Aggressive Strategies (Leveraged Loops)
⚠️ High Risk – Advanced Users Only The strategies on this page involve leveraged looping. They can amplify both gains and losses and are highly sensitive to APR changes, coverage ratios, and price volatility. Liquidation can happen quickly. This is not financial advice. Only consider these if you fully understand the risks.
1. Looping Math (Intuition Only)
To reason about loops, it helps to define:
c= target collateral ratio (LTV as a fraction, e.g. 0.6).L = 1 / (1 − c)= effective leverage on supplied assets.B = c / (1 − c)= effective leverage on borrowed assets.Ydep= deposit APY (e.g. psXDC effective APY).Yb= borrow APR on the asset you are borrowing.
Break‑even condition for a simple loop:
Ydep > c × Yb
Approximate net APY on equity:
Ynet ≈ (L × Ydep) − (B × Yb)
These expressions are simplified and ignore path‑dependent effects, liquidation risk, and APR volatility, but they are useful for intuition.
2. psXDC Same‑Asset Loop
Goal: Lever up on psXDC yield by borrowing psXDC against psXDC.
Conceptual steps:
Deposit psXDC as collateral.
Borrow psXDC.
Deposit the borrowed psXDC back into PrimeFi.
Repeat until you reach a target HF or desired leverage.
Why this is often not optimal:
Each loop increases psXDC utilization, which may push psXDC borrow APR up.
The coverage ratio between psXDC and underlying staked XDC can fall, reducing effective yield.
In many realistic cases, same‑asset psXDC looping produces negative net APY once you factor in borrowing costs and dilution.
This kind of loop should only be considered when:
psXDC deposit APY is clearly higher than
c × psXDC borrow APR,You are prepared to watch HF and rates very closely, and
You fully accept the risk of fast liquidation.
3. psXDC → Borrow XDC → Stake → psXDC (Cross‑Asset Loop)
Often more interesting than same‑asset loops when conditions are right.
Goal: Leverage psXDC staking yield using XDC as the borrowed asset.
Conceptual steps:
Deposit psXDC as collateral.
Borrow XDC at some target LTV.
Stake the borrowed XDC using PrimeStaking → receive new psXDC.
Deposit that psXDC into PrimeFi.
Optionally repeat (loop) several times, each time watching HF and APRs.
When this can make sense:
psXDC effective APY (staking + incentives) is significantly greater than
(collateral ratio × XDC borrow APR).XDC borrowing is relatively cheap and psXDC incentives are strong.
Key risks:
XDC price volatility (big drops can rapidly compress HF).
XDC borrow APR may spike if utilization increases.
psXDC coverage ratio changes can reduce yield for everyone, including you.
Complexification of your risk: more steps, more things to watch.
4. USDC + psXDC Barbell Loop
Goal: Combine stable capital (USDC) and leveraged psXDC yield.
Conceptual structure:
Deposit both USDC and psXDC on PrimeFi.
Use psXDC as the main collateral source.
Borrow USDC.
Convert part of borrowed USDC → XDC → psXDC and deposit it.
Keep the rest of borrowed USDC as liquid safety to repay debt fast if necessary.
This creates a “barbell”:
One side: leveraged psXDC yield.
Other side: USDC liquidity available to repair Health Factor or use elsewhere.
Because of the complexity and tail‑risk nature of this structure, it should be limited to a small, high‑risk sleeve of capital, if used at all.
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