This mine is on Berachain and was shared by a community member, but he accidentally stepped into a "pit".

After obtaining the consent of community partners, share it.

➤ The following information comes from three DeFi protocols:

1) There is an exchange rate relationship between $BERA and iBGT;

2) Pledge iBGT on Infrared to get 213.18% APR;

3) Exchange iBGT for oriBGT, the compound yield token of iBGT in the Origami protocol, to obtain an APY of 672%;

4) There is an exchange rate relationship between oriBGT and iBGT, and in theory it will continue to rise;

5) Deposit oriBGT into the Loop vault, and borrow more WBERA through Euler to amplify the principal, with an APY of up to 4,000%+;

Seems like there's nothing wrong with it, right?

In particular, the logic in the fifth step looks very much like a revolving loan, but in the case where the deposit interest rate is not higher than the loan interest rate, community friends actually said that the currency base was damaged after a few days of deposit.

Then it is very strange that the currency base is damaged. I replied in the group: revolving loans should not cause damage to the currency base, unless it is not a revolving loan, but using the borrowed coins to buy coins and then deposit them.

If you don’t understand the logic of revolving loans, you can refer to my previous article about BNB revolving loans and how to achieve high returns: https://www.binance.com/zh-CN/square/post/24568385107738

Sure enough, when I studied the underlying logic again, I found that it was different from what I imagined.

➤ Logical analysis:

1) The underlying logic of the Loop Vault is to deposit oriBGT to borrow WBERA, and then convert WBERA into oriBGT to amplify the income.

2) Then, when you withdraw money, you need to use oriBGT to buy back enough WBERA to repay the loan before you can withdraw the funds.

3) After the exchange rate between oriBGT and WBERA dropped, it was impossible to use the oriBGT at the beginning to purchase enough WBERA, resulting in losses in oriBGT.

4) The strategy of Origami Loop is neither a revolving loan nor a neutral strategy, but a long strategy, and the long position is the exchange rate of oriBGT/iBGT and BERA.

5) But in the past few days, the exchange rate between iBGT and BERA has been falling, so the exchange rate between oriBGT and BERA has also been affected and fallen.

Although I fell into a trap, this strategy does not mean that I will not make money. When the exchange rate remains unchanged or rises, it is still very comfortable. After all, I can earn more than 1% every day, and I can also get Infrared airdrop points.

According to a rough estimate, those friends in the community who are stuck and choose to stay put can recover their current losses in about ten days as long as the APR/APY remains and the exchange rate does not fall.

However, the exchange rate cannot remain unchanged, and expectations can be both good and bad.

Regarding the binding relationship between iBGT and BERA, interested friends can check: https://www.binance.com/zh-CN/square/post/24880675955537.

DeFi enthusiast: BitHappy