Yak Guides are Yield Yak community members who dedicate time to helping the community navigate their way through Yield Yak and the Avalanche defi ecosystem.
With the recent announcement of OrcaDAO’s partnership with Yield Yak, Yakheads can now deposit their compounding YRT assets from Yield Yak on the OrcaDAO platform.
What does this mean for you and what opportunities does it open up?
Yak Guides are here to take you through the details. But first, if you don’t yet know how Yield Yak and OrcaDAO work, let Yak Friend and Avalanche defi expert Cedernet get you up to speed with a walkthrough:
Important: Managing your Liquidation Risk
Now that certain YRT (Yak Receipt Tokens, which you receive for depositing into any Yield Yak strategy) can be used as collateral, some exciting farming strategies to earn extra yield have just been opened up.
However, always manage your liquidation risk. We recommend reading OrcaDAO’s lending guide which includes how to maintain a safe and healthy LTV ratio.
Once you’re ready to roll up your sleeves, here are a few strategies that can be employed to put your defi dollars to work for you.
Strategy 1: Leveraged folding strategy
This strategy is a simple leverage strategy to increase your AVAX farming balance. The same concept applies for WETH.e, WBTC.e, LINK.e and JOE.
- Deposit AVAX into the Aave AVAX farm or Benqi AVAX farm
- Use the YRT you receive as collateral to take out an AVAI loan
- Swap your borrowed AVAI for AVAX on YY Swap
- Deposit your AVAX back into the farm from Step 1 and repeat
Strategy 2: Leveraged stablecoin strategy
This strategy earns on two assets, AVAX and stablecoins. Deposit your AVAX (or any single asset) for a collateral-eligible YRT token, borrow AVAI, swap half to USDC.e to deposit in a stablecoin farm on YY.
- Deposit AVAX into the Aave AVAX farm or Benqi AVAX farm
- Use the YRT you receive as collateral to take out an AVAI loan
- Swap 50% of your AVAI to USDC.e on YY Swap
- Deposit your AVAI and USDC on Pangolin, which will give you PGL tokens
- Deposit your PGL on the AVAI/USDC.e farm
Your AVAX will already be auto-compounding and you are earning further yield on your AVAI/USDC.e.
Strategy 3: Leveraged LP strategy
With this strategy you can farm ORCA-AVAX. This strategy has a higher risk / reward ratio than the two strategies above as the LP position could become worth less than your outstanding debt. Deposit AVAX (or any single asset) for a collateral-eligible YRT token, borrow AVAI, swap half to ORCA and half to AVAX to deposit in an LP farm on YY.
- Deposit AVAX into the Aave AVAX farm or Benqi AVAX farm
- Use the YRT you receive as collateral to take out an AVAI loan
- Swap AVAI to ORCA and AVAX on YY Swap
- Deposit your ORCA and AVAX on Pangolin
- Deposit your PGL on the ORCA-AVAX farm
Disclaimer: none of the below is financial advice. Do your own research. There is always smart contract risk, the risk of stable assets losing their pegs, and assets going up and down in value.
About Yield Yak
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About OrcaDAO
OrcaDAO is an Avalanche native protocol designed to offer and optimize a Stablecoin (AVAI), and Ownership/Governance token (ORCA) pair that allow for lending using crypto collateral at 0% interest. The protocol centers around the production, maintenance, and sustained equilibrium of AVAI around a stable value, used by the DeFi community for a multitude of use cases — such as loaning/borrowing and yield farming — with a high level of confidence.
OrcaDAO has been thoughtfully designed and optimized to be flexible for Avalanche users’ ever-changing needs, including: no lower-bounds on multiple collateral options, partial liquidations allowing for more forgivable loan processes, a firm peg designed to float within a cent of $1.00USD, and a triple bottom line focused revenue sharing initiative in support of marine/ocean conservation and restoration efforts via the OrcaDAO SeaFund
