Is 15% yield on @HyperliquidX scalable? Let's find out. 🧵 [1/9]
In a previous thread: we showed 15%+ yield is possible and sustainable, backed by over-collateralized assets and real-yield strategies Now, how scalable is it? [2/9]
@SHREDfi 15% sustainable yield on stables on @HyperliquidX... possible? 🧵 [1/8] Let's find out..
Ethena proved the basis trade scales well. It grows with short open interest (OI) on perp exchanges, typically 2-5x the spot's marketcap [3/9]
As crypto adoption rises, perp OI should keep climbing, making this trade highly scalable [4/9]
Just looking at USDe: nearing ~$15B market cap with growth accelerating [5/9]
@SHREDfi’s strategy goes beyond the plain basis trade, using minimal leverage to optimize “risk-adjusted” APRs [6/9]
To pull this off, we use spot leverage via DeFi money markets (like Aave v3 on ETH L1). Scale is limited by money market supply caps and stablecoin borrow supply (& utilization) [7/9]
Turns out this scales quite well. One shred strategy (below) can handle ~$3B in TVL. Our flexible infrastructure supports multiple strategies, pushing potential scale up to $5B-$10B [8/9]
As Perps OI and Money Markets' TVL grow with on-chain capital, we can scale even larger alongside them [9/9]
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