How to Farm Volatility

Getting Started

Once you have acquired your pTKN (see ), you can start Volatility Farming by providing liquidity (LP). Every LP position consists of 50% pTKN and 50% Paired Asset.

Step 1: Selecting Your Volatility Farming Position

Choose how much pTKN you want to provide as liquidity.
By default, the protocol will borrow an equal value of the Paired Asset, creating a 2x Leverage Factor (LF). This means your debt matches the value of assets deposited.

Step 2 (Optional): Adjusting Leverage Settings

For more control over your position, you can adjust your Leverage Factor (LF) using the Advanced Settings:

1x LF (No Leverage): You provide an equal amount of pTKN and Paired Asset, with no borrowing involved.
1x - 2x LF: The position is created using a mix of depositing and borrowing the Paired Asset to form the 50/50 LP which lowers the leverage factor and reduces the liquidation price.
>2x LF: No Paired Asset deposit is required. Instead, excess Paired Asset is sent to your wallet. The position is opened at higher leverage factor and the debt value exceeds the value of your deposited assets, increasing liquidation price.

Step 3: Reviewing Your Position

Once you've set your LP preferences, the protocol will generate a summary of the steps it will execute to create your position as well as a comprehensive Position Summary which can be found under the "Outcome" in the summary.

The Comprehensive Position Summary Includes:

Loan-to-Value Ratio
Liquidation Price
Expected Yield & Expenses
Projected APY

Review these details carefully to ensure they align with your risk and yield objectives.

Step 4: Opening Your Volatility Farming Position

Once you're satisfied with your setup:

Click "Deposit" to confirm your Volatility Farming position.
Approve the transaction in your wallet.
Your LP position will be created, and you will start earning yield based on wrapping/unwrapping activity in the Pod.

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Last updated 2 months ago