A comprehensive understanding of over-lending project-PTD
If you want to get excess returns, you want to get a higher utilization rate of funds. Please watch it patiently! (For newbies, only check but not operate)
Key words：Greatly increase the utilization rate of funds; about 4 times the efficiency of traditional DEFI lending; 30% rise and fall risk can be controlled; essential tools.
Let me analyze step by step:
1.Greatly increase the utilization rate of funds
Take an example, in MDEX, the APY of ETH/USDT is 300%, a lot of people are assured to be attracted, but they don't want to buy ETH, or bind as LP to farm.
Generally, those people will go to the lending platform to pledge USDT and borrow ETH, then bind with USDT to be LP.
After then, the net profit will deduct the interest to prevent lending liquidation. The funds' utilization is about 50%-60%, and the APY is 300%, and the revenue you can get actually is about 150%. That situation is like food, tasteless but pity to abandon.
PTD can perfectly solve the funds' utilization rate problem stated above.
PTD allows you to use USDT to borrow one multiple ETH to farm on the leverage zone, the APY as to USDT=600%-10% (interest)=590%, which is about 4 times 150%.
That is why I said PTD can greatly increase the utilization rate of funds, which is much better than other lend and borrow platforms.
I guess now you must wonder that will your position be liquidated if you borrow 1 multiple currencies, right?
Please continue the book!
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2.Don't be afraid of leverage
The leverage of PTD differs from the traditional leverage in exchanges, you have to clear out your old logic pattern.
The reason why PTD is not a traditional leverage tool is that DEX impermanent design.
We do not explain here use USDT to borrow. (You can check the 3rd phase directly, and come back later)
Here I want to let you know how to use a coin to borrow USDT, how to use PTD professionally.
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If you are a holder of a certain currency, and want to hold in a long term, such as HT.
But the price of HT did not rise in a short term, you want to invest with those HT, then you can borrow 1x USDT and bind it to farm.
For example, HT, which now has 10, 000 USDT value, borrows 10, 000 USDT. Suppose the price of HT is 10 and the quantity is 1000. When the HT rises by 30%, according to the calculation of impermanent losses, the price of the HT is 13, the currency is 877.058 and the USDT is 11401.75.
Let's calculate the income!
11401.75-10000=1401.75（you get more USDT after repayment）
1401.75/13=107.8269（use USDT to buy HT back）
（107.8269+877.058）*13=984.885*13=12803.50（If you repay the loan, you will earn about 28.03%. Please note that if you hold the HT, you will earn 30%.）
Holding HT to borrow twice as much as USDT to group LP, rose in the process, there is no risk of liquidation. DEX continues to sell HT, and enjoy farming profits at the same time!
（The HT/USDT leverage pool in PTD has an APY of 100%, which means that if the price of HT remains the same, 100% of the principal can be dug out in a year.）
If you don't want to buy a few dollars after a big increase of 30%, you can buy the profits back to HT. Keep farming!
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Let's take a look at the drop of 30%.
For example, the HT, with 10, 000 USDT value on hand borrows 10 USDT, and assumes that the price of HT is 10, and the quantity is 1000. When HT falls by 30%, according to the calculation of impermanent losses, the HT price is 7, the coin is 1195.228 and the USDT is 8366.6.
Let's calculate the income!
10000-8366.6=1633.4（the USDT need to repay）
1633.4/7=233.343（the quantity of the HT need to sell）
（1195.228-233.343）*7=961.885*7=6733.195 （If you repay the loan, you will lose about 32.67%. (please note that if you hold the HT, you will lose 30%.）
HT fell 30%, according to the above operation, only a loss of 2 points. But farming gains can constantly make up for losses. Check this carefully by yourself.
Note 1：It is best to control the rise and fall within 30%, and if you exceed it, you need to reconfigure it. For example, if it rises by 30%, less money can be bought back with more USDT to keep the currency standard. Down 30%, sell more than the bottom of the currency into USDT, as far as possible to maintain the number of currency standard. The impermanent loss can be effectively controlled.
Note 2：Holding currency to borrow twice the USDT, that is, twice the leverage operation, in the process of decline, when the cost drop is more than 65%, we should pay attention to the risk value of 100%, we must reduce the leverage, or redeem the leverage, otherwise the expected decline of about 70.6% will be liquidated.
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3.Talk about holding USDT to borrow currency
Let's continue with the 1st phase, will there a liquidation if you borrow twice currency?
Let's take HT as an example, if we now have 10, 000 USDT, to borrow 10, 000 USDT worth of HT, assuming that the price of HT is 10, and the quantity is 1000.
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If the HT rises to 13, an increase of 30%, calculated by the impermanent loss table, at this time, the USDT becomes 11401.7 and the number of HT becomes 877.058. At this time, the USDT has become more and more, so we need to buy back the HT for repayment.
The calculation method is below:
1000-877.058=122.942（the HT needs to repay）
11401.7-122.942*13=9803.5（current principal）
Since the principal is 10, 000 USDT, when HT increases by 30%, the loss is less than 2 points at 1.965%. But leveraged mining can constantly make up for losses. Check this yourself.
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If the HT falls to 7, the decline is 30%, calculated by the impermanent loss table, at this time, the USDT becomes 8366.6 and the number of HT becomes 1195.23. At this time, you only want to hold the USDT, and sell the extra HT.
The calculation method is as below:
（1195.23-1000）*7+8366.6=9733.21（current principal）
The loss is 2.6679% because the principal is 10, 000 USDT,. But PTD 's leveraged farming can constantly make up for losses. Check this yourself.
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Note 1：It is best to control the rise and fall within 30%, and if you exceed it, you need to reconfigure it. There is no emphasis on interest in the article because it is not high, you can add your own calculation.
Note 2：Holding USDT borrowed twice the currency, the decline of more than 99% + (interest is the currency-based) is not expected to be liquidated, but the increase is more than 240% + (that is, from 10 to 34) close to liquidation, need to redeem leverage, reconfiguration, can not be because of profits, give up the vigilance of value at risk! Here I do not plan to calculate in detail.
Note 3：In fact, 1.5 times leverage is also worth calculating, and the risk is a little bit.
Note 4：When you borrow money with USDT, be sure to count the currency you borrowed. Do not use USDT to borrow USDT, or you will be deducted the swap fee of about 0.3% of MDEXSWAP.
In the meantime, if you use the currency to borrow USDT, remember to count the USDT.
PTD is a great tool, which worth your deep learning.
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