The Positions Pool allows users to utilize staked LP positions from yield aggregators as collateral. These positions continue to autocompound yield during their collateralized period.
First supported protocol is Aura Finance. More yield aggregators will be supported in the near future.
Leveraged Farming: Amplify your yield farming returns by borrowing against your LP positions.
Capital Accessibility: Unlock liquid capital from your staked LP positions without forgoing the continuous yield earnings.
How it works:
Below is an explanation how staked Aura LP positions can be used as collateral.
Withdrawing LP from Aggregator:
Aura vaults are designed to accept Balancer LP tokens as collateral, allowing users to earn an increased yield. These Balancer LP's get withdrawn and transferred to an autocompounding vault.
Autocompounding Vault: The vault, based on Beefy Finance smart contracts, then stakes the LP positions on Aura. The yield earned is harvested, converted into more LP tokens, and then restaked, hence autocompounding the yield.
Using Vault Shares as Collateral:
The autocompounding vault shares, now generating yield, are then supplied as collateral on Positions pool. Then they are enabled as collateral to increase user's borrowing capacity.
Borrowing: With the collateral set, users can now borrow from a range of available assets in the pool. This includes ETH, USDC, USDT, OHM. Borrowing is permissionless with up to 80% loan-to-value (LTV) of the collateralized LP positions.