First farming strategy

Lydian

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Published in

Coinmonks

4 min readApr 18, 2022

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April 18th, 2022

Introduction

Our treasury has recently accrued its long-awaited first real productive asset: STX. This STX for our treasury was collected and is being collected via lucrative bond offerings on our platform.

We feel that the best way to get farming tokens is by collecting them via bonds or gathering them as farming rewards. This minimizes the need to trade or swap before farming strategies can be deployed.

So, now that the treasury contains STX tokens, it is up to the Guild to determine how they should be deployed.

Put STX to work!

The farming approach of Lydian will be decided via continued Guild governance in our Discord. To guide the discussion, the preferred first farming approach will be detailed in this article.

As a first step and in order to get the best rewards with our STX tokens it is recommended to combine them with some of the USDA from the Lydian treasury. The combination will then be added to the Arkadiko Swap STX/USDA pool and then to stake the LP tokens. This step forms the first core strategy for the Lydian treasury.

The current APR is 85.57% based on a TVL of $1.6m. Our potential investment shall have an impact on this percentage, but it should remain sufficiently profitable.

Current Arkadiko STX/USDA LP Staking rewards

Projected impact on APR after a potential Lydian investment

The staking rewards for STX/USDA LP staking are denominated in DIKO and provide our treasury with a natural growth of a new valuable asset. Based on the Guild’s decision, up to $ 50k value-threshold of DIKO will be held by the treasury. The accrued DIKO will be applied in a DIKO/USDA pool farming strategy, until $ 100k of LP value is reached. Any DIKO that would overflow this threshold will be sold off for other assets, such as USDA.

The farmed DIKO for the treasury will be added to the DIKO/USDA pool until $ 100k of LP value is reached.

Enabling us to deploy this and other yield aggregation strategies in the future is imperative. To further empower Lydian’s strategies, more STX bond offerings will be issued in the near future.

Next step!

After combining STX with USDA in the first step of our farming strategy, a significant amount of USDA will remain available in the treasury.

In order to take advantage of the best new opportunities on the market, 50% of the remaining USDA in the treasury, after pairing it with STX, could be deployed in Arkadiko Finance’s Liquidation Pool. The Liquidation Pool is a brand new feature on Arkadiko Finance. When depositing USDA in the Liquidation Pool, DIKO rewards are earned. So it’s basically single staking for USDA. When a vault needs to be liquidated, USDA from the pool is used to pay back debt. In return you get the collateral token at a discount. Note that the USDA provided would be locked for a minimum of 30 days. Hence, the proposal to only lock 50% of remaining USDA.

These rewards can then be sold off in exchange for more USDA for our treasury!

The other 50% of the USDA in the treasury will remain as a safe buffer for future operations.

Let us know what you think!

We are very excited to hear your feedback on this article. We believe this could be a great first farming strategy, that put Lydian on the map. On to the next level!

Join our Discord and let us know what you think!

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First farming strategy

Introduction

Put STX to work!

Next step!

Let us know what you think!

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Written by Lydian