How I'm Using... MoreMoney Finance
The first in a series of articles regarding my utilization of different AVAX native protocols.
MoreMoney Finance is a Collateralized Debt Position (CDP) protocol, allowing users to deposit assets and borrow the MONEY stablecoin against their assets. Moremoney offers support for 4 CDPs in BTC.b, AVAX, sAVAX, and GLP. My current positions and strategies are based on GLP and sAVAX.
GLP is like investing in the “house” on GMX.io, the reason being GLP accrues the fees from leverage trading. This dynamic allows for substantial, sustainable revenue paid to GLP holders in the form of AVAX (and esGMX, but let’s focus on the AVAX). APR percentages for GLP have cusped as high as 38% in recent memory.
There are two main strategies for GLP on MoreMoney. I call these strategies “Looping” and “Bulking”. Looping is the process of borrowing MONEY, trading it for more GLP, and restaking the GLP into your initial position. (flow shown below). The key to this strategy is setting your LTV to a comfortable level. Too high a utilization of your LTV and you risk a liquidation percentage (5-10% depending on your deposited collateral).
For smaller positions in GLP at any risk tolerance, I recommend a “Looping” strategy, but never make the debt (MONEY borrowed) greater than you can pay off. Remember, GLP will not moon, so don’t Loop with the hopes of it. The higher your risk tolerance, the more of the LTV you can use. My LTV is low (currently at 26% LTV) so I do not worry about liquidation at all. This is a common trend for me, I typically have a lower risk tolerance than your average crypto investors.
For bigger GLP bags with lower risk tolerances, I typically recommend Bulking. You can make one position (borrow) at the LTV you are comfortable with. From There utilize the MONEY borrowed in 2 main ways. The first option is staking the MONEY into the MoreMoney iMONEY vault. This yields ~9% apr in MONEY without any veMORE boost needed. For iMONEY staking, I recommend staking some MORE tokens into the veMORE staking pool to acquire a greater iMONEY yield apr.
For sAVAX, I utilize a mixed strategy. I used a Looping strategy 2x, then staked the third borrow into iMONEY. This is a mixed strategy because the Bulking comes on the third borrow. Watch your LTV and make sure it stays at a comfortable position for your risk tolerance. This mixed strategy allows me to earn a stable yield on stables and sAVAX while maintaining a relatively low LTV for my sAVAX. The idea here would be to sell off some of the borrowed AVAX after it appreciates to cover my borrowed MONEY, allowing me to have more AVAX than I deposited and no debt (if it appreciates high enough next bull run).
Up next is my utilization strategy for YAK and why I think Yield Yak is the most slept-on protocol on Avalanche.
Thank you for this article! Really like the transparency and the flow charts. Make me feel less in the dark. 🔺
Good charts