategy

Community FAQs 1754 Factory Contest
#1

For my strategy I am first starting with 30k USD worth of SNX, but obviously you can tinker with the figures to what fits your risk profile:

Strategy Goals: Stake SNX, Hold ETH, Earn RAD, Earn COMP

Step 1: Buy 30k USD of SNX

Step 2: Stake SNX on Staking | Synthetix Staking and click “mint max” which should allow you to mint ~6000 sUSD (debt) - this should give a Collateral ratio of 500% and you will start earning SNX rewards

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- SNX staking rewards must be redeemed weekly. As the value of SNX staked increases,
the more sUSD you can mint
-The rate of SNX rewards increases with lower C-ratio (more debt=more rewards), however
if your C-ratio is lower than 500% then you must burn some sUSD to the target of 500% to
claim SNX rewards

Step 3: Swap sUSD for ETH - Uniswap Interface

Step 4: Take the 6000 USD worth of ETH to Compound | Instadapp and supply as collateral

Step 5: Borrow 2000 DAI and deposit into Tinlake pool

Also some extra info regarding SNX staking:

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#2

That’s interesting, will you keep the post updated with your progress?

#3

Yeah sure will do :slight_smile:

1 Like
#4

Thanks for the idea. I’m new so just want to check this -

If the value of SNX decreases, is this strategy exposed to liquidation of some sort?

If you’re minting maximum and taking out sUSD to another system, and SNX falls, then how quickly must you add more sUSD or some other collateral to avoid liquidation (if that is a risk)?

THanks
D

#5

Yes there is a risk for liquidation, the higher the C-ratio the safer the risk is. If C-ratio falls below 200% then you’re at risk for liquidation. If price does reach that threshold, then I believe you have 72 hours to repay debt and unstake SNX to avoid liquidation.

So obviously minting maximum carries higher risk but also higher staking rewards, you can mint a custom amount to adjust the C-ratio to the risk you want. Higher C-ratio = less risk = less sUSD minted = less SNX staked = less SNX staking rewards

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#6

I’m guessing that this strategy only works if you’re prepared to mint significant sUSD? Gas fees will wipe out any returns with smaller balances. How does a newb play around in this space? May be the Optimistic L2 Mintr would help. Thanks for the idea though. :slightly_smiling_face:

#7

Yeah it wouldn’t be worth it with a low amount of capital as gas fees would eat up your stake

1 Like