Leveraged Farming Overview
Leveraged yield farming is the first leverage functional application and the first use scenario for deposited assets in the Bank of Rabbit Finance, which constitute the foundation of the Rabbit ecosystem, providing the community with a safe, stable and high-yield leverage mining tool.

Function and UI

Dozens of LP pools for trading pairs underlying DEX platforms such as PancakeSwap, MDEX, and Biswap are accessible on Rabbit Finance. Based on excellent Tokenomics and interest rate model design, Rabbit Finance can provide farmers with lower cost, larger amounts and more diverse assets, as well as the most high-yield reward pools on the BSC.

Use Case

We will use a simple case to show the trading process of leveraged yield farming:
The current market price of BTC is 10,000 BUSD. Steven wants to do leveraged farming of BTC/BUSD trading pairs on PancakeSwap. Steven plans to provide 1 BTC as principal and then borrow BUSD to open a position with 3x leverage.
Steven provides 1 BTC as principal and chooses 3x leverage to borrows BUSD (as shown in the picture above) on the strategy setting page. The strategy contract will borrow 20,000 BUSD from Rabbit Finance Bank and automatically swap 5,000 BUSDT into 0.5 BTC, and provide the remaining 15,000 BUSD and 1.5 BTC to PancakeSwap’s liquidity pool for the trading pair, and then stake the LP token to farm CAKE.
At this time, opening position is completed, and about 30,000 BUSD equivalent position value will share the CAKE allocation and trading fee rewards on PancakeSwap.
For more principle and approach, please see the information on the strategy contract page
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Cost-return Composition

Due to the difference of tokenomics design and incentive scheme between different DEXes, the returns of leveraged yield farming will be different accordingly. For example, in addition to CAKE rewards, PancakeSwap will return 68% (0.17%) of the trading fee (rate 0.25%) to liquidity providers.

1. The cost-return composition of PancakeSwap

CAKE reward
Trading fee reward
RABBIT reward
Borrowing interest
DEX trading fees and the price impact caused by transactions and other costs

2. The cost-return composition of MDEX

MDX reward
RABBIT reward
Borrowing interest
DEX trading fees and the price impact caused by transactions and other costs
Last modified 1mo ago