LP Business Planner Training II - Buy, Borrow, Yield Strategy
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The Ultimate Operating System for Concentrated Liquidity Provision. Optimize capital efficiency, hedge risks, and plan your DeFi expansion with institutional-grade precision.
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 OverviewThe 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.
- Borrow Stablecoins: Take a 50% LTV loan ($30,158 USDC). Max LTV sits at 75%; Liquidation Threshold at 78%.
- Deploy to LP: Supply $30,158 USDC into a concentrated liquidity pool at an estimated 75% APR.
Price Appreciation & Unlocked LiquidityAs 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 PositionUse the LiquidEdge LP Business Planner above to model your setup:1. Input your collateral asset and starting LTV.
- Dial in current borrow interest rates versus expected LP pool APR.
- 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