#7. Strategy guide: How to utilize your Bitcoin for 18% profit.

Oct 29, 2021

Since #dev DeFi is a lending & borrowing protocol, lend one asset to borrow and make profit from another asset is an essential use case that #dev DeFi offers.

For over 5 months after launching, #dev DeFi has finally decided to support Bitcoin (BTC) as a collateralizable asset. Let’s see how you can utilize your Bitcoin using #dev DeFi.

1. Deposit your Bitcoin to #dev DeFi, using Alpaca vault to earn 1.47% supply interest rates.

Learn more about Alpaca vaults.

2. Use deposited Bitcoin as collateral to borrow CAKE from Genesis vault.

To secure your position from liquidation, you should borrow CAKE at a save Loan-to-value ratio. Bring out your own research about price moving and calculation to pick a suitable ratio. In this article, I will use a Loan-to-value ratio of 30%.

CAKE borrow APR ~ 18.56%

3. Deposit CAKE to Auto CAKE pool on Pancakeswap (https://pancakeswap.finance/pools)

Stake APY = 74%

Your actual yield can be estimated after this formula:

Estimated APY = (74% – 18.56%)*30% + 1.47% = 18.01%

Your actual yield will come close to 18.01% but not exactly since the rate will be affected by price volatility. And remember to repay interest accrued whenever it gets too high, which threatens your position.

Hope you will enjoy it!


Importance notice:

This strategy uses a 30% Loan-to-value ratio which is a safe ratio, in general, to return an appropriate 18% profit from Bitcoin, you should choose any ratio that you are confident of.

Each strategy is just a use case of #dev DeFi and not financial advice. Apply these strategies at your own risk.