Using Planet To Earn Up To 40% APY On Stablecoins: A Step-By-Step Guide & Case Study
With the launch of aUST, there’s some incredible strategies that most aren’t taking advantage of. In this example we’ll be supplying aUST & borrowing UST. Keep in mind, this strategy can be applied, borrowing any other stablecoins on Green Planet as well. The lower the borrow rate, the higher net APY you can earn with this strategy.
Here’s the simple steps to leverage up your aUST:
Step 1: Supply aUST on Green Planet
Step 2: Borrow UST on Green Planet
Step 3: Bridge UST to Terra
Step 4: Deposit UST to get aUST
Step 5: Bridge aUST back to your BSC wallet
Step 6: Supply aUST on Green Planet
We’ll be looking to reduce the number of steps soon by creating an aUST-UST liquidity pool as well as a potential strategy to automate the bridging for everyone.
Pro Tip: Remember, the best borrow rates are available to those supplying enough GAMMA to qualify for Level 3. To qualify for Level 3, the value of your GAMMA supplied needs to equal at least 10% of the value of your collateral on Green Planet.
At Level 3, the current net borrow APY for UST = -7.16%.
Let’s visualize each step
Step 1: Supply aUST on Green Planet
Step 2: Borrow UST on Green Planet
Borrow rates are typically 20%–60% better for those who reach level 3 by supplying GAMMA.
Step 3: Bridge UST (BEP20) to Terra here
This bridge is typically called “shuttle”.
Step 4: Deposit UST (Terra) to get aUST (Terra)
To use Anchor, you’ll need to have a Terra Station wallet. You can find it here.
Step 5: Bridge aUST back to your BSC wallet — https://portalbridge.com/
You’ll need to add aUST when you choose “select token”.
aUST Contract (Terra): terra1hzh9vpxhsk8253se0vv5jj6etdvxu3nv8z07zu
Both LUNA & aUST on Planet, are wormhole assets and can be used on Portal.
Let’s do a $10,000 case study
For the sake of time, doing a full “loop” would be taking the borrowed stablecoin converting it to aUST and then supplying it back on Green Planet. For this case study, each time I borrow stablecoins, I’m clicking MAX so that I borrow up to a borrow usage of 90%.
Supply $10,000 aUST — Earn $2,000 (20% APY )
Borrow $7,200 UST — Pay $515.51/yr (-7.16% APY)
Bridge & Supply $7,200 aUST — Earn $1440 (20% APY)
1st Loop 🔁
- Borrow Usage = 52.32%
- Net APY = 29.24% ($2,924.49)
- Supplied = $17,200
- Borrowed = $7,200
Borrow $5,184 UST— Pay $371.17 (-7.16% APY)
Bridge & Supply $5,184 aUST — Earn $1,036.80 (20% APY)
2nd Loop 🔁
- Borrow Usage = 69.15%
- Net APY = 35.89% ($3,589.63)
- Supplied = $22,384
- Borrowed = $12,384
Borrow $3,732.48 UST — Pay $267.24 (-7.16% APY)
Bridge & Supply $3,732.48 aUST — Earn $746.49 (20% APY)
3rd Loop 🔁
- Borrow Usage = 77.13%
- Net APY = 40.68% ($4,068.88)
- Supplied =$26,116
- Borrowed = $16,116
Borrow $2,687.52 UST — Pay $192.42 (-7.16% APY)
Bridge & Supply $2,687.52 UST — Earn $537.50 (20% APY)
4th Loop 🔁
- Borrow Usage = 81.60%
- Net APY = 44.13% ($4,413.96)
- Supplied =$28,803
- Borrowed = $18,803
So even at 81.60% borrow usage, there’s still plenty of room to borrow more stables and convert them to aUST.
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A Few Things To Keep In Mind
Any time you’re using leverage it’s important to take it slow and make sure you understand what you’re doing to safely avoid facing a liquidation penalty.
In this case study we used UST which at the time of writing costs -7.16% APY to borrow. If you were to do the same strategy but with a stablecoin that’s cheaper to borrow, you could massively increase your Net APY.
The beautiful part of this strategy is, if you have aUST supplied earning 20%+ and the stablecoins you are borrowing, are cheaper than 20%, your borrow usage should continue to reduce over time, allowing you to continue to borrow more. This happens when the value of your collateral is increasing faster than the interest on your borrowed debt.
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