100% APY on DAI using Polygon DeFi Legos

By YJN58 | Humble Farmer Finance | 19 Oct 2021


PAR is a CDO style over collateralised stablecoin pegged to the EURO minted on Mimo Capital.

An incentivised PAR/MIMO pool will soon be going live on Mimo Capital on Polygon which would be really beneficial  for several reasons and would also encourage a lot of PAR to be minted and used. With the current USDC minting incentives and the Balancer USDC/PAR pool incentives the following method could be used:

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The long asset in the strategy would be DAI and the ultimate objective would be to increase the amount of amDAI(interest bearing DAI that is deposited on Aave) that we hold. The decision to go with farming USDC/PAR is due to minimum IL and low risk. The only risk or variable factor here would be the price of the $MIMO governance token whose volatility has been accounted for in the simulation of the strategy.

Strategy A

1.Deposit DAI in Aave and receive amDAI token
2. Go to “Yield” section of QiDao and convert amDAI to camDAI (this auto-compounds wMATIC rewards from Aave)
3. Go to vaults and create a camDAI vault and borrow MAI at 90% LTV (interest free)
4. Swap MAI for USDC
5. Mint PAR against USDC
6. Supply PAR or PAR and USDC in the USDC/PAR pool in Balancer
7. Swap daily MIMO rewards for more PAR (incentives would encourage liquidity to stick)
8.a. Supply PAR in the USDC/PAR pool BAL
9. Repeat steps 7 and 8 daily

Strategy B

1.Deposit DAI in Aave and receive amDAI token
2. Go to “Yield” section of QiDao and convert amDAI to camDAI (this auto-compounds wMATIC rewards from Aave)
3. Go to vaults and create a camDAI vault and borrow MAI at 90% LTV (interest free)
4. Swap MAI for USDC
5. Mint PAR against USDC
6. Supply PAR or PAR and USDC in the USDC/PAR pool in Balancer
7. Swap daily MIMO rewards for more PAR (incentives would encourage liquidity to stick)
8. Swap PAR for USDC in the USDC/PAR pool in BAL
9. Swap USDC for DAI on Curve

10. Repeat steps 1 to 8 everyday

References for the possible APRs in $MIMO that can be earned*

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Here is the simulation of steps involved to in executing the strategy for a period of 365 day**

Strategy Simulation

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* - APR is subject to change and will reduce as more people LP into the same pool

** - The simulation is not a 100% guarantee and one DYOR before making any conclusions 

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YJN58
YJN58

DeFi and Crypto Enthusiast


Humble Farmer Finance
Humble Farmer Finance

Decentralised Finance, Crypto and Economics

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