Clip Finance new leveraged lending strategy and boosted Renzo and Kelp LST points
Clip Finance now offers one-click leveraged farming strategies for your ETH (Ethereum) and WBTC (Wrapped bitcoin). Clip Finance utilizes Mendi Finance money market on Linea blockchain.
These strategies optimize your returns by
- Single-asset deposit
- Automatically compounding your rewards
- Earning extra ezPoints (Renzo LST) Additional incentive that Mendi Finance received from Renzo protocol for its ETH pool
- Earning extra Kelp Miles (KelpDAO LST) Additional incentive that Mendi Finance received from Kelp protocol for its ETH pool
- Save your time
- Save on gas fees
How to start?
- Easily bridge to Linea blockchain. Use deBridge. While bridging you are also farming deBridge points automatically.
- Clip Finance. Explore strategies.
Why leveraged lending provides returns?
Mendi.Finance is money market protocol that incentivizes with its own MENDI token. When you supply Ethereum to Mendi and borrow Ethereum, in both cases while you supply and borrow Ethereum, you are receiving MENDI tokens as incentives. You can supply the borrowed Ethereum back to Mendi Finance and borrow another Ethereum.
You can repeat this loop yourself multiple times or you can use Clip Finance that does the looping (leveraged lending) for you while saving you on gas fees, selling MENDI token into Ethereum and depositing back into your position (auto-compounding). While you are also collecting Renzo ezPoints.
This is considered a low-risk leverage strategy because both lending and borrowing use the same asset, meaning the risk of liquidation is significantly easier to manage without exchange rate volatility.
What is my potential APY and how much Renzo ezPoints would I get?
Looking closely you are getting from supply 8.45% (supply APY) + 2.77% (supply reward APR)+ 9.76% (borrow reward APR) which equals 20.98% rewards. While you are paying 19.02% for borrow.
Above simple asset looping calculator shows that looping 4 times with 65% as loan to value rate, from your initial 10 ETH you end up with supplying ~26 ETH. You are earning ETH interest, MENDI rewards and Renzo ezPoints on your ~26 ETH that brings you to 15%+ APY.
But wait, there’s more — Renzo ezPoints
Mendi Finance has separate agreement with Renzo team that Mendi’s ETH pool (not even ezETH pool!) is getting Renzo ezPoints. Number of points you are getting is following (link to Mendi of this formula):
(WETH total borrow/WETH total supply) * (WETH total supply $) / (total supply $
($8,816,369 / 16,313,416) * (16,313,416) / $70,947,119 = 0.1242667
Since you are “farming” with ~26 ETH and not your initial 10 ETH, you have 2.6x multiplier of Renzo ezPoints in addition. Remember we are talking only about your ETH position that you don’t even need to have ezETH. You are getting 0.12 ezPoints and with 2.6x multiplier that equals are you getting 0.323 Renzo’s ezPoints!
Update September 2024: Kelp Miles extra bonus
Kelp has committed its points (Kelp Miles) as well to Mendi protocol. The amount that is being rewarded has 1x supply formula. You can also look at underlying Kelp rewards. Because Clip Finance is looping the strategy, you are also entitled to 2.6x more rewards!
About Clip Finance
Clip Finance is an Ai optimized active liquidity management platform build on top of intent architecture. Clip Finance addresses the challenges of active liquidity management at the infrastructure level, enabling our quants to build and manage complex AI strategies on-chain.
