Leverage Farming

What is leverage farming?

Leverage Farming(xLP) allows users to gain leverage from Qubit while providing liquidity to DEX protocols such as PancakeSwap. Users can gain 2x or 3x liquidity to maximize yields.

How to use

For Users

This requires non-collateralized leverage smart contracts only allowed to selected asset management protocols such as PancakeBunny. Users should use one of the protocols to use xLP and there are three vaults available in PancakeBunny at the moment.
For more details of how to use it, please refer to this link.

For Developers

Qubit is a highly composable protocol which can be used as a base block to build new apps. Leverage Farming is just one example of how DeFi protocols can achieve leveraged positions through the interoperation with Qubit.
If developers would like to use Leverage Farming in their projects, please contact [email protected].

How it works

To give an example, let’s have a look at USDT-BUSD xLP on PancakeBunny(link). Suppose there is a user with 100 USDT and he wants to harness Qubit’s leverage to make additional yields.
  1. 1.
    The user deposits 100 USDT on the USDT-BUSD Leveraged Farming Vault in PancakeBunny and this allows him to borrow from Qubit.
  2. 2.
    The user borrows 150 BUSD and 50 USDT from Qubit resulting in a debt ratio of around 66.7% ((150+50)/(100+150+50)).
  3. 3.
    Leveraged BUSD-USDT LP tokens will be provided to and staked in a DEX protocol (in this case, PancakeSwap).
  4. 4.
    Rewards will be given for providing liquidity and staking LP tokens.
    1. 1.
      LP rewards for providing liquidity.
    2. 2.
      Yield farming rewards for staking LP tokens.
The entire profit is for the user except for 3% of yield farming rewards accumulated in the Qubit reserve contract. The profit can be calculated as the following:
Profit=LPrewards+(YieldFarmingRewards0.97)+QubitBorrowRewardsQubitBorowInterestProfit= LP rewards + (Yield FarmingRewards*0.97)+QubitBorrowRewards-QubitBorowInterest
Note that swap fee or price impact are not considered in the calculation.