LP Business Planner Training II - Buy, Borrow, Yield Strategy

https://vimeo.com/1225358149/47cfd941a0?share=copy&fl=sv&fe=ci

Feature Quick-Reference:

• Position Filter: Isolate collateral and debt assets to evaluate individual risk.

• LTV Slider: Real-time stress-testing of liquidation thresholds across price shifts.

• Net Yield Breakdown: Calculates gross LP fee yield minus borrow interest costs automatically.

Strategy Overview

The Zero-Impermanent Loss Buy, Borrow, Yield (BBY) LP framework gives long-term crypto bulls massive capital efficiency by unlocking liquidity without forcing a sale:

• Instant Equity Access: You don't need $30k in fresh cash to run a $30k LP position. If you hold 1 BTC, you borrow the stablecoins directly against it—instantly turning sitting cold-storage assets into active market-making capital.

• Zero Impermanent Loss (on Certain Pairs): Because you pair borrowed stablecoins instead of selling your underlying BTC/ETH/SOL, you retain 100% of your asset upside. Impermanent loss on your core holding is completely neutralized.

Ideal Operational Scenarios

• Deep in Profit on Blue-Chips: You hold sizable BTC, ETH, SOL, or HYPE positions and want cash flow without triggering a taxable event.

• Bull Market Expansion: In a bonafide bull market, surging asset prices continuously pump your collateral value—pushing LTV down and making liquidation risk virtually non-existent. This unlocked equity lets larger market-makers scale LP position sizes to capture massive DEX volume yields while retaining 100% price upside on their core holdings.

The Strategy Mechanics (1 cbBTC Example)

1. Deposit Collateral: Deposit 1 cbBTC ($60,317) into Aave.

2. Borrow Stablecoins: Take a 50% LTV loan ($30,158 USDC). Max LTV sits at 75%; Liquidation Threshold at 78%.

3. Deploy to LP: Supply $30,158 USDC into a concentrated liquidity pool at an estimated 75% APR.

Price Appreciation & Unlocked Liquidity

As BTC rallies from $60,000 to $90,000:

• LTV Decreases: Collateral value rises, making your debt position significantly safer.

• Borrowing Power Expands: At $90k BTC, maintaining a 50% LTV unlocks over $45,000 in usable USDC liquidity (+$15,000 more available to borrow)—expanding your scale in the market without selling a single satoshi.

The Cash Flow Math

• Borrowed LP Capital: 30,158 USDC

• Projected Fee Yield (75% APR): \(1,885 USDC/month (\)22,620 USDC/year)

• Net Result: Generates a ~25% cash-flow yield relative to your original BTC value, turning a static long-term hold into an active earning asset.

Stress-Test Your BBY Position

Use the LiquidEdge LP Business Planner above to model your setup:

1. Input your collateral asset and starting LTV.

2. Dial in current borrow interest rates versus expected LP pool APR.

3. Simulate price swings to calculate your unlocked borrowing power and stress-test your liquidation floor.

Access the LiquidEdge LP Business Planner at: liquidedge.app/tools/business-planner