April 8, 2024: Llama Lend Video Tutorials 🦙📺
Four short 1-2 minute walkthrough videos of Curve Llama Lend
We’ve assembled a short series of video tutorials, 1-2 minutes, showing off how to use the Curve Llama Lend markets. Llama Lend is a permissionless lending market where borrowers have the advantage of "soft liquidation" protection.
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YOUTUBE
All videos have been added to a playlist for convenience.
Below we present the series of the four videos and their caption track:
1. INTRODUCTION
Welcome to Curve Llama Lend, a fully permissionless lending market where borrowers have the advantage of soft liquidation protection. Let's show how it works. When you arrive at Llama Lend, you'll see all the available markets, which will consist of a token paired with the Curve stablecoin $crvUSD.
The "Borrow APY" column shows the current borrow rate that you must pay to suppliers. This borrow rate is annualized, but note that it will fluctuate depending on the market's current utilization.
The "Available" column shows how much of the borrow token is available to borrow. All the markets are over-collateralized for safety.
We'll take a look at the Wrapped Ethereum ($WETH) market, which currently is a borrow rate of ~10% and ~575K $crvUSD tokens available to borrow. To create a loan, simply click into your desired market.
We'll deposit 100 wrapped ether to the market. This is currently worth ~$350K at today's prices. The max you could borrow by default would be ~$37K, however at this borrow rate your health would be very low, and the increased utilization of the pool would drive your Borrow APY from ~10% to ~27%.
You could adjust this to a lower amount to affect these parameters. As you can see, reducing it by just ~$50K raises the health factor to ~31% and makes the Borrow APY increase by a smaller amount.
2. ADVANCED MODE
All borrowers in Llama Lend have “soft liquidation protection,” which generally liquidates and de-liquidates you as collateral moves over a range of prices. To better understand this, let's click on the “Advanced” tab for more information. We can see that within this market, all the existing user collateral across every depositor to this market has been automatically spread out over a range of collateral prices.
Ethereum is currently around 30 $500, but most people's collateral does not get threatened until around 3100 to 20 $600 by default. Your collateral will be deposited across ten bands. For these parameters, this would give you a liquidation range between around 2500 to 2900. You can fine tune this by clicking the adjust button. This will affect the number of bands instead of the recommended default of ten bands.
You could spread this as high as 50 bands for safety. This would give you a much wider liquidation range. In this case, between a price of $3.5K, all the way down to $1.7K. Tthis would be much safer, but your max borrow amount is significantly less. Just ~$235,000. If you want a riskier loan, you could drop the number of bands as low as 4.
This allows you to borrow the absolute maximum, but your liquidation range is very narrow, between $3.5K to $3.3K
3. SOFT LIQUIDATION
This account is presently in soft liquidation. The account has borrowed using the Curve DAO Token ($CRV) as collateral over the maximum range of 50 bands. This is considered one of the safer positions. However, the price did drop into this range. On the right you can see that a good amount of this collateral has been converted into stablecoin as the price fell and then sold back into the collateral token as prices rose.
You can observe the left side of this collateral is safer because it has not fallen into this range, because this account is in soft liquidation. It cannot partially withdraw or add more collateral to the position. However, repaying even a small amount of $crvUSD can increase this health factor and reduce the risk that the overall collateral backing of the position drops to a point where a hard liquidation is forced.
4. SUPPLY
Finally, instead of borrowing, you may also serve as a supplier. In order to enter “Supply” mode, click the “Supply” tab, which will show the same markets, but will instead show you the Lend APY, which is a little bit less than the Borrow APY. Some of the markets also receive rewards streamed from the Curve gauges. These markets have the access and the ability to boost these, to earn even higher rewards. In order to supply you would deposit, and then once you have deposited, you would take the resulting LP token and stake it into the markets.
You may not be able to withdraw if someone has taken out a loan against your supply, so be careful. Suppliers also face the risk of bad debt if the entire market nukes. For more information, check out the resources link at the bottom.The documentation provides a wonderful overview.