Multiply for Leveraged LSD Strategy

Superposition has released its latest feature, Multiply, which enables users to effortlessly achieve leverage (up to 20x) of their Liquid Staking Derivative yield strategy. The industry leading leverage & yield is backed by Concordia’s modular risk engine that takes a data-driven approach to evaluate the risk between staking assets and the underlying asset.

How It Works

Superposition’s Multiply feature consolidates several steps and transactions to present you with a seamless, user-friendly experience.

Let’s walk through an example where the user deposits 10 APT with a 10x multiplier.

1. User deposits 10 APT.
2. Superposition’s flash loan functionality facilitates the instant lending of 90 APT to the user.
3. The combined 100 APT (10 APT + 90 APT) is deposited into a 3rd party liquid staking derivatives provider, such as Thala, and the user receives sthAPT, which earns staking rewards.
4. The sthAPT assets are then deposited into Superposition as collateral.
5. sthAPT collateral is then automatically used to borrow APT to repay the APT flash loan.
6. At the end of the Multiply operation, users will have created the following: a 10x leveraged sthAPT collateral position + an APT borrowing position.
7. The yield of the strategy primarily comes from the difference between the staking rewards and the borrowing rates for APT.

Tutorial

1. Access the Multiply tab on the Superposition dApp

Access Multiply tab on the Superposition dApp

2. Click on “Multiply”

3. Deposit APT and select desired leverage

4. Review all details

5. Complete transaction!

Fees

Superposition charges a 0.30% flash loan fee for APT as part of the operations. The APY displayed on the dApp already deducts this fee for full transparency.

Risks

Every yield strategy comes with risks and users need to make sure they understand the risk before deposit.

• Dollar-denominated Yield Risk: The leveraged liquid staking strategy gives users return in the form of APT tokens over time. From a dollar-denominated view, the strategy may yield low or negative returns if APT loses its value significantly.
• APT-denominated Yield Risk: The strategy’s yield primarily comes from the difference between the staking rewards and the borrowing rates for APT. Therefore, the strategy may yield low or negative returns if staking rewards reduce or APT borrowing rates increase due to high utilization. In extreme cases, high APT borrowing rates may cause liquidation of the multiply position.
• Smart Contract Risk: The smart contract operations supporting the multiply strategy involves Superposition and third party liquid staking derivatives providers. Therefore, hacks, bugs, or operational breakdown may cause significant loss.