Hey folks, in the constant pursuit to find the highest yields that you can earn off of your stablecoins, I’ve come across multiple avenues in which you can lever up your returns in order to get some pretty insane yields, in some cases up to 50x leverage and 70% APY. Now if you have no clue what leverage or liquidations are, I’m going to ask that you do NOT engage in any of these strategies, or at the very least make sure you DYOR find out your risk tolerance before aping in. Some of these yields are VERY attractive, but please don’t fly too close to the sun…

Abracadabra.money on Ethereum mainnet using Stargate USDC/USDT — up to 30% APY

Starting with perhaps the most tried-and-true strategy first, if you’ve been in the cryptospace for a while, you’ll most likely remember Abracadabra for their UST/MIM Degenbox strategy, which many people (including myself) had the opportunity to earn on a low end more than 40% APY off of their UST. Even with the crazy collapse of the Luna ecosystem and all the contagion that followed, Abracadabra has continued to show their meddle and have continue to build products that allow users to leverage the crap out of their yield.

There are multiple strategies on Abracadabra that use leverage, but in terms of stablecoins, the most lucrative (but also potentially the most degen) are Abracadabra’s Stargate Degenbox strategies:

Earning 1% APY in interest, you could potentially leverage your stables to more than 40 times, or in other words, you could take your Stargate USDC/USDT from around $1000 to around $40,000, potentially earning you around 40% APY.

Why did I say 30% APY instead of 40% APY in my header? If you took that much leverage you’d probably instantly get liquidated, because the liquidation price of your collateral would be $1.0014:

In order to mitigate your risk for liquidation you have to reduce your leverage, and as you can see in the first graphic, doing around a 20x leverage has a corresponding liquidation price of $0.9753. This is much safer than $1.0014, but honestly still a bit too risky for my tastes.

Pros: This strategy has one of the best yield opportunities out there. Also the Abracabra.money platform is relatively really easy to use, and the UI makes it easy to understand the impact that leverage has to the corresponding liquidation price.

Cons: There’s a couple of big drawbacks here — first it’s on Ethereum mainnet which means the gas fees can be pretty hefty. If traffic is high on mainnet, opening one of these strategies can cost a lot, meaning that this strategy might only be worth it if you’re investing huge sums of money. ALSO, and perhaps the biggest drawback is that this strategy is dependent upon how much $MIM you can borrow, and if available, borrowable $MIM sells off like hotcakes. If you’re wanting to try your luck, follow the $MIM replenishment account which will give announcements as soon as they occur.

Single Finance on Cronos using USDT/USDC — up to 10% APY

The USDT-USDC strategy is by far the least degen strategy on this list, because Single Finance only allows you to do a 4x leverage earning barely 10% APY:

9~10% APY isn’t bad alone in it of itself, but as I've mentioned in countless other articles, there’s plenty of strategies that can get you similar returns without having to leverage multiple times. Still I thought that Single Finance was still definitely worth mentioning, especially because I really couldn’t find many opportunities that helped you conveniently leverage via Cronos.

Also an additional item of note is that this strategy will payout the majority of their rewards through their platform token $SINGLE:

As far as platform altcoins go, $SINGLE hasn’t actually been doing that badly as of late, but still something something to consider.

Pros: Because this is on Cronos, the gas fees should be relatively cheap. Also, if you weren’t planning on doing greater than a 4x leverage anyway, this might be a good option to try out.

Cons: This strategy has significant exposure into altcoins, which increases potential for price volatility. The interface on Single Finance appears to be a little wonky as well, and doesn’t seem to reflect accurately the APR’s or APY’s on CronosMM.Finance.

Sturdy.Finance on Ethereum Mainnet using DAI/USDC/USDT/sUSD— up to 26% APY

Sturdy Finance has a few different leverageable stablecoin strategies, but perhaps the most profitable is utilizing leveraged returns from the Curve sUSD pool, which consists of DAI/USDC/USDT/sUSD:

With this strategy you’re able to lever up to 8.5x, and what’s cool about Sturdy is that they can also estimate the gas fees it costs if you want to open up your position.

One thing to be cognizant of with Sturdy, is that similar to Abracadabra, you must first obtain your assets from a different platform (in this case the sUSD LP off of Curve) prior to being able to stake it on Sturdy. In other words, you must first obtain the sUSD LP on Curve.fi prior to depositing it to be leveraged on Sturdy. Why is this important? If you’re trying to unwind your positions and exit quickly, during high traffic times, not only will it be incredibly expensive to unwind your leveraged position, but also it might cost another arm and leg to get out of your Curve LP.

Pros: Sturdy provides an easy-to-use user interface including sliding scales and gas fee estimations. In addition there are multiple stablecoin options to choose from depending on your risk appetite.

Cons: There’s a reason why liquidation cascades happen so easily on Ethereum. Once traffic is high, it might cost a ridiculous amount to unwind your leveraged position, meaning that you might not be able to exit in time (or at all).

Tarot Finance on Arbitrum using USDC/DAI — up to 75% APR

Tarot.to actually has a lot of pretty insane stablecoin strategies, but perhaps the most degen of them all is the DAI/USDC pool utilized from 3xcalibur. Even on a base level, the 3xcalibur DAI/USDC LP offers a 11.75% APR return which even without leverage is pretty fantastic.

In order to take part, one must first create your DAI/USDC LP over on 3xcalibur and then deposit the LP over on Tarot. Once deposited, you’ll start accruing rewards in the native LP.

Pros: This strategy is on Arbitrum which means you’ll pay little in gas fees. Also in addition to the 3xaclibur strategy, Tarot has several other stablecoin leveraged strategies (mostly via Swapfish) that offer 20–68% APR, depending on the amount of leverage.

Cons: The rates are fantastically high and I can’t imagine that they’ll last forever. As the TVL continues to grow, most likely your returns will get increasingly diluted.

Conclusion

Hopefully you’ve discovered a new protocol to capitalize off of and if you’ve heard of any others that aren’t listed here, please drop me a comment below because I’d love to check it out. If you’re interested in digging for more stablecoin opportunities with some lower risk parameters (no algos, no lock-ups, no altcoins) check out my latest January 2023 article — a compiled list of places you can earn 10%+ yields.

Thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates.

Disclaimer: And as a final reminder, this is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you, especially when it comes to leverage. Cheers everyone!