「 Latest HUMA Circular Loan Analysis 」 @Huma Finance 🟣
HUMA yesterday collaborated with Kamino
to enable circular loans. Which group of people is this plan more suitable for?
I personally think it is suitable for the following groups:
1. Those who have unblocked PST and want to amplify feather earnings;
2. Those who want to store HUMA but are afraid of the long lock-up period and want to use funds flexibly.
So this circular loan plan is worth looking into. Let's calculate the earnings situation:
1. Deposit 100u into HUMA with no lock-up date and receive $PST worth 100u;
2. Deposit $PST into Kamino, borrow USDC, then continue to deposit USDC to borrow USDC, performing circular operations, with LTV calculated at 80%. Theoretically, it can maximize to 400u, but considering liquidation risks and gas consumption, generally about 4 times is sufficient.
3. So how much value can this operation generate?
(1) Principal has a 10% return;
(2) From 1.99 times feather earnings, it changes to nearly 10 times feather earnings;
(3) Equivalent to the earnings of Classic’s 6-month lock-up model, but this circular loan plan allows for more flexible use of funds.
