Kassandra Humble Farmer Strategy
How to take profits from our social index without risking your crypto exposure using BENQI
In this article, we’ll guide you through one of many strategies you can do in order to take part in the Avalanche ecosystem without letting go of your tokens.
The Avalanche Social Index
Kassandra recently launched the Avalanche Social Index, an ARC20 token going by the ticker $aHYPE that represents a fraction of an ever-changing dynamic portfolio that automagically invests in the most solid and engaged communities.
By holding aHYPE, you will get exposure to AVAX and many other Avalanche blue-chips: JOE, PNG, QI, XAVA, CRA, and KACY, their allocations weighted by their respective community’s Social Scores at Heimdall.
Since its launch, AVAX represents more than 75% of the total aHYPE composition.
Staking aHYPE on Kassandra provides a triple digit APR, with autocompouding avaiable at Yield Yak for more efficient farming.
Use BENQI to farm Kassandra
We get it: You may already be overinvested in Avalanche, and liquidating your other assets to heighten your position within the Avalanche Social Index may be out of the question.
But that’s the tricks of the trade: you can use BENQI to get Kassandra rewards at low risk without altering your current exposure.
BENQI is a leading protocol in the Avalanche Ecosystem that allows users to earn interest on their supplied assets, allowing users to borrow any available asset from their platform in an overcollateralized manner.
Using BENQI you can:
- Lend your ETH/BTC at BENQI;
- Borrow AVAX at low risk;
- Swap it into aHYPE;
- Farm KACY with it;
- Enjoy high APR returns at relatively low risk.
Managing Risk
There’s an implicit risk of lending assets to borrow AVAX: if AVAX skyrockets, your debt can only go up, and you may get liquidated.
Supplying ETH or BTC on BENQI instead of stables is a way to avoid liquidations: your risk diminishes substantially, as their moves are largely correlated to Avalanche.
Thankfully, since aHYPE is majorly composed of AVAX and highly price correlated Avalanche tokens, as your debt goes up, so does your aHYPE tokens.
This way, when your debt is too high, you can always sell your aHYPE back to AVAX and pay part of your debt.
Step-by-step guide
1. Go over to BENQI and connect your metamask wallet on the Avalanche network.
2. Approve and deposit your tokens.
3. Next, click on the “Collateral” slider and approve your tokens to be used as collateral.
4. Borrow AVAX.
Watch out for your health and liquidation risks — They’re all displayed on the upper right corner. It’s always important to keep your borrow health above 1.5 and closer to 2.
5. Wrap the borrowed Avax and turn it into WAVAX. In this case, we used Pangolin.
6. Now, go over to Kassandra and swap it into aHYPE.
7. Now, stake it to farm KACY.
8. Enjoy high APR returns!
Disclaimer
The content in this article is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. There are risks associated with investing and you should always do your own due diligence and be consulting your financial advisor.
