> For the complete documentation index, see [llms.txt](https://docs.peapods.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.peapods.finance/net-interest-implications-lvf/lvf-yield-scenarios-borrower-profitability.md).

# LVF Yield Scenarios: Borrower Profitability

To assess the economic performance of self-lending strategies, we analyze User A’s profitability across various LVF yield environments. In each case, the user has $10,000 in LP exposure (2x leveraged via $5,000 borrowed capital) and pays a fixed net interest cost of $700 annually.

### **Profitability Under Varying LVF Yields**

| **LVF Yield** | **Gross Yield** | **Net Interest Cost** | **Net Profit** | **Effective APR (on $5K)** | **External Lender APR** |
| ------------- | --------------- | --------------------- | -------------- | -------------------------- | ----------------------- |
| 50%           | $5,000          | $700                  | $4,300         | 86.0%                      | 45.0%                   |
| 40%           | $4,000          | $700                  | $3,300         | 66.0%                      | 45.0%                   |
| 30%           | $3,000          | $700                  | $2,300         | 46.0%                      | 45.0%                   |
| 20%           | $2,000          | $700                  | $1,300         | 26.0%                      | 45.0%                   |
| 10%           | $1,000          | $700                  | $300           | 6.0%                       | 45.0%                   |

📌 *User A remains profitable across a broad range of yield conditions, with increasing capital efficiency as volatility and yield rise. Even at 10% LP yield, the strategy remains net positive.*

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