#3. Strategy guide: Open a Short position on BNB
Creating a Short/Long position is the most basic strategy when using lending protocol, in this case I’m using #dev and Venus to create a short position. You can borrow BNB with BUSD as collateral on #dev. Here is how my strategy work.
Strategy #3: Open a Short position on BNB
- Deposit BUSD as collateral to #dev, around 10,000 BUSD in my case.
- Wait until BNB/BUSD pump (e.g 320), take a loan of 9.37 BNB from #dev. In this case I borrowed at 30% loan-to-collateral ratio.
- Immediately convert borrowed BNB to BUSD, 9.37 BNB = ~3.000 BUSD.
- Deposit BUSD into Venus to earn 5.2% / year.
- Wail until BNB/BUSD dump (e.g 280), withdraw BUSD from Venus and buy back BNB at 280 => 10.71 BNB.
- Repay the loan of 9.37 BNB.
Profit = 10.71–9.37 = 1.34 BNB
Borrow APR on #dev = 2.5%
Supply APY on Venus = 5.2%
So technically you can earn extra 5.2%-2.5%= 2.7% / year. In my case I waited 2 weeks to clear all my positions so it’s around 3 BUSD additionally added to my profit :))
Important notice:
- All strategies are collected from users of #dev DeFi.
- Each strategy is just a use case of #dev DeFi and not financial advice. Apply these strategies at your own risk.
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