D8X Yield Machine
D8X launches a USDC pool that earns you a 12.5% APY, in addition to trading revenue and D8X points, currently adding up to more than 20% APY — no impermanent loss.
On DEXs that employ D8X’s perpetuals engine, you can now trade and provide liquidity using yield-bearing USDC. You can find a full list of frontends that link to the D8X engine at d8x.exchange/frontends
Perpetual traders put down a margin to go leveraged long and short. With D8X perpetuals denoted in USDC on Arbitrum, this margin earns a yield. Let’s say you open a position of $1000 in BTC/USD with a leverage of 2x, which results in a margin of $500. The $500 margin earns an annualized yield of 12.5% while your position is open, on top of your profit & loss incurred on the position. To trade, log on to one of the exchanges that runs the D8X engine at d8x.exchange/frontends, and connect to Arbitrum on the top right. Use the LiFi Widget by clicking the icon showing a $-sign on the top panel to get USDC on to Arbitrum to start trading.
On the other hand, liquidity providers in D8X USDC pool on Arbitrum earn that same 12.5% yield on top of the profit and loss made by the exchange. Currently this amounts to an annualized yield of more than 20%, meaning if you deposited your USDC for 1 year, you would end up with 20% more USDC, 10% more if you deposited for 6 months, and so on. The lock-in is only one day, quite different from the usual staking periods and faster than the time you need to wire money from one bank account to another — open on week-ends too. To start earning yield, log on to one of the DEXs that run the D8X engine, get USDC onto Arbitrum, and deposit to the USDC vault on the “earn” page.
Wait — 20% or so, but how?
The 12.5% annualized yield is the yield from @AngleProtocol’s stUSD token. They are working really hard on making you that yield, by investing into treasury bonds, funds, and DeFi protocols, see www.angle.money/stusd. Whenever you trade or provide liquidity, smart contract swaps the USDC you send to the trading engine into Angle’s stUSD token at the index price. That means no slippage for you, but Angle’s yield as soon as the token is in your margin account or LP-ing. Whenever you exit, we swap back the token at the index price, and you get back USDC.
The vault solely consists of one token, stUSD, that is exchanged between traders and vault, hence no room for impermanent loss that occurs on spot DEXs like Uniswap.
Nice and what’s the risk?
Like any DeFi product, there are risks associated with interacting with smart contracts. Both D8X and Angle contracts have been audited to keep this risk to a minimum. Additionally, our frens at Angle reviewed D8X’s use of their smart contract. @AngleProtocol stUSD is onchain, transparent and permissionless, see https://docs.angle.money/overview/risks. Angle also introduced a capital buffer, to mitigate potential losses they might have on the various investments. The yield that currently stands at 12.5% is changing over time. Historically it has ranged between 11% and 20%. Similar to that, the trading APY on D8X is also fluctuating, depending on trading activity. Last but not least, it’s unlikely but possible that there are insufficient USDC deposited in Angle’s Arbitrum “Transmuter” contract (see https://analytics.angle.money/balance-sheet), in which case the D8X smart contract is unable to swap back your USDC. However, in this edge-case, you are not locked into your position, but the D8X smart contracts send you back Angle’s USDA that is equal in value than the USDC that you would otherwise receive.
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IMPORTANT INFORMATION
This content does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or any other product (token) or service regardless of whether such security, product (token) or service is referenced in this brochure.
Furthermore, nothing in this content is intended to provide tax, legal, or investment advice and nothing in this content should be construed as a recommendation to buy, sell, or hold any investment or security or to engage in any investment strategy or transaction. The securities, products, or services discussed in this content are not represented as being suitable for any particular investor.
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