Loop of depositing & borrowing to acquire a higher APY
Leverage your APY
Starlay Finance has a loop function that allows you to earn a large number of LAYs by repeating depositing and borrowing.
Normally, depositing increases a collateral amount and allows a borrower to obtain assets within the amount available. LAY is then distributed to users according to the amount spent for both depositing and borrowing. By repeating this depositing and borrowing, the original asset can be leveraged up to 5 times to obtain a higher APY.
For example, the table is for a deposit and withdrawal of one USDC if LTV is 80%:
| Loop | Deposit | Withdraw | Deposit Sum | Withdraw Sum |
|---|---|---|---|---|
| 1 | 1 | 0.8 | 1 | 0.8 |
| 2 | 0.8 | 0.64 | 1.8 | 1.44 |
| 3 | 0.64 | 0.512 | 2.44 | 1.952 |
| 4 | 0.512 | 0.4096 | 2.952 | 2.3616 |
| 5 | 0.4096 | 0.32768 | 3.3616 | 2.68928 |
| 6 | 0.32768 | 0.262144 | 3.68928 | 2.951424 |
| 7 | 0.262144 | 0.2097152 | 3.951424 | 3.1611392 |
| 8 | 0.2097152 | 0.16777216 | 4.1611392 | 3.32891136 |
| 9 | 0.16777216 | 0.134217728 | 4.32891136 | 3.463129088 |
| 10 | 0.134217728 | 0.1073741824 | 4.463129088 | 3.57050327 |
| 11 | 0.1073741824 | 0.08589934592 | 4.57050327 | 3.656402616 |
| 12 | 0.08589934592 | 0.06871947674 | 4.656402616 | 3.725122093 |
| 13 | 0.06871947674 | 0.05497558139 | 4.725122093 | 3.780097674 |
| 14 | 0.05497558139 | 0.04398046511 | 4.780097674 | 3.82407814 |
| 15 | 0.04398046511 | 0.03518437209 | 4.82407814 | 3.859262512 |
| 16 | 0.03518437209 | 0.02814749767 | 4.859262512 | 3.887410009 |
| 17 | 0.02814749767 | 0.02251799814 | 4.887410009 | 3.909928007 |
| 18 | 0.02251799814 | 0.01801439851 | 4.909928007 | 3.927942406 |
| 19 | 0.01801439851 | 0.01441151881 | 4.927942406 | 3.942353925 |
| 20 | 0.01441151881 | 0.01152921505 | 4.942353925 | 3.95388314 |
| 21 | 0.01152921505 | 0.009223372037 | 4.95388314 | 3.963106512 |
| 22 | 0.009223372037 | 0.007378697629 | 4.963106512 | 3.970485209 |
| 23 | 0.007378697629 | 0.005902958104 | 4.970485209 | 3.976388168 |
| 24 | 0.005902958104 | 0.004722366483 | 4.976388168 | 3.981110534 |
| 25 | 0.004722366483 | 0.003777893186 | 4.981110534 | 3.984888427 |
| 26 | 0.003777893186 | 0.003022314549 | 4.984888427 | 3.987910742 |
| 27 | 0.003022314549 | 0.002417851639 | 4.987910742 | 3.990328593 |
The loop feature allows for up to 5x leverage in deposit for the asset with 80% LTV by conducting the loop 27 times. On starlay.finance, pressing the 5x button will borrow up to the maximum, but reducing the leverage to 4x or 3x will adjust the percentage of the borrow to the deposit lower.
Each asset has its LTV. An asset with a small LTV value cannot be leveraged 5x. For instance, SDN's LTV is 40% and it only can be leveraged 1.5x. For more information on the LTV of each asset, please check Risk Parameters.
The loop function of MAKAI is experimental and may not always work as expected. It does not mean that assets cannot be withdrawn from the contract. However, depending on the value of Oracle, the loop might not leverage to the maximum of 5x. If it doesn't reach 5x leverage, please try to loop again with a borrow.