"Latest HUMA Circular Loan Analysis" @humafinance @humafinance_zh
HUMA partnered with Kamino @KaminoFinance yesterday, and circular loans are now available. Which type of people is this scheme more suitable for?
I personally believe it is suitable for the following groups:
1. Those who have unblocked PST and want to amplify their yield;
2. Those who want to hold HUMA but are concerned about long lock-up periods and want to use their funds flexibly.
So, this circular loan scheme is worth looking into. Let's calculate the yield situation:
1⃣ Deposit 100u into HUMA with no lock-up date and receive $PST worth 100u;
Official website link:
2⃣ Deposit $PST into Kamino, borrow USDC, and then continue to deposit USDC to borrow USDC, performing circular operations. Assuming an LTV of 80%, theoretically, it can reach up to 400u, but considering liquidation risks and gas consumption, generally, about 4 times is sufficient.
Official website link:
3⃣ So, how much value can this operation generate?
(1) Principal has a 10% yield;
(2) From 1.99 times yield, it changes to nearly 10 times yield;
(3) Equivalent to the yield of a Classic lock-up for 6 months, but this circular loan scheme allows for more flexible use of funds.
To add, the reason I didn't mention the interest for borrowing USDC is that there is also interest for depositing USDC. The principal has a guaranteed 10% return, which is equivalent to a hedge. Additionally, the interest for borrowing U is variable and difficult to estimate, so I didn't mention it.
@gaofeng901224 @humafinance @humafinance_zh @KaminoFinance
To add, the reason I didn't mention the interest for borrowing USDC is that there is also interest for depositing USDC. The principal has a guaranteed 10% return, which is equivalent to a hedge. Additionally, the interest for borrowing U is variable and difficult to estimate, so I didn't mention it.
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