If you are starting with NFT's you'll already know that they are not very liquid. What i mean is that unlike ADA which can be used everywhere, NFT's must first be converted into a liquid asset(like ADA). The common way to do this is to use your NFT's as collateral, by doing so we are able to access some of the assets value to use elsewhere whilst retaining ownership of the asset.

We have a couple options to choose from, lets get into it.

Accessing the ADA in your NFT's

The above video shows the [FluidTokens](https://app.fluidtokens.com/) website and connecting Nami wallet. Once connected it the video goes on to show how to 'Request Loan' with information on the process below.

## How to

After clicking the **Request Loan** button it opens the create loan flow, here we start by selecting our Collateral assets. The beauty of fluid token is that you have freedom to mix and match assets you use as collateral. You can use a single NFT, multiple NFT's from the same collection or even multiple NFT's from different collections.

> Tip: Floor NFT's make better collateral than rarer NFT's, this is because the information making the rarer NFT's valuable to the asset owner and/or community should be assumed as being unknown to the lender.

We then choose our **Loan currency** and **Amount**. While Fluid gives us various options, liquidity is likely limited and my personal experience is that ADA is the best currency to borrow, after all there's plenty of things we can do with ADA.

Next we select our **Interest Currency** and **Amount**. This is the amount of interest you are paying the Lender when you close the loan. If you use Loan currency other than ADA, I would try to ensure my Loan Currency and Interest Currency are at least the same.

The final input we have is the **Duration** of the loan, this can be done in days or weeks. The longer the loan request, the bigger the risk to the lender so factor that in when deciding the interest you offer.

Once all inputs are completed, we see a **Confirm Loan Details** page before we are prompted to sign the transaction and await the loan to be filled.

Once a loan has been filled, you received thr Loan Currency and can monitor remaining time of loan from the **Loans Borrowed** section of your profile.

## Things to consider
- Requesting a loan in this way means that you are using your NFT as collateral for the asset borrowed. Your **risk** is from being unable to repay the principle with interest by the due date.
- Defaulting on a loan would result in the **Loss** of your Collateral.
- This feature works on a Peer to Peer(P2P) basis, as a result your loan needs to be appealing to potential lenders. A 70% LtFV should be sufficient(Loan to Floor Value)





Using FluidTokens with NFT's

The above video shows the [Levvy.fi](https://levvy.fi/) website and connecting with Nami wallet. Once connected it the video goes on to show how to 'Start Borrowing' with information on the process. 

There are a few differences comparing Fluid that we just covered to Fluid so be sure to check the **Things to consider** section below.

## How to

On Levvy, our loan choices are determined by the collctions shown on the site.

For the sake of this course elts assume I own an Ape Society NFT and chose the first option as I did in the video, the duration is set at 14 days and the highest I would be able to get is 3,400 ADA. This would be at a cost of 4.21% of the Loan Value.

If I agree with the Loan terms I can select an NFT of that collection within the display box befpre signing the transaction.

Levvy also shows the amount of ADA currently in each pool, this can give a good indication of which collections are most liquid.

## Things to consider
- Requesting a loan in this way means that you are using your NFT as collateral for the asset borrowed. Your **risk** is from being unable to repay the principle with interest by the due date.
- Defaulting on a loan would result in the **Loss** of your Collateral.
- Levvy works with a Peer 2 Pool(P2Pool) model. As a user this means that rather than picking our assets for loan collateral like we do on Fluid, we are provided with liquidity pools that are determined by the asset used as collateral.
- The benefit of the P2Pool model is that if you are in a position of holding assets with sufficient pool liquidity, you can tap into that liquidity more or less instantly whereas with the P2P model used with Fluid you must wait for the loan to be filled.
- Levvy only allows for 7 or 14 days loan terms.
- Levvy is also a Lending protocol for Cardano Native Assets but we'll come back to that side of it later in the course.





Using Levvy with NFT's

Starting with NFT's

Now we have a bag of ADA so what can we do with it?

The biggest deciding factor is going to be, are we long on ADA or not?

If we are, we are going to want to keep some exposure to ADA's price appreciation; this will influence our strategies. For the sake of time and considering this is a CARDANO DeFi strategies course we're going to assume the majority of us taking this course are long on ADA.

>There will be some strategies in this guide that apply where we are short on ADA.

Let's get into it.

Introduction

The above video shows the [Liqwid](https://app.liqwid.finance) website and connecting Nami wallet. Once connected we navigate to the supply section, selecting ADA before entering the amount and clicking the "supply" button to build the transaction. Once you have read the 'How to' section be sure to check out the 'Things to consider' section also.

> Liqwid is a Lending protocol with a pooled model like Aave on Ethereum. User deposit assets, use them as collateral to borrow other assets available.

## How to

Supplying ADA in Liqwid to earns a yield from three streams. 
- The **first** comes from ada in the pool this is not being borrowed, this ADA is staked to a Private Liqwid pool earning cardano network staking rewards . 
- The **second** comes from interest that is repaid from ADA borrowers when repaying loan. 
- The **third** comes from the LQ incentives for suppliers in the tokenomics. 

You will notice in the video when looking at the supply side APY column that there are two shown. The top figure is paid in ADA made up from stream one and two, the bottom figure is from stream 3.

Once you have supplied ADA you will hace received qADA tokens. These represent your share of assets in the given pool and the means in which you accrue your yield from stream one and two.

Rewards from stream three are paid in the platforms native LQ token. LW rewards for supplying assets are paid every monday with a 1 week delay. 

> For example if you supply ADA today(15th November 2023), your first rewards would be claimable from 4pm UTC on 27th November 2023, covering the period 15th-19th November 2023. If rassets remain supplied, rewards would then be weekly covering a full week. 


## Things to consider
- Supplying assets and holding the qToken has no liquidation risk.
- Risk of liquidiation is only introduced when you use your qTokens as collateral (covered in Part 2)
- Suppliers earn 80% of all of the interest repayments (10% goes to Market Reserve, 10% to LQ stakers)



Using Liqwid Finance with ADA (Part 1)

Having covered Part 1 you will be familiar with the idea of supplying an Asset to Liqwid and receiving the qToken of the asset supplied.

The above video covers the **create borrow** feature of Liqwid.

## How to

As you can see in the video we first navigate to the borrow side of the Liqwid app and select create borrow for the asset we wish to borrow.


This will open the borrow modal, from here we select our qToken or qTokens we wish to use as collateral. 

When an amount of qTokens has been entered, a USD value for your collateral will be shown. 

Once we know the value of our collateral we can then see the maximum available to borrow of our chosen asset.

As you configure your Collateral and Loan Amount you will notice that your Health Factor changes. 

> It is not advised to borrow the maximum available as this opens a loan with the minimum acceptable health factor, with the minimum health factor there is an increaed risk of liquidation.

Using Liqwid Finance with ADA (Part 2)

In part one and two we covered supplying assets, receiving qTokens and borrowing with qTokens as collateral so we'll assume that's now known.

## Understanding Liqwid Reward Structure

Due to the Liqwid Finance Governance [Proposal 8](https://app.liqwid.finance/governance/proposal/8), the majority of LQ rewards emitted each week are paid to suppliers of Stablecoins.

This doesn't mean we have to miss out on the higher APR's simply because we are long on ADA.

To keep our expsure to ADA's price appreciation we dont sell, with Liqwid we use it as collateral.

## Maximising your yield

Once we have supplied our ADA we can then create our first borrow.

If we are trying to get the best returns we should borrow a stablecoin that can be used as collateral. Currently our collateral options for stablecoins in Liqwid leave only DJED.

Once we have recieved the DJED, we then supply it this time we're the earning the higher APR. 

If we want to increase our returns we can also use the supplied DJED as collateral to create another borrow. 

> At this point in our scenario we currently have two supplies and one borrow. This means we are earning on our two supplies but only one is earning the higher APR for stablecoins while the ADA supply earns less. The current APY available on stables right now mean you would likely be net positive for borrowing meaning you are earning more than you are paying in interest.

If we want to go further, assuming more risk, we could do one of two things;

**1.** The first option would be to use our DJED as collateral to borrow another stablecoin and again supply it to Liqwid to again earn the higher APR's offered.

> If you opt to include the above step, I would advise opting for a stablecoin with lowest utilisation rate for the lowest interest rate.

**2.** The second option would be referred to as **Folding**. To do this we would use our DJED as collateral to borrow ADA. The ADA we borrowed can then be supplied back into Liqwid, increasing our healthfactor allowing us to borrow more, this can then be supplied again, etc. Doing this allows us to supply more value than we originally started with.

## Things to consider
- Borrowing DJED with ADA as collateral means you have a relatively stable value of debt, but you would need to be concious of the value of ADA. If ADA price increases so does your health factor, but if ADA price falls your health factor decreases.
- Supplying Stablecoins to borrow Stablecoins means that you are able to get away with a lower health factor due to the idea that they are more stable at their dollar pegs.
- Liqwid's variable interest rates are determined by the markets utilisation rate.*(The utilisation rate is the percentage of assets borrowed from the total assets supplied per market)*

Liqwid Strategy

The above video shows the [Indigo](https://app.indigoprotocol.io/) website and connecting Nami wallet. The video continues with the steps to open a CDP or Collateralized Debt Position. This basically means that we are accepting a debt in the form of iAsset that we mint, collateralizing our ADA to do so. The next section covers the steps shown in the video.

## How to

Now connected, we navigate to the CDP section of Indigo.

Once here, we can open a CDP by clicking the **Open CDP** button.

From here we have the some options to configure our CDP.

> The configuration you set here is **Important**

First we choose our iAsset. This is the asset we receive for using our ADA as collateral.

We then need to enter the **Collateral Amount**, this is the amount of ADA we wish to use.

We then decide on our **Collateral Ratio**, this determines how much we overcollateralize our debt position.

You will notice in the video, when entering a Collateral Amount and Collateral Ratio that the **iAsset Amount** field updates automatically. Indigo is a pleasure to use in this way as all three fields we can change, update the others allow us to set the terms we are comfortable with.

Once you have signed the transaction and minted your iAsset, **that's it**.

## Things to consider
- Indigo will show you the price at which ADA needs to fall to for you to be liquidated.
- A Protocol Fee of 2% is incurred when **withdrawing collateral**, which is computed according to the amount of collateral to be withdrawn.
- A Protocol Fee of 2% is incurred when **closing a CDP**, which is computed according to the total amount of collateral in the CDP.

> Tip: You dont actually have to ever close your CDP, this can be done as a means of avoiding the 2% closing fee.





Using Indigo with ADA

In our 'Using Indigo' lesson we covered basics of opening a CDP, so the same as with the Liqwid Strategy lesson we're skipping over the ins and outs of the actions and focusing on the strategy assuming the steps to carry out the strategy are known.

## Understanding Indigo Reward Structure

Yields within Indigo come primarily from their Stability pools. Here's how they work.

As CDP liquidation occurs, some of your deposited iAssets will be burned. In exchange, you will receive a pro-rata share of ADA collateral from each liquidated CDP, which will be claimed as rewards automatically.

## Maximising your yield

As stated previously, yields in Indigo come from their stability pool but we can use Indigo's CDP features to our advantage without depositing into the stability pools.

A popular strategy incorporating Indigo is using it to maximise returns when participating in IPSO's.

To do this a user would first deposit their ADA into Indigo to mint iUSD. This would be done with a sufficient Collateral Ratio to avoid liquidation dependant on what we expect ADA's price to do for the duration of time we are collateralizing our ADA.

Once we have minted iUSD, we then sell the iUSD for more ADA, that ADA can then be added to the CDP as more collateral. This allows us to mint more iUSD and repeating the process until we reach a point where we cannot mint any more iUSD without reducing collateral ration.

The maximising returns for ISPO's or ADA staking related rewards schemes is unique to Indigo thanks to CDP's remaining under our stake ownership meaning we continue to earn the staking rewards on our collateralized ADA. 

Another potential strategy would be to mint iUSD and then convert your iUSD to DJED on a DEX. This would likely have to be through iUSD/ADA pair, then the DJED/ADA pair leading back into the strategy covered in Liqwid Strategy lesson. The benefit of this route is that we continue to earn our staking rewards on our collateral ADA in addition to having DJED we can earn and further collateralize elsewhere.

## Things to consider
- iUSD is below its $1 peg more than it is above or at it, this needs to be considered.
- Minting iUSD when it is below peg would see your Collateral Ratio drop as it returned back to its $1 peg unless further ADA is added as Collateral.

Fees
- Opening a Stability Pool account incurs a 5 ADA fee
- Depositing iAssets to an existing Stability Pool incurs an adjustment fee of 1 ADA
- Depositing iAssets to an existing Stability account incurs a 2% protocol fee taken from the total amount of ADA rewards you are owed.
- Partially withdrawing iAseets from a Stability Pool account incurs an adjustment fee of 1 ADA.
- Partially withdrawing iAseets also incurs a 2% protocol fee taken from the total amount of ADA rewards you are owed.
- A full withdrawal of iAssets from your Stability Pool account, referred to as closing your account incurs a 2% protocol fee taken from the total amount of ADA rewards you are owed.

Indigo Strategy

> This section lesson content is supported with input from members of Lenfi Discord and from conversations with [Thabit](https://twitter.com/thabit187), an avid supporting of the Lenfi protocol.

In the above video you see [Lenfi's](https://app.aada.finance) website as I connect with Nami wallet. You will notice that the website is branded as AADA, this was what Lenfi was called before it rebranded and became Lenfi. Going forward we will only refer to it as **Lenfi**.

We cover the steps shown in the video below, followed by some things to consider.

## How to

Like other platforms we have covered in previous lessons, Lenfi operates with a P2P model which you may have noticed from the video.

A lender coming to Lenfi with ADA would want to navigate to the **Liquidity Requests** section. 

This is where users requests are found with each showing some key details;
- Loan (the assets requested by borrower)
- Collateral (the assets used as collateral for each request)
- Interest (the amount earned IF borrower repays)
- Term (the loan duration)
- Health Factor (the health of the loan, if your health factor was 1.0 your debt would be equal value to your collateral)

If a loan request in the list is one you are happy with then you cap deposit the Loan asset requested to fill the loan.

## Things to consider
- Loans on Lenfi have the benefit of the loan terms being set and unchanging through it the duration.
- There are no rewards emitted by Lenfi currently for market participation, collateral used in the platform does not earn anything.

Using Lenfi with ADA

So now we know the basics of using Lenfi and we know that there's no rewards emitted as part of their tokenomics so how can earn a yield? The answer lies in how we use the protocol. 

We'll cover how to use Lenfi to Short ADA in strategy one and how to Long ADA in strategy two.

> Remember: because Lenfi is a P2P lending protocol your loan request will likely not be filled instantly or it may not be filled at all. If this happens we MUST consider the time impact it has, we may miss the pumps or dumps we expected and risk losing value from our starting point.

## Strategy One

So here we are, we're Short on ADA meaning we think its going to depreciated in value. How can we profit?

To do this with Lenfi we first need to move to an asset we think is more stable in the term we're considering than ADA.

An option would be use the ADA to buy stablecoins.

We can then use those stablecoins as collateral when we request an ADA loan. (it might seem backward to borrow ADA when we're short on it but bare with me)

Next, we're going to want swap the ADA we borrowed for a stablecoin.

Now we have an outstanding debt in Lenfi for a specific amount of ADA (the amount to be repaid doesnt change) but we took those stablecoins and bought ADA.

If ADA depreciates in value like we though it would, we then buy enough ADA required to close our Lenfi loan.

Once we have closed our loan, any excess you have after repaying is your profit.

### Things to consider
- We are betting that the market will go a certain way, dont be surprised if it doesnt go the way you expected.

## Strategy Two

So here we are again, but this time we're Long on ADA as we think its going to appreciate in value. How can we profit?

The way we use Lenfi to be in a Long position on ADA would be to use our ADA as collateral and just like Strategy One, we request to borrow stablecoins.

If our loan is filled, we find the dex with the best price and use our borrowed stablecoins to buy ADA.

Now we have an outstanding debt in Lenfi denominated in stablecoins which wont change value but we took those stablecoins and bought ADA

If ADA appreciates in value like we though it would, we then buy enough of the stablecoin required to close our Lenfi loan.

Once we have closed our loan, any excess you have after repaying is your profit.

### Things to consider
- Same as before, we are betting that the market will go a certain way, dont be surprised if it doesnt go the way you expected.
- If you enter a long position and at a price point where you are in profit, stop loss can be a great tool to minimse losses in the event price falls.

Lenfi Strategy

In the **Starting with NFT's** section we covered using Fluid to access some of the ADA value in our NFTs. In this section, we're back with Fluid but this time as a Lender.

You will see in the above video that from Fluid home page we access the '**Lend**' section. This is where users Loan requests are shown. As we previously mentioned Fluid works under a P2P model. Users reques loans, potential lenders like us in this scenario review and fill them if we are happy with the terms.

## How To

If there is a loan request with terms that you are happy with, we would click the **Lend** button.

After clicking the Lend button, we are taken to the Loan Request page. 

From the Loan Request page we can view;
- Collateral Asset (Assets if more than one is used as collateral)
- Loan Amount.
- Interest Amount.
- Loan Duration.
- Profit Amount
- Global floor price where NFT's are used as collateral.

It is from this information that we determine whether or not a loan request is worth filling.

## Things to consider
- Borrowers are trying to get the most value when asking for loans, as a result not all loans show favourable terms for a lender.
- As a borrower in the previous fluid lessons we mentioned 70% LtFV should be sufficient, this is the same level you should be looking for as a lender.
- The lower a LtFV a loan has, the less risk the Lender is accepting. This is because if the borrower defaults on a loan with 50% LtFV, the assets you lose when borrower defaults are only 50% of the floor price of the NFT you receive as the loans collateral.

Using Fluid with ADA

FluidTokens [Boosted Stake](https://app.fluidtokens.com/stake-boost/) has created an opportunity for liquidity providers to earn a risk free return that outperforms ADA's base staking rewards, and for borrowers the ability to increase their stake delegation, perfect for ISPO's where staked amount is what determines rewards.

## How To

First we decide whether we are going to borrow stake or whether we are going to provide liquidity. We'll cover both below.

As a borrower, we simply need to enter the ADA amount to be borrowed and the number of Epochs we want to borrow for. Once we have input this information we click continue and are shown the details of the loan including the APR to be paid which you pay when you open the loan.

> There are some minimum parameters for borrowing that include; 
> - 10,000 ADA minimum amount borrowed.
> - 2 Epoch minimum loan term.

As a liquidity provider, we enter the same information, in addition to selecting the minimum APR we're happy to accept.

> There are some minimum parameters for providing that include;
>- 1,000 ADA minimum amount provided.
>- 5% minimum APR earned.
>- 6 Epoch minimum term of supplying assets

## Things to consider
- Borrowers are not able to spend the ADA they borrow, only stake it.
- APR paid by borrowers is paid when loan is opened.
- The APR you pay as a borrower is highly dependant on the liquidity available.
- ADA staking rewards at the current rate mean using boosted stake as a borrower really only makes sense when the staking rewards your earning are sufficient, usually due to an ISPO.

Using Fluid's Boosted Stake with ADA

Using Fluid as a lender, the first question you should ask yourself before filling each loan is: "If the borrower default, am i happy owning this NFT? or if they default can i sell it easily?"

If the answer is No, dont lend.

## Maximising your yield

> Fluid is a great platform and if you are bullish on certain NFT collections, Fluid can act as a way of accquiring those NFT's for a discount in the event borrowers default.

Defining a strategy for using Fluid as an ADA lender is difficult due as Loans Request are frequently being filled and unfavourable loans left in place meaning the landscape we must navigate is forever changing.

Thats being said, our yield potential here comes from successfully navigating loan requests.

## Strategy (Boosted Stake - Borrower)

As we mentioned during the How to, using fluids boosted stake really only makes sense if you are also participating in an ISPO.

You can see a list of active ISPO's [here](https://www.gomaestro.org/marketplace) provided by Maestro

## Strategy (Boosted Stake - Liquidity Provider)

Boosted stake as a liquidity provider is where the product really shines. 

The fact that stake borrowers are unable to spend the ADA is probably the single best thing about this feature to a liquidity provider as it means there is zero chance of default. Add in the that the APR paid by borrower is paid upfront and you continue to earn staking rewards until the ADA is borrowed, this really is one of the safest returns you can get.

Looking at the Total Liquidity Available spread, most ADA suppliers are looking for an APR of 10% or more. 

I would supply ADA at 7.5-8% to undercut the majority, ensuring my ADA supplied is borrowed first.

FluidTokens Strategy

In the **Starting with NFT's** section we covered using Levvy to access some of the ADA value in our NFTs. In this section, we're back with Levvy but this time as a Lender.

You wil see in the above video that using Levvy as a lender is easy, we simply move the switch from Borrow to Lend. We will go over the steps covered in the video in the **How to** section below.

You will also see that when you hover over each of the orange question marks in Levvy it gives us a tool tip to understand what each figure means.

## How To

On Levvy our lending options are determined by the NFT collections shown. 

Once we have a collection we're happy owning if borrower defaults we click the **Lend** button.

This opens up the next screen here we enter the offer price we are willing to loan and the number of offers.

Levvy works like this, any ADA holder can add a lend offer to that collections liquidity pool, borrowers who own an NFT from the collection can borrow from the pool, receiving the highers user offer that is in the pool at the time they request it.

Once we have loaned our ADA, the manage tab allows us to **foreclose** loans which have passed expiration date without repayment (borrower defaulted) and **claim** which is collecting payments from loans which have been closed and interest paid.

## Things to consider
- This lesson covers Levvy from an NFT perspective, CNT's are covered next lesson.


Using Levvy with ADA (NFT's)

We just covered Levvy as a lender with NFT's as collateral for the loans, now we can look into Levvy with CNT's as collateral for the loans we consider filling.

In the above video you can see Levvy as a lender viewing the CNT collateral options we have to loan ADA against.

## How to

As a lender and having chosen the collateral type to be used against our loaned ADA, we click the **Lend** button.

This opens up the next page where we choose our lending LTV percentage and the amount of ADA we want to add.

> This means if a borrower defaults on a loan where the LTV is 75%, you will get the tokens as if you purchased them at 75% of the current price.

## Things to consider
- The higher LTV's seen on Levvy are used by some as a hedge against negative price action. What this means is that some users, take loans on their assets knowing if the collateral value drops below a certain price, they plan to default on the loan. They do this because the loss from defaulting with the loan terms provides some protection to the downside comapred with just holding the assets and being exposed to its negative price action.


Using Levvy with ADA (CNT's)

Similar to Fluid, using Levvy as a lender the first question you should ask yourself before filling each loan is: "If the borrower default, am i happy owning this NFT? or if they default can i sell it easily?"

If the answer is No, dont lend.

> because Levvy gives us the option of lending our ADA on both NFT's and Cardano Native Tokens the idea of using Levvy remains the same for the most part.

## Maximising your yield

So we're coming to Levvy, we have a bag of ADA and we wanna use it to earn a yield.

As we mentioned above, lending ADA with NFT's used as collateral means there will always be a chance the borrower defaults and you end up with the NFT. Lesser known collection, or collections will low volume will naturally make it harder to sell the NFT should a borrower default, you should also consider this when deciding which collections your happy to loan ADA against.

Now that we have decided on a NFT collection or CNT, its simply a case of adding your ADA to the platform. 

On Levvy for NFTs we do this by entering the highest offer*(or the amount of ADA a borrower with an NFT of the collection can get)* and a number of offers *(if you add two 2.5k ADA offers you'll be adding 5k ADA in total)*  

On Levvy for CNTs we do this by entering the LTV of your lend offer *(or the Loan to Value ratio a borrower needs to accept for a loan)* and Total lent *(The amount of ADA you are adding to that pool)*. 

Borrowers using Levvy get the highest loan available, then the next highest and so on.

To maximise your yield using this stategy you must balance your offer LTV in relation to the asset floor price firstly to remain competitive against other lenders but also because this ensures that should the borrower default and you are required to sell the asset, if sold at floor price you would still not lose money.

>Levvy doesnt show a LTV percentage on the NFT side of the platform, to work out it we can use: `{Loan Value} / {Floor Price} * 100 = LTV %`

If you have been lending, your rewards won't be sent you when loans are closed. To claim your earnings you need to navigate to the **Manage** tab and then select **Active loans**, this is where you will see your claim button that will claim all principles and interest or Collateral from closed and defaulted loans.




Levvy Strategy

The above video shows the [Optim Finance](https://app.optim.finance/dashboard) website and connecting Nami wallet. Once connected we first see our Dashboard. We're starting with ADA so have one of two options. The first we'll cover in this lesson and thats to supply ADA and in doing so earn a yield by filling or partially filling a bond or we can borrow ADA for reasons which we'll cover in the next lesson. 

> Please note, I have not personally used Optim and have gathered this information reading the public documentation, navigating around the platform and after reaching out to Cardano community member [Dubbleu_43](https://twitter.com/Dubbleu_43) having seen his post on X

## How to

[work in progress - 21/11/2023]

Using Optim Finance with ADA

Optim Strategy

Starting with ADA

Here we are, we have a portfolio of Cardano Native Tokens(CNT) and we want to earn a yield, but we dont want to sell and lose our position. So what can we do?

One way we can access the value in our portfolio without selling the asset is to use them as collateral, we will again look at the protocols we have at our disposal.]

Another way would be if a CNT has the option to be staked.

> Example: A protocol offers a substantial yield for staking its governance token. In this instance we will also include in this section of the course based on the protocol offering the yield.

Going forward there wont be any **How to** sections for each protocol because we would have covered it in the **Starting with ADA** section of the course.

So we're back at [Liqwid](https://app.liqwid.finance/) but this time we dont have ADA, we have CNT's.

The above video shows the Liqwid site that we are still connected to from earlier. 
>A Liqwid is still in it's infancy having launched in February 2023 and as a result the first CNT's went live [Nov 16, 2023](https://x.com/liqwidfinance/status/1725171898391150778?s=20).

CNT's live on Liqwid are currently AGIX, WMT and MIN. It would make sense as a holder and potential supplier of any of these assets to check the respective governance proposal where they were approved to be used on the protocol. Each will detail the parameters for that market.

> Links to each of the passed governance proposal's can be found here; [AGIX](https://app.liqwid.finance/governance/proposal/22), [WMT](https://app.liqwid.finance/governance/proposal/23), and [MIN](https://app.liqwid.finance/governance/proposal/24).

## Maximising your yield

If you took the time to read the governance proposal you'll know that CNT's on liqwid can be used as 'isolated collateral' to the ADA market. This simply means we can only borrow ADA if using CNT's as collateral.

The silver lining of this restriction thanks to [Proposal 29](https://app.liqwid.finance/governance/proposal/29) is that LQ rewards have been increased by 20k LQ per month exclusively for ADA borrowers. So, while our CNT's can only be used as collateral to borrow ADA, we have an incentive to borrow ADA for the additional yield we earn from borrower rewards.

Taking this into account we'll tailor our strategy around those ADA borrower rewards. 

## The Strategy

First we would supply our CNT earning us LQ rewards from minimum per market and borrower interest repaid.

Second we use our qCNT as collateral and borrow ADA to get our first yield from the ADA borrower rewards from Proposal 29.

> This is the point we take on risk, by using our CNT as collateral we need to consider a couple of things. In liqwid we are borrowing and collateralising our assets based on their dollar value and due to this we need to be mindful of the USD values. 
>
> Borrowed assets rising in value increases risk of liquidiation, Collateral assets dropping in value increases risk of liquidiation, both happening at the same time and you will be praying your Health Factor remains above 1.0.

We can leave it here or we could choose to take on more risk and further leverage our assets to increase the amount we are able to supply and in turn, earn.

## The Strategy Continued

If we opt to take on more risk, we can supply the borrowed ADA, use it as collateral to borrow the CNT we started with. 

From here we simply repeat the process, folding into our position until we cant any further due to min amount able to be supplied or until we are no longer willing to accept more risk.

Using Liqwid with CNT's

So we have a bag of CNT's we're bullish on and we want to use them to earn a yield.

>In my opinion this is where **Lenfi** shines, not because of the rewards or anything like that, it's because it is the lending protocol on cardano with the most choice of collateral assets.

In the above video you see that we follow the steps to create a liquidity request as a borrower.

The final stage of the liquidity request process is where you select your collateral asset, here you'll see the various assets to choose from.

> If you dont hold any of these assets dont worry, there's likely anoher protocol you can use.

## Maximising our yield

Lenfi is great for Shorting. Here's how we'd do it when our starting point is holding a CNT.

If we think there's a change of a token depreciating in value and we hold that asset. We might be bullish on the protocol/token long term but know due to whatever reason there's likely to be some drops in price.

What we'd want to do in this situation is use our CNT as collateral and borrow a stablecoin. If the price drops like we thought it would, we use the stablecoins we bought to buy the asset at a discounted price.

> We dont have to use stablecoins as the asset we borrow but it makes the most sense due to their attempts to be pegged to $1

We can then repay our loan and whatever is left over is our profit. 

> Remember in this scenario we are long term bullish on the CNT used as collateral making this is a great way to accumulate the CNT during times of volatility.

Using Lenfi with CNT's

Starting with CNT's

Here we are, we have stablecoins and we want to earn a yield.

To access the value in them without selling we use them as collateral, at the point in time that this course releases the best yields im aware of are with Liqwid Finance which we cover in the next lesson.

> Updates to this course will happen whenever new stablecoin strategies for earning yields present themselves.

Remember way back in the **Starting with ADA** section we first spoke about [Liqwid Governance Proposal 8](https://app.liqwid.finance/governance/proposal/8) and how the majority of LQ rewards are emitted to Stablecoin suppliers. In this scenario, that's us.

## Some napkin maths

After [Proposal 29](https://app.liqwid.finance/governance/proposal/29) LQ emissions are now;
- minimum 100 LQ per month per market.
- 120k LQ per monthly cap targeting 50% APY for stablecoins. 
- 20k LQ per month is paid to ADA borrowers proportional to their repaid interest.

The amount of assets supplied to Liqwid has already resulted in the monthly cap being reached so we can assume to be working with the maximum 120k LQ per month to start. We remove 20k for ADA borrowers and 1k for each markets minimum LQ per month leaving us with 99k LQ to be paid to Stablecoin suppliers.

At current price of $3.03 that's a cool $299,970 in rewards, paid in LQ each month.

> That doesnt include any interest repaid by borrowers

## Maximising your yield

AFAIK, Liqwid is the best place to earn a yield on cardano if you have a bag of stablecoins. 

Before we start, the strategies we use will be dependent upon the stablecoins we hold when using Liqwid due to the fact not all can be used as collateral. The image above shows the colum with a green tick for assets which can be used as collateral.

> The below strategy assumes you are starting with stablecoins that CAN be used as collateral on **Liqwid**, at present that leaves only DJED.

## Strategy One
 would be suppying DJED, in doing so we'll start earning on the DJED supplied. We earn from supplier interest repaid, and LQ rewards.

Next if we are willing to accept the risk of taking on debt, we can collateralize our DJED and borrow another stablecoin to supply.

The borrowed stablecoin that we are now supplying, with the current rates shown in the image mean that we are likely earning more in rewards than it is costing us in borrowing.

> Be sure to set a health factor that you are comfortable with. Stablecoins allow for a lower health factor when borrowing stables due to their perceived stability but remember, this is crypto and i wouldnt say anything is stable, not even our stablecoins.

We could go a step further if we are willing to accept a little more risk.

This time, we supply DJED like we did last time and we borrow a stablecoin just like we did before but we dont resupply it. 

## Strategy Two
 differs because rather than resupplying the borrowed stable, we head over to any DEX and covert our borrowed stable, first into ADA then from ADA to DJED.

Once we have our borrowed value in DJED, we can then add it to our current loan. This increases our heath factor which means we can borrow more stables. Those borrowed stables can again be sold and moved back into DJED to repeat the process. This will only be possible a number of times due to each cycle reducing the amount you are able to supply the next cycle due to the overcollateralized nature of lending protocols.

> This is not possible for many of the stables on Liqwid as they are Bridged stablecoins via Wanchain bridge. Currently the only stablepool(dex pair where both assets are stablecoins) that im aware of is a [DJED/DAI](https://app.wingriders.com/swap/8db269c3ec630e06ae29f74bc39edd1f87c819f1056206e879a1cd61446a65644d6963726f555344/25c5de5f5b286073c593edfd77b48abc7a48e5a4f3d4cd9d428ff935444149/stableswap) pair on [Wingriders](https://www.wingriders.com/)

## Strategy Three
>The below strategy assumes you are starting with **BRIDGED** stablecoins that **CAN NOT** be used as collateral on **Liqwid**.

If you are someone who, like myself has(*or used to have*) a portion of their monthly income designated to a fiat savings account. In the traditional financial world the best yields you can currently get are around 5.5% *(after a quick google search of UK bank Saving account interest rates)*. 

> If we are comfortable with the risks associated with bridging assets, we have an opportunity to earn a much higher yield.

If you are comfortable with the additional risk, Liqwid also pays a yield for USDC, USDT and DAI as the three largest stablecoins in the crypto space. The bridge is through [Wanchain](https://www.wanchain.org/).

The first step in this strategy will be deciding which chain we use to bridge to Cardano. It makes the most sense to buy either USDC, USDT or DAI from a centralised exchange(CEX) due to depth of liquidity. 

We then need to withdraw the assets from the exchange to our own wallet. Remember that we're not going to be withdrawing from a CEX to a Cardano wallet just yet. We will be withdrawing the stables on whatever chain we have opted for, currently Polygon seems to be the cheapest and metamask is a good wallet to use, just ensure you have the wallet set up to use Polygon network.

After you have received your stables from the CEX, we can then use the [Wanchain Bridge](https://bridge.wanchain.org/) to move our assets from your blockchain of choice to Cardano.

Once bridging the stables is completed you will see them in your Cardano wallet, from here we simply supply to Liqwid.

The benefit of this strategy is that we are able to earn a substantially higher yield than our fiat savings account and as we are only supply, we have no risk of liquidiation.

Our assets simply grow in value thanks to interest repaid and the bulk of our rewards are paid in the platforms LQ token which can be held, staked or sold for fiat value to realise profits.

## Things to consider
- The safest yield we can earn in Liqwid is to simply Supply a stablecoin and hold the qToken. By doing this we have no liquidation risk, our assets accrue value from interest repaid and we get the bulk of our rewards weekly in LQ token.
- Bridged stables are not used as collateral on Liqwid due to the perceived bridge risk to protocol.
- Main Bridge Risk explained, for example imagine the ERC side of the Wanchain bridge gets hacked and assets stolen. This would mean that any bridged assets would no longer be backed by anything and would not be redeemable from Cardano back to ERC side.

Using Liqwid with Stablecoins

Starting with Stablecoins

Haha there's no summary, just wanted to take a momemt to say Thank you to all the learners who have taken the time to complete this course.

I hope you have enjoyed it and that it has given you some ideas for your next play in Cardano DeFi.

Stay safe out there.

> If you are not happy with the course or think it can be improved in any way please, reach out to me. Cardano DeFi is not a small topic and there's bound to be things I need to learn 

A thank you

Summary

This course is not financial advice, it simply highlights strategies to earn a yield while navigating Cardano DeFi.

This course is free for holders of the [$itzdanny](https://www.jpg.store/collection/itzdanny?tab=activity) collection.

> DeFi Yields fluctate and change as new strategies emerge with protocols constantly trying to innovate. This will mean that at times, strategies in this course may seem outdated or better yields are available. This course aims to indentify protocols of interest and details strategies which can be used to earn a yield using them, from this information you will have all you need to form your own strategies using pieces of this course as building blocks for your own investing journey
>
> This course will also be continously worked on as the Cardano DeFi Landscape changes.

Strategies to earn a yield in Cardano DeFi

Cardano DeFi Strategies

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