VaultCraft V1.5 — Part II
Increased Capital Efficiency with Leveraged Farming 🧑🌾
With the release of V1.5, it has become not only more cost-effective to farm oVCX on Arbitrum and Optimism, but also possible to increase your capital efficiency by lending your crypto to borrow and deposit more into Smart Vaults. VaultCraft’s Aave money market integration empowers users to utilize borrowed liquidity to earn even more on their deposits. Here is a step-by-step guide on how to leverage your crypto loans to maximize your earnings with VaultCraft.
Step 1 — Open a Smart Vault Page
You may have noticed that each Smart Vault has its unique page featuring additional information and functionality. Click on Loan Management under Leverage Farm to open the loan module.
Step 2— Supply and lend any crypto
Supply any blue-chip asset as collateral to borrow.
Step 3— Borrow
Once you have supplied your collateral, you can borrow the maximum additional amount based on its value. Here are important variables to help you manage your loan:
- Health Factor: Measures your loan’s safety, showing how much your collateral value can drop before risking liquidation. Higher values mean greater safety from being liquidated.
- Available Credit: Maximum additional amount you can borrow, based on the value of your collateral.
- Net APY: Net yield from your lending and borrowing activities, considering all associated fees.
- Collateral: Assets you’ve deposited to secure your borrowed funds.
- Borrowed: Total amount of funds you have currently borrowed.
- Net Loan Value: Current net value of all your active loans, minus any repayments.
- Lending APY: Annual yield you earn from lending out your assets.
- Borrow APY: Annual interest rate you are charged on your borrowed funds.
- Max LTV: Highest ratio of loan amount to collateral value that you can borrow, reflecting your borrowing capacity.
- Liquidation Threshold: Point where your debt reaches a specific percentage of your collateral value, indicating the debt is undercollateralized and triggering a risk of liquidation.
- Liquidation Penalty: Fee or cost added to your debt when your loan is liquidated, typically benefiting the liquidator who covers part of your borrowed amount.
Step 4 — Deposit into a Smart Vault
After you’ve supplied and borrowed, you can now deposit the borrowed amount into the Smart Vault.
Step 5— Repay and withdraw
When you are ready to repay your loan, open the Repay module and you will see how much you need to repay. After repaying, click Withdraw to retrieve your funds.
Conclusion
Being able to borrow natively on the VaultCraft dApp streamlines capital efficiency by removing the necessity to switch protocols to borrow. Borrowing natively also allows you to start earning even more oVCX instantly as well.
Addition medium resources:
Farming oVCX Medium
VCX Value Accrual
Vaultron Reward Optimizer
