If you prefer not to use exchanges, you can create a protected position entirely within the TON network using lending protocols (e.g., Evaa).
Instructions (based on a $1.30 rate):
- Collateral: Deposit your USDT into a lending protocol as security.
- Loan (Your Hedge): Borrow 1000 TON (~$1300).
- Farming: Deposit these "borrowed" 1000 TON into a pool paired with USDT.
Why does it work?
Your debt is fixed in the "number" of TON coins. If TON drops to $1.00, you still only need to repay 1000 coins. But now, those 1000 coins cost $300 less!
Your Profit: Pool fees + farming rewards represent your net income. You are working with borrowed funds while protecting your principal capital in USDT.
⚠️ Important Risks to Consider:
Liquidation Risk: If the price of TON rises sharply, the dollar value of your debt increases. Ensure your USDT collateral is sufficient to cover the loan; otherwise, the position may be liquidated.
Borrowing Costs: You must pay interest (Borrow APY) for using borrowed TON. The strategy is only profitable when the pool's yield is higher than the borrowing cost.
Rebalancing: Due to Impermanent Loss (IL), the amount of TON in the pool will change as the price fluctuates. To keep the hedge effective, the position needs periodic adjustments.
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