Degen Farmers

Up to 10x Leverage Yield Farming in GMX

Whitelisted investors are able to open a leverage position in Archi Finance. To protect the collateral assets, a delta-hedged strategy will be implemented in Archi v1.

Due to the nature of GLP, investors always face the risk of losing their native tokens when prices fluctuate. Archi Finance allows users to borrow funds in a delta-hedged way, which helps prevent such situations while also earning ETH rewards on GMX.

Leverage in Archi Finance

Delta hedging is a strategy used to reduce or eliminate the risk associated with the price movements of the underlying asset. The basic idea behind delta hedging is to hold an offsetting position in the underlying asset to balance the price movements in the options position.

There are two delta hedged strategies in Archi Finance:

  • 50:50 strategy - The portfolio created by farmers consists of 50% stable coin and 50% unstable coin.

  • Identical to GMX strategy - The ratio between stable coin and unstable coin within the portfolio is the same as that of GMX.

The two graphs below demonstrate the difference between buying GLPs using Archi and GMX. Investors will no longer have to worry about losing their native tokens when prices fluctuate while earning a high yield in ETH.

Example: Amy wants to take a 10x leverage position in Archi Finance by depositing 5 ETH. She will borrow 20 ETH and 25 ETH worth of USDC from the supplied pool and use the funds to buy GLP. This will allow her to take both long and short positions equally and remain immune to price fluctuations. As a result, she will not suffer any IL from GLP due to price movements while earning a high yield.

All fees required to buy and sell GLP are paid by degen farmers.

The maximum length of each borrow is one year, and if the loan becomes overdue, it will be automatically liquidated.

How to calculate APR

The interests earned by degen farmers consist of two parts: the interest on all collateral assets and a portion of the interest on borrowed assets that is streamed from GMX.

APR=GMXAPR+Sborrow(N1)GMXAPRAPR = GMXAPR+S_{\text{borrow}}*(N-1)*GMXAPR

The interest share will be varied through Archi DAO to encourage borrowing or repay.

Claim and Withdraw

Degen farmers can claim their earned interests and withdraw their collateral assets at any time. Withdrawing their assets means they repay their borrowings and stop farming. There will be a 48-hour cool down period before you open next position

How to get whitelist

  1. Influencers who help us spread the word will automatically receive a spot on the whitelist.

  2. Archi OGs who participated before the launch will also be awarded with a spot on the whitelist.

  3. Passive liquidity providers will be selected randomly every 12 hours after the launch.

Risk

Traders always bet against GLP investors in GMX, and if traders win by a significant margin, all losses within a particular leverage will be borne by degen farmers, who may face potential liquidation.

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