New Feature Release — LST Leverage Strategies
At NAVI, we strongly believe that DeFi has become the primary use case of blockchain technology. It is revolutionizing the financial industry, providing users with palpable opportunities and usable financial products, previously inaccessible through traditional means.
With that in mind, we also believe that due to some barriers to entry, the DeFi industry remains largely unexplored and has untapped potential. To benefit fully from what DeFi has to offer, users need to acquire significant knowledge of how different protocols work and interact with each other.
NAVI Protocol’s mission is to allow users to discover these opportunities by making the space more secure and streamlined for everyone, regardless of their proficiency in this niche.
With the release of NAVI Pro, the team has pushed out a product that greatly improved users’ quality of life and accessibility. However, we strive to continuously innovate and set the goalposts even further.
| To this end, the newly released LST Leverage Strategy feature allows users to maximize their capital efficiency through staking SUI and plugging LSTs into NAVI’s lending and borrowing.
This article will showcase how it works, explore the risks, and provide you with a guide on how to get started. Let’s begin.
NAVI’s LST Leverage Strategies — Feature Showcase
The NAVI LST Leverage Strategies have been designed to provide users with an accessible means of maximizing yields on their SUI tokens. Found in the “Earn” section on NAVI Pro, the NAVI LST Leverage Strategies take advantage of:
🔹 The capabilities of Sui Mysticeti mainnet to group multiple transactions into a single PTB,
🔹 SUI liquid staking,
🔹 NAVI Protocol flash loans,
🔹 Landing/Borrowing nesting loops on NAVI,
🔹 Executing multiple interactions near-instantly, at negligible cost in gas fees.
In a nutshell, in just a couple of clicks, and without leaving the NAVI Pro dApp, users can stake SUI, supply the LST to NAVI, and borrow SUI to begin a looping strategy.
How Does LST Leverage Work?
As mentioned previously, LST Leverage Strategy takes advantage of the speed of the Sui Mysticeti mainnet, paired with NAVI’s flash loans SDK to do the following:
- Stake SUI into either Volo or Haedal to receive vSUI or haSUI, depending on the strategy of your preference.
- Supply the LST into NAVI Protocol.
- Borrow SUI from NAVI
- Stake the borrowed SUI… etc.
Following the user’s risk assessment, this LST loop can be applied up to 3 times, with each iteration increasing the yields of the user.
📒 Important notes:
- This strategy involves multiple staking, borrowing, and supplying activities. To fully withdraw your initial deposit, you will need to manually unstake the LSTs and repay the borrowed assets.
- The APY provided while launching the strategy depends on the supply/demand dynamics for LSTs on NAVI Protocol and is likely to vary over time.
- You will need SUI tokens in your wallet to get started.
What are the Risks of this Strategy?
Like with any strategy that utilizes a form of leverage, the LST strategy isn’t risk-free.
That said, these risks here are significantly lower, as the supplied and borrowed assets are pegged to each other’s value. This means that price fluctuations of SUI will have minimal to no impact on this strategy and your initially-planned health factor in NAVI Protocol.
There are still risks of utilizing LST Leverage in the case of liquid staking tokens de-pegging.
Launching Your LST Strategy — Step-by-Step
Now that you know how the strategy works and the risks behind it, let’s guide you through the process of creating one using Volo as the staking method.
- Access the NAVI Pro dApp, connect your wallet, and go to the strategies section: app.naviprotocol.io/strategy
2. Select the vSUI beginner strategy.
3. On the strategy page, navigate to the interactive box and input the amount of SUI you wish to utilize.
4. Select the number of times you wish to leverage this amount.
📒 Note: The interactive box will provide you with a detailed breakdown of the SUI staked in Volo, APY, and interest rates, as well as the change in your health factor.
5. Confirm that you understand the terms of the strategy by checking the box.
6. Click on “Supply” and confirm the transactions in your wallet.
7. To check your strategy, go to the NAVI dashboard.
8. You should see a new supply position in vSUI and a new borrow position in SUI.
Exiting the strategy
If you wish to exit the strategy and repay your loans, proceed as follows:
- Withdraw the vSUI supplied in NAVI
- Go to stake.volosui.com and unstake vSUI to receive SUI
- Repay the loan on NAVI with SUI.
📒 Note: Depending on your health factor, you might need to repeat this process in several increments. Make sure your health factor never goes under 1 when withdrawing vSUI to avoid liquidating your position.
Wrapping Up
The NAVI LST Leverage feature is a relatively low-risk strategy that allows maximizing returns by staking and lending SUI tokens.
We hope that users will be able to take advantage of this opportunity to its fullest and enhance their capital efficiency in the Sui DeFi ecosystem.
Going forward, NAVI plans to add new strategies to its “Earn” page. These will offer even more flexibility, using different assets and across partnering protocols, capitalizing on the asset composability provided by NAVI.
Stay tuned for updates in this field as the team actively working on partnerships with other protocols and listing new liquidity pools for major assets.
The One-Stop Liquidity Protocol on Sui 💧
